What is Bitcoin? This has become a really common question, as the hype about bitcoin is going up, kudos to the rising prices. So let’s take a deep dive at what is Bitcoin, and all you need to know about bitcoin currently in 2021.
What is Bitcoin?
A bitcoin is a type of digital currency in which were a record of transactions is maintained and the new currency is generated by solution in mathematical problems. These coins can be operated via central banks.
Each bitcoin is simply a computer file that is stored in a digital wallet. These digital wallets are basically installed on your desktop or phone.
History of Bitcoin? | How did Bitcoin Originate?
The story of bitcoin began on 3rd January 2009 when Satoshi Nakamoto. He started to mine the genesis block of bitcoin (block 0) which had the reward of 50 bitcoins.
After earning over more than 1 million bitcoins, he disappeared from any further bitcoin involvement and handed over its responsibility to Gavin Andresen.
He then becomes a bitcoin developer in the bitcoin foundation. The first bitcoin transactions were negotiated by individuals and a notable transaction of about 10,000 BTC.
How does Bitcoin Work?
Bitcoin isn’t just simple money that can be used for our daily groceries with such ease. It’s not easy to earn bitcoins. In order to get bitcoins, we need to mine and earn cryptocurrency.
A cryptocurrency is usually declared as a digital asset that is designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger that exists in a form of a computerized database that uses cryptography to secure transaction records. This makes it impossible to double-spend it or counterfeit it.
The miners who regularly mine bitcoins receive bitcoin as a reward for completing “blocks” of transactions that have been verified and added to blockchains.
Every bitcoin is stored in a database. The digital wallet is actually the blockchain. Here information is stored instead of data. These are decentralized way so that no single person or group can have control over it.
These are immutable in nature and their transactions are viewed by everyone and can visible to everyone.
This bitcoin money that is received as a reward is actually nothing but an incentive that motivate more people to assist more in the mining department.
What is Bitcoin Mining?
Bitcoins are like money that we earn by working but they need to be mined and extracted like one does for gold. In order to mine bitcoins, one needs to have the specific hardware and software devices.
The respective miner has to hold an encrypted online bank account where all his earned bitcoins will transfer. One can join mining pools to earn bitcoins.
These are basically a collective group of bitcoin miners who pool their computer power with the particular mine. The more power it contributes, the more amount bitcoin the miner receives.
How Can We Mine Bitcoins Ourselves?
Here are the steps for beginners to earn bitcoins.
- In order to start mining properly, you must need a mining rig. In the present day, special software is used for mining based on some algorithm. This is known as ASIC which stands for application-specific integrated circuit chips. This machine takes time to be manufactured and is expensive but the speed at which it works is very good and impressive for you to invest in it.
- The next step is to get yourself a bitcoin wallet. This will help you to store your bitcoin earnings. Each bitcoin has a unique address that can be managed by bitcoin wallets. They have unique public and private keys and their addresses are formed by the matching of these two. It is basically a bank account number that we use. If we lose this we will lose the currency accumulated so far.
- The next thing we require is joining a mining pool. Here, the miners provide their computer’s power to a group for mining. The miner’s gain the money according to the power gained. The moment we choose a mining pool, we must register ourselves in it and set our accounts.
- Secure mining programs for our computer. In general, there are many websites used to mine. The best programs can be run on any website.
- Now we can start earning and get our desired amount of bitcoins.
The present value of Bitcoins?
In current time, the value of one bitcoin is Rs 23,76,702.79 in the Indian currency, at the time of writing this article.
Is bitcoin in a financial bubble?
The value of Bitcoins has been rising at a really abnormal rate, and many financial experts suggest that Bitcoin is a bubble, that may burst at any time. The reason for this is that the fundamentals of Bitcoin is not known to most people. So the question, whether Bitcoin is a financial bubble or not, can be answered only in the near future.
How can you invest in Bitcoin?
- We can invest in bitcoin through cryptocurrency exchange.
We can exchange our cryptocurrencies, ethereum, or ripples from cryptocurrency exchange. This is the simplest way to invest in bitcoin.
- We can also invest bitcoin through P2P transaction.
Here P2P stands for Person 2 Person. This is another mode of buying bitcoins.
- Receive bitcoins through mining.
Bitcoin mining here needs two separate tasks. First, our past bitcoin transactions should be verified. After this, we need to solve complex mathematical problems to solve them and then earn our reward.
What is Bitcoin Wallet?
Bitcoin wallet can be called an analogous wallet. Here, instead of physical currency, this wallet will keep in important information such as bitcoin’s specific address. A Bitcoin wallet is not a physical item but a software program for holding and trading Bitcoins.Bitcoin wallets, can be accessed through the web, or mobile applications.
Here’s the list of some popular Bitcoin Wallets in India
- WazirX Multi-Cryptocurrency
- Zebpay Multi-Cryptocurrency Wallet
- Coinbase Bitcoin Wallet
- Unocoin Bitcoin Wallet
- Ledger Nano X Bitcoin Wallet
- Trezor Model T Bitcoin Wallet
- Exodus Bitcoin Wallet
- Trust Bitcoin Wallet
- Guarda Bitcoin Wallet
- Cool Wallet S for Bitcoin
How does Bitcoin wallet work?
Once the bitcoin wallet is organized in our device, you will be able to have your first bitcoin address in it. This generated address can be shared by you to your friends.
The only difference between email and bitcoin address is that this address can be used only once.
What is Bitcoin Private Key
Bitcoin private key is a secret number that usually allows bitcoin to be spent. Every bitcoin has its own unique address which on entering correctly can be used by the miner. These private keys are usually addresses generated by the bitcoin wallet.
Is Bitcoin Safe?
There has been a long debate about the safety of bitcoins. Even in the present time, bitcoin is said to be a risky investment and while doing so one must be very careful and be prepared for the loss as well. This is a great investment vessel if one has to say but there are huge risks regarding it. One must consult with a financer before investing in one.
Is Bitcoin Legal?
In 2017, cryptocurrencies are said to be legal and subject to taxation and other liabilities by the Australian government. In 2019, the Indian Supreme Court declared that cryptocurrency should have some regulation policies and thus legalized it here in India as well.
Competitors of Bitcoin
No matter how popular and efficient bitcoin is, it still has a competitor. We have a lot of alternatives that can easily overtake bitcoin. Some of them are:-
- VeChain Thor
- Binance Coin
Ethereum vs Bitcoin
|The bitcoin network contains just done for keeping notes||The transactions on the ethereum network may contain executable code|
|Bitcoin uses SHA-256||Ethereum uses ethash|
|It is based on currency and thus can be used as a medium of exchange and a store of value||It is used to promote immutable program contacts and applications.|
Future of Bitcoin
Most of the common people still find it difficult for them to invest in bitcoins. But people like some crypto experts are optimistic about the possibilities this can bring in. In our country, government weighs an 18% tax on crypto coins. The US government currently owns $1B dollars of crypto coins. Bitcoins seem to shine brightly even if the economy goes downhill.
Bitcoins are not something that can be earned easily. One has to work extra hard to earn bitcoins. We can use a lot of ways to get bitcoins but the easiest being pool mining. Usually getting bitcoins to depend on the power we use in the case of pool mining. We can also use graphics cards for better working. Bitcoins have a future one can’t avoid. We should make ourselves prepared to live in an era run by cryptocurrency.
“Cryptocurrencies basically have no value and they don’t produce anything”Warren Buffet.
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