Internet Money, stocks, or currency, what is Bitcoin? Many people still misunderstand the potential and tremendous benefits of Bitcoin’s peer-to-peer payment technology.
In this section, you will learn the basics of Bitcoin and why they were created. We’ll also tell you how to get them.
Bitcoin is a decentralized digital currency created by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009.
As a new digital medium-of-exchange, it requires no central server or trusted third-party to process transactions or store funds.
Bitcoin is the first successful implementation of a concept called “cryptocurrency”, which dates to concepts described by Computer Engineer Wei Dai on a cypherpunks mailing list in 1998. It also then, suggested the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority (i.e., Federal Reserve/Banks).
A technical paper outlining Bitcoin’s specifications and outlook was published in 2008 on a public cryptography mailing list by Satoshi Nakamoto. It described a new Peer-to-Peer Electronic Cash System, with proof-of-concept on January 3rd, 2009. Satoshi left the project in late 2010 without revealing much about himself. However, the community has since grown exponentially with many developers working on Bitcoin’s improvement.
Satoshi’s anonymity often raised unjustified concerns, many of which are linked to misunderstanding of the open-source nature of Bitcoin. The Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software. Just like current developers, Satoshi’s influence was limited to the changes he made being adopted by others and therefore he did not control Bitcoin. As such, the identity of Bitcoin’s inventor is probably as relevant today as the identity of the person who invented paper.
From a user’s perspective, Bitcoin is nothing more than a mobile app or computer program proving a personal Bitcoin wallet and allowing the user to send and receive bitcoins through it. Simply put, this is how Bitcoin works for most users.
Behind the scenes however, the Bitcoin network is sharing a public ledger called the “blockchain”. This ledger contains every transaction ever processed, allowing a user’s computer to verify the authenticity of each transaction. Digital signatures protect sending transactions through verifying corresponding sending addresses, also providing full control for the user.
In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This process is often called “mining”.
Keep this in mind:
No one owns or controls the Bitcoin Network much like no one owns the technology behind email. That’s the best part about peer-to-peer technology (decentralization).
Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can’t force a change in the Bitcoin protocol because all users are free to choose what software and version they use. Like, asking all your friends to upgrade their chat app to the next version, so all of you can use a particular new feature. To stay compatible with each other, all users need to use software complying with the same rules.
The Bitcoin Network can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.
It’s easier than you think, to get your hands on some bitcoins, figuratively speaking.
As more financial institutions globally continue to adopt bitcoins and offer services to their customers, there will be options available.
Here are the most common ways you can get bitcoins:
The most common way to get bitcoins is using an online cryptocurrency exchange service, which exchange bitcoins for traditional fiat currency i.e., USD.
From, gas stations to small family-owned shops, the convenience of buying/selling bitcoins is steadily growing with the addition of bitcoin Automated Teller Machines around the world.
There are people in your city or country, who are excited to sell bitcoins for cash and/or gift cards. Find common meetups for Bitcoin enthusiasts or dedicated online portals.
Bitcoins are created and placed into circulation by miners, these bitcoins in the form of a reward as the most cost-effective way to obtain bitcoins. However, you must have a lot of equipment or capital to start.
Create a business and start accepting bitcoins for your goods or services; just as you would with any other forms of payment (i.e., cash, credit/debit cards).
There are several websites offering small amounts of bitcoins for free as a reward. These rewards may come by way of learning or cash-back rewards.
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