Bitcoin is a peer-to-peer digital currency designed to be a completed digital payment system. There are no physical bitcoins, no offices or bitcoin banks, only a decentralized eco-system of wallets, exchanges and miners running the bitcoin network.
Bitcoin, invested in 2008 by the famous and still anonymous Satoshi Nakamoto came up with a new way of transferring wealth and value from one person to another without the need for a third-party intermediary or bank. This meant that two people no longer needed to have a bank account, be in the same room, country or even know each other to be able to barter or trade between each other
There are only 21m total Bitcoins that will ever exist, and this number will never change. At the time of writing and article update in June 2021, there is 18.8m Bitcoin that have been mined and transferred at some point in their life. There is rumour to be over 4 million bitcoin lost, or unretrievable making the amount of accessible bitcoin even smaller.
This breakthrough in the concept of money, wealth, payments and decentralization has gained huge traction since 2008 to become a Trillion dollar marketplace. Bitcoin laid the framework and ideals on which 1000's other tokens have based themselves, but, no two blockchains are alike.
Why use Bitcoin?
Bitcoins can be used to buy merchandise, facilitate payments or store value long term. As there is a fixed number of bitcoin's that will ever exist, bitcoin has been likened to gold as a long term store of value. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation.
This form of decentralization has given bitcoin a shady past with its uses on the dark web or for digital ransom, but in 2021, major businesses, institutions and even countries are turning to bitcoin for its global reach, digital accessibility and transparency as a currency.
Bitcoins, like normal coins or cash, are store in digital wallets. These digital wallets can take all different forms from a mobile app, a piece of software on your computer, an extension in a web browser to a physically secure device or even a piece of paper. Bitcoin wallets have two important pieces of information called "Keys".
- 1) The Public Key or "address". Public addresses have 26-35 characters and are essentially anonymous. There are no name or address attached to any bitcoin wallet address and the balance can be viewed by anyone on the bitcoin network. A nearly infinite number of wallet address can be created and can be used once, or multiple times.
- 2) The Private Key or "ownership key". This is the important one. Think of a private key like the PIN on your bank card, but longer. This private key essentially unlocks your bitcoin wallet and also provides access to transactions of the bitcoin in the wallet.
- 3) "Wallets" can have multiple, if not thousands of receiving "Public" addresses, but only one "Private Key". To keep your transactions safe, secure and anonymous, you should only use a bitcoin address once when receiving bitcoin into your wallet.
How to buy Bitcoin?
Bitcoin can be purchased from trusted exchanges like coinpass.com or by trading bitcoin with a friend or relative between bitcoin wallets.
Buying through a trusted exchange allows you to deposit funds from your bank and transfer that fiat currency amount into bitcoin. You can then move this bitcoin to your wallet or store your bitcoin safely on a trusted exchange.
There are benefits to both holding your bitcoin on an exchange or holding your bitcoin in your wallet. If you hold your Bitcoin on an exchange, you can quickly sell or trade this bitcoin during a price rise. However, some exchanges with weak security have been hacked in the past losing bitcoins of their users. Do your independent research and look at an exchanges track record.
By holding your bitcoin in your wallet, you are in direct control and become your bank. You are 100% responsible for your bitcoin holdings and their security. This is a great benefit to some people but isn't for everyone.
Transferring bitcoin between wallets is as simple as "Sending" and "Receiving". You can send your bitcoins from an exchange to your wallet and vice versa.
You can do this from any bitcoin wallet mobile app, desktop application or physical hardware device.
Bitcoin was the first mover in a new world of digital banking and digital currency. Bitcoin was the lightning rod that struck after the 2008 Global Financial Crisis that saw trillions of dollars of value whipped from everyday peoples wealth due to greedy and reckless banks.
Bitcoin sought to bring wealth, payments and financial inclusion to everyone on the bitcoin network in a fair, transparent and indiscriminate way.