Everyone heard about Bitcoin in the past 2 years. The mainstream media helped push this cryptocurrency to the mainstream, as its price soared by more than 1,400%. On the other hand, it is not enough to simply hear about something. It is also important to understand what it stands for, how it started, and its basic mechanics. That’s why in this article, we’re going back to the basics, and introduce Bitcoin crypto in a very simple and straightforward way.
Buckle up, sit down and enjoy this quick guide on what Bitcoin crypto is.
What is Bitcoin crypto?
Bitcoin is the most recognized digital, decentralized currency, which is created through solving cryptographic tasks. Transactions are written into a decentralized blockchain, which ensures that Bitcoin is always available and immune to manipulation. The revolutionary aspect of Bitcoin is that it does not need a central authority like a bank for the validation of transactions. The current price of Bitcoin crypto in USD/Eur/Yen (Fiat) is purely created through supply and demand.
Who is Satoshi Nakamoto?
The founder of Bitcoin Core is only known under the pseudonym Satoshi Nakamoto. In November 2008 he developed the currency. Until today it is not known which person or group of persons are behind this anonymous name. Since 2008 multiple persons were associated with the name, but until today no one could yet prove to be the real Satoshi Nakamoto.
How was Bitcoin Created?
Whenever Bitcoin is generated, a new block gets discovered. Each block contains a certain amount of bitcoin. This amount reduces after every four years. The discovery of a new block comes when a user solves hash encryption by the SHA256 algorithm. To make things easier, this is a complicated puzzle which is a string of characters that needs to be decoded using high-end computing power. In the end, a user gets rewarded with bitcoin every time they add a block to the blockchain.
In 2009, if a user would add a block to the blockchain, he/she would get 50 bitcoins. As it stands, the number was revised, and a user would only get 12.5 bitcoins. Since more bitcoins are getting discovered, the mystery of solving the puzzle increases. Thus, mining bitcoin becomes difficult.
Bitcoin difficulty was rated at 1.0 when it first came out. The same strain was measured at 1.18 at the end of 2009. In 2017, eight years down the line, the difficulty was at 4.24 billion. This is an indication that bitcoin mining is becoming difficult than it was before.
In the early days, you only needed a desktop to mine a coin. Not anymore after more miners entered the race. Nowadays, you need a device with complex configurations, and still, the procedure takes long and consumes more power.
Bitcoin Crypto – Pros and Cons
It’s easier to send Bitcoin between two parties in different countries. It’s fast and simple as opposed to the bank option.
Quick Payments, Less Fee
Money transfer is fast as there is no third party involved. Besides, the fee one pays in a Bitcoin transaction is less compared to bank charges.
Protection Against Payment Scam
You cannot reverse bitcoin payments. Still, the chances of them being counterfeit are zero.
The cash that Bitcoin generates is used to fund illicit activities. Hacking activities have also been on the rise in exchange for bitcoin.
Bitcoin has not been accepted in some countries and in some, they have been banned. The majority of investors have purchased bitcoin using black money. If the global government can decide to regulate the trade of bitcoin, it might become unstable and collapse.
Risk of Loss
You should invest the amount you are willing to lose. If you lose your stake, it won’t hurt. There are times when web exchanges go out of business. This time, forget all your investment as it is gone. Also, market fluctuations affect the crypto market too. With an investment of $6,000, today might be $3000 an hour later.
What to Consider before investing in Cryptos
The cryptocurrency market is full of uncertainties as much as it’s full of gains. Bitcoin, Ripple, Ether, and others have shown steady growth, but you can’t equate the trend to new altcoins. It’s a matter of time before altcoins can have a sustained track record. Still, not all will shimmer. Be vigilant when investing in altcoins.
Ensure the coin you want to invest in has a purpose for existence. If not, chances are it is going to stagnate. It’s that simple. Invest in an altcoin that solves a particular problem.
The Team Behind the Coin
The team behind each coin should have a solid background in the industry. Don’t fall prey to a currency established by a group of dreamy-eyed entrepreneurs. Avoid altcoins that are entirely new.
The altcoin you want to invest in should provide a solution to the problem it intends to solve. The answer should be reasonable in that, for example, if the problem is to replace the internet with new blockchain-based infrastructure, explain how you will implement it.
How to accept Bitcoins in 3 simple steps
It is very easy to accept Bitcoins as a company. Our guide in three Steps will walk you through the process. Here you can find a small list of vendors that accept Bitcoin.
1. Create a Bitcoin Wallet
You can use an online Wallet or install one on your machine. You can find a list of wallets here.
2. Print a QR-Code
To pay and accept Bitcoins you have to convert your bitcoin address to a QR code. The QR code includes your Bitcoin address, to where the customers are supposed to send their bitcoins.
Paying mobile with QR code
Static QR code: A static QR code, that never changes. Commonly found near the checkout. The customer just has to open his Bitcoin Wallet on their smartphone and click on “Send Bitcoins” to scan the static QR code. The amount (in Dollar or Bitcoin) has to be typed in manually and be confirmed.
Dynamic QR Code: The procedure is very similar. The only difference is, that the QR code has to be created for every individual buy. Then the amount the customer has to pay is already included in the QR code and the customer does not have to type it manually, which is even more convenient for vendors. Also, this makes it easier for beginners to send the correct amount.
You can create a Code here.
3. Show that you accept Bitcoin
That is the easiest part. Just add a visible sticker to your store that reads “We accept Bitcoin”.