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Maybe you’ve heard about Bitcoin but want to learn more about it. Here’s a layman’s perspective towards this digital currency.
Maybe somebody has come to you asking about Bitcoin. Perhaps, you know people that want to invest in this cryptocurrency but don’t know how to do it. Well, this article is a layman’s guide to Bitcoin.
To some people, Bitcoin is not something new. It’s a household name in some places. But some people know Bitcoin as a cryptocurrency, nothing beyond that. To them, Bitcoin is synonymous with cryptocurrency.
But Bitcoin is one among thousands of cryptocurrencies in the world today. Satoshi Nakamoto created it in 2009, introducing a digital, fiat money alternative. However, people still speculate whether Satoshi is a person or a group of individuals going by the pseudonym.
People mint Bitcoin via a mining process that uses specialized, powerful computers to solve complex math equations. The Bitcoin network rewards them with new Bitcoins that start circulating. Mining one Bitcoin can take around 10 minutes. According to the Bitcoin network’s protocol, miners will produce 21 million tokens, which is the total number that can exist globally by 2140.
Since not all people can engage in Bitcoin mining, platforms like Bitcoin Prime allow individuals and businesses to purchase this digital currency using fiat money. Thus, you can sign up on this platform to start buying or selling Bitcoins. Bitcoin users store their tokens in digital or crypto wallets. They also use them to send and receive funds.
Bitcoin’s Underlying Idea
Satoshi built Bitcoin on the idea that any object can be money, including a record, a people can accept it as a payment for services and items or debt repayment in a specific country. This digital currency employs mathematical equations or cryptography to control funds transfer and creation.
Essentially, Bitcoin doesn’t depend on a central bank or government to function. Instead, anybody can process purchase, sell, or complete other Bitcoin payments using a smartphone, desktop computer, laptop, or tablet. And this works without a financial institution acting as a recording agent or intermediary.
Bitcoin’s Value
Bitcoin is like any other money. Its value fluctuates relative to forms of cash. Like the way the value of the rupee fluctuates wildly against the dollar, Bitcoin can have drastic price movements. Since Bitcoin doesn’t have a centralized exchange, its value changes constantly.
When parties agree to exchange Bitcoin, they agree on the price since no central authority can dictate it. The seller states a fair price depending on this virtual asset’s current market price. But supply and demand influence Bitcoin’s value.
As hinted, the world will have 21 million Bitcoins in total. And this affects Bitcoin’s value positively, though other factors can also influence Bitcoin’s price. And these include media reports, government regulations, technological changes, more acceptance, and endorsements.
Bitcoin’s usability is currently the most influential factor affecting its price. Now, thousands of merchants accept Bitcoin payments. Consequently, its value is increasing globally, and this trend is likely to continue as more people learn about it.
How to Start Using Bitcoin
Maybe you’ve learned about Bitcoin and now want to start using it. Well, you require a Bitcoin wallet to start receiving and sending Bitcoin. A crypto wallet is an application you download and install on your device. Once you have it, register, and you will be good to go. Bitcoin is easy to obtain.
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You can take payment for goods or services with Bitcoin
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You can purchase or sell Bitcoins via a crypto exchange
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You can also engage in Bitcoin mining
If you opt to mine Bitcoin, take your time to learn how it works and acquire the requirements. Also, understand your government’s stance on cryptocurrencies before you start taking or using Bitcoins.
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