What Is Bitcoin?
BTC is a short term (code) for Bitcoin, the word Bitcoin is from Satoshi Nakamoto in 2008, which means decentralised currency.
Bitcoin is a digital currency in which a record of transactions is maintained and new units of currency are generated by the computational solution of mathematical problems. This process is also the bitcoin mining and adds additional security to the network.
Bitcoin is the first and true cryptocurrency ever existed. The value of btc coin (Bitcoin) is its ability to be exchange into any real currency in the world and the complexity is its difficulty in modification or manipulation.
Bitcoin is now a medium of exchange, a store of value, and a unit of account—which are all properties of money but with non or yet a physical money.
How Does It Work?
Bitcoin is based on peer-to-peer without central control by the government or Central bodies. It’s transaction takes place on database called blockchain with enhanced security and transparency.
Crypto transaction like bitcoin is the transfer of value from wallet to wallet and then record it in the block. You can access your wallet balance on a cryptocurrency platform that offers wallet as a service.
How To Buy Bitcoin?
If you have decided to buy or invest in Bitcoin, then you may need to follow this process. Firstly, to be able to receive and send cryptocurrency, you need a wallet provider.
To have a wallet, you need to create account with exchanges like binance, bybit, Coinbase, exodus, mex etc. Then purchase with the traditional currency and via p2p, card, swapping etc.
However, if you don’t want to buy btc and keep, you can mine. This process requires best practice to avoid mistakes. Mining bitcoin allows you to earn more coins through verifying a transaction or solvinga mathematical problems.
You can equally earn BTC by accepting bitcoin as a payment methods. You may decide to sell any products and receive BTC as payment for your sell.
What Is Bitcoin Mining?
BTC Mining is the process by which transaction on blockchain are verified and networks of specialized computers generate and release new Bitcoin to the verifier.
Verifying bitcoin transaction requires you to digitally sign such transaction using cryptography, and then confirming it by the network.
Then transactions are added to the blockchain through consensus mechanisms like Proof of Work (PoW) and Proof and Stake (PoS) for eth. The hash function for Bitcoin is SHA-256 (two rounds) and implementation is bitcoin core which helps to decide which blockchain validates a transaction.
To mine BTC or any cryptocurrencies, you need a hardware machine, Internet connection and electricity. However you can buy an ASIC miner to start mining immediately.
Bitcoin Halving:
Bitcoin Halving is the process of reducing the rate at which new Bitcoin is created. This process occurs every 4 years and started in 2008.
At this stage the number of rewards for mining bitcoin is cut into half and available supply automatically short and demands increase.
The next bitcoin Halving is will happen in 2028 and don’t have the date. However the exact time of the halving may come from network hashrat and can vary.
Blockchain
Blockchain is a decentralised digital ledger that is shared across a network of computers to keep a digital record of transactions. The blockchain works by storing data on multiple nodes, called blocks. These blocks are linked together through cryptography. As the data is in many different nodes, it’s possible to change any of them without affecting others.
This redundancy prevents bad actors from changing the data. The chain also allows for cross-referencing, which makes it possible to pinpoint the wrong node. This ensures that all data on the blockchain is safe in the same order, and prevents anyone from modifying or deleting information on the network.
Peer-to-peer network
One of the most fascinating aspects of bitcoin is its peer-to-peer network. This network is defined as a collection of entities that communicate with each other without the involvement of a centralized authority. This feature of bitcoin is crucial for its decentralization, as it avoids the possibility of central authorities having a monopoly over it. While regulating this network, it relies on the information of its participants, which are explicit computerized nodes.
In contrast, the Indian Rupee is under the control of the financial powers of the country. No other governmental authority can intervene in the INR’s progress. In addition, the peer-to-peer network of bitcoin allows no centralized entities to manipulate it. Bitcoin nodes are distributed around the world, and there are almost 10,000 of them. Its monetary value is measured by the total number of transactions in a day.
A peer-to-peer network has many advantages over traditional systems. Because it is entirely decentralized. It can be used for more efficient transactions than traditional currencies. Furthermore, it is easy for users to contact each other. Peer-to-peer networking enables the creation of a public distributed ledger. By enabling a peer-to-peer system, btc users can send and receive funds easily without any third parties.
In addition, because the network is based on IP addresses, identifying users is easier than ever. By assigning unique IP addresses to each transaction, users can link it to the person initiating the transaction. In addition, they can also use more than one IP address to conduct a transaction and thus have more than one originator. This means that there is no central authority that controls the Bitcoin network. This makes it easy for users to hide their identity from others.
Risk Involved In Cryptocurrency.
Just like every other valuable assets, there’s a treat to cryptocurrency especially BTC. This includes liquidity risk, hack, fraud, foreign exchange risk, scam and market risk. If you are new to cryptocurrency, it’s very important to consider the risk involved in owning digital assets like bitcoin. The decrease in value of BTC and selling at a low rate can reduce total amount invested. It requires patient to invest in cryptocurrency, which means you should sell when the price is up and buy when it’s low.
Conclusion
Finally, buying and storing cryptocurrency is a good investment for both low class and the rich. As we now understand bitcoin and how it works, we can move over to binance to start our journey to greater portfolio. Its important to have in mind that cryptocurrency have come to stay and understanding how it works is the best way to adapt to the decentralisation. BTC price is floating, it’s important diversify your portfolio and stay strong safe of volatility.