What is bitcoin
Bitcoin is a digital currency and it is created to be used over the internet. Bitcoin is a decentralized digital money that is not exist in physical form like paper money. The term “decentralized” is used often when discussing cryptocurrency, and simply means something that is widely distributed and has no single, centralized location or controlling authority. Bitcoin based on blockchain technology and it is used cryptography to secure transaction. Bitcoin is managed by peer-to-peer networks of computer system that can enable anyone anywhere to send Or receive payments.
- In 2009 bitcoin introduced by a mysterious developers known as Satoshi Nakamoto.
- All bitcoin transactions are secured by a scientific practice of encoding and decoding data called cryptography.
- Cryptocurrency Transactions work through a decentralized database called blockchain. Blockchain is an open source ledger where currency holders record, control and amend transaction.
- Bitcoin is now a globally traded financial asset with daily settled volume measured in the tens of billions of dollars.
how does bitcoin works
bitcoin are a form of currency in the digital world that do not follow the rules and regulations of a centralized banking system. Bitcoin Transactions work through a decentralized database called blockchain. Blockchain is an open source ledger where currency holders record, control and amend transaction.
Bitcoin can be created by mining. Mining is a process of creating new cryptocurrency by solving extremely complicated math problems. all bitcoin miners are doing is comprehensive bookkeeping. A huge public ledger contains all the records of the transactions carried out in the world of cryptocurrency until the present. Any transaction of bitcoin between two parties has to be recorded and accredited by the miners in the virtual ledger.
It is the miner’s responsibility to monitor that the sender is transacting actual money for mining the bitcoin. Once the transfer of money is approved, the miners validate it in the ledger. Moreover, to make sure that potential attackers do not hack the ledger, the ledger is encrypted with very complex computations that are almost impossible to hack. This service of mining offers them cryptocurrency.
What is a bitcoin wallets
A bitcoin Wallet is where you store your bitcoin. This may be consider a cryptocurrency investing because the financial assets you’re dealing with have not exist in physical form. They’re digital and because they’re digital you can store them via a digital storage Facility, i.e., a bitcoin Wallets. the only question is what types of wallets will you use?
There are generally two types of wallets 1) hot storage walleta 2) cold storage wallets.
Hot storage wallets:- Hot storage wallets Are those that are online base Or internet based. Hot storage wallets Are provide by cryptocurrency Exchanges. i.e, Coinbase, Binance.
Cold storage wallets:- Are those that are offline or are not connect to the internet. example of cold storage wallets Is hardware wallets. Hardware wallets are USB type device that you can store your cryptocurrency. these are devices whose sole purpose is to hold your cryptocurrency and as such, they are offline most of time. to use them to receive Or transfer your crypto from your cryptocurrency Exchange account. you only need to plug it into the USB port of your internet connected desktop or laptop and follow transfer instructions. Some of the most popular hardware wallets are trezor, keepkey and ledger nano.
how to buy bitcoin
The best way to buy bitcoin is buy from cryptocurrency exchange. first, you need to pick a cryptocurrency exchange or a broker. a crypto exchange is a platform on which you can buy and sell Cryptocurrencies.
A crypto broker is serves as a middleman between the person buying and the person selling the cryptocurrency. The broker might also buy up a lot of cryptocurrency to sell on its own platform. So here how you can buy crypto through crypto exchange and a broker.
- Create your account with crypto exchange or a broker . Provide all your personal information so you can complete your registration and open your account.
- Deposit money in your account. After you create a account you need to deposit money in your account so you can buy crypto.
- Decide which crypto you want to buy.
- Place your order to buy cryptocurrency.
- After complete your purchase you can store your crypto in your wallets.
what is bitcoin mining
Mining is a process of creating new bitcoin by solving extremely complicated math problems. In simple terms, Bitcoin mining is a method of calculating the value of cryptocurrency assets through a cryptographic process. These processes mine Bitcoins in blocks, which are simply ledger files that permanently record all recent cryptocurrency transactions. Bitcoin miners receive bitcoin as a reward for completing “blocks” of verified transactions, which are added to the blockchain.
how to start mining bitcoin
Firstly, one should know that mining Bitcoins in the current climate would be too expensive. If you had initiated mining Bitcoins in the year 2009, when it started, you could easily generate tons of dollars. But, it is also true that you could have lost plenty of money. I would not recommend beginners who are planning on starting small to invest in Bitcoins. The level of maintenance expenses and investment needed, accompanied by the computational difficulty in the process, is not lucrative at standard-level hardware. Bitcoins are not more appealing to large scale industries who have hundreds and thousands of dollars to spare in the process.
However, we do have alternative cryptocurrencies, like Feathercoins, Dogecoins, and Litecoins, that provide benefits at a much-budgeted level for beginners. Anyone interested in mining any of these altcoins can generate up to 10 dollars every day using the usual consumer-level mining hardware.
Here is how you set up a mining process for any of these coins.
step to start mining bitcoin
1. Set up a coin wallet, which is a private database, free to use. It is like a digital Piggy bank that is protected with a password to keep your earnings secure. It also stores the open network ledger used for recording the transactions.
2. A software package (usually free), which is usually made of open sources and pool mining regulatory platforms, like stratum and cgminer.
3. Online mining pool membership, where miners have built a community to combine their computers and increase their power, hence profits.
4. Authorization at some currency exchange online, where you can trade your earned coins for traditional cash.
5. Continuous and fast internet connection. At least 2 Mbps is needed.
6. An air-conditioned part of your home where the hardware will be set up.
7. A customized desktop created explicitly for mining. Your standard computer may not be used, as you will need to keep running the system for mining. Also, your laptop, handheld device, or gaming console will not be of any use as these units are not able to generate enough computations for earning profits.
8. A GPU unit or an ASIC chip, which is a processing device used for mining. It can cost from $90-$3000 for either of these two units.
9. A cooling fan to keep the mining system cool at all times. A lot of heat generates while mining, which is why a cooling device is needed for a successful mining process.
10. Staying updated with the technological changes in the mining industry is also a requirement. New techniques and amendments are continually happening in this industry, so you will have to be aware of them to be a successful miner.