Created by Satoshi Nakamoto in 2009, Bitcoin is a digital currency or a cryptocurrency that has become widely known. Although Satoshi Nakamoto is anonymous, Bitcoin is revolutionizing the finance world as we know it, especially with the introduction of decentralized finance.
Unlike fiat currencies, Bitcoin operates on a decentralized system known as Blockchain. The value of Bitcoin has been volatile as it reached up to $20,000 and dropped to less than half of that within 2 years. However, as of today (07/01/2021), Bitcoin has hit a new All Time High (ATH) reaching $40,000, boosting the overall cryptocurrency market.
How Does Bitcoin Work?
Before you can use Bitcoin, you need to have a Bitcoin wallet which is an online wallet that is used to keep your Bitcoin since it’s a digital currency. The address of this wallet is used in sending or receiving Bitcoin.
The Blockchain technology on which Bitcoin depends on serves as a shared public ledger. With all confirmed transactions, Blockchain enables the wallets to calculate the balance of bitcoins that can be spent and ensure that the owners of the wallets are verified by the owners of the wallets.
When a transaction occurs in Bitcoin, there is a transfer of value in bitcoins between Bitcoin wallets. A private key that is unique to the Bitcoin wallet is used to sign transactions and provides mathematical proof that the transaction was made by the owner of the wallet. Once this signature has been issued, the transaction is safe from alterations by external parties. All transactions are broadcast on the Blockchain network and begin confirmation through mining.
Mining is used for the confirmation of transactions by including them in Blockchain. It is a distributed consensus system. With a chronological order in the Blockchain, the neutrality of the network is protected, and more than one systems agree with the state of the system.
How can you get Bitcoin
Bitcoins can be earned through different means such as from mining , trading or simply buy straight out of exchanges such as Coinbase and Binance. You can find our recommendations here, where we suggest the best platforms to purchase bitcoin.
Buying bitcoins using fiat currencies
Fiat currencies or ‘real’ money can be exchanged for bitcoins. This is known as using exchanges or trading centers. Make sure you conduct research on the different exchange options before choosing one as there are differences in transaction fees and other factors. Also, ensure that the exchange is trusted before using it.
Doing Jobs and getting paid in Bitcoin
With the increasing adoption of Bitcoin, people can be paid in Bitcoin for jobs done. All that is needed is a Bitcoin wallet, and you can start earning in Bitcoin.
To process Bitcoin transactions for the system, computers can be used. Hence, people can use computers to facilitate these transaction processes. In doing this, computers engage in incredibly difficult mathematical problems and are rewarded for solving these problems. This is known as mining. Powerful computers are used for mining. To prevent too many bitcoins from being generated, these problems keep getting more difficult. Mining is a very slow process for getting bitcoins.
Although adopting Bitcoin on an individual level can be a challenge, it is a step towards the future. Cryptocurrency is getting more recognized and integrate