What is it?
Bitcoin is a cryptocurrency and worldwide payment system. It was created around 2013 by an unknown entity under the name Satoshi Nakamoto. It’s been driven by computers processing transactions all over the world popularly referred to as mining. Bitcoin, in its current state and time of this writing (January 2018) is a candidate to replace traditional fiat money. Lots of questions… I know. Fortunately, there is a video by weusecoins.com that gives us a better understanding. I will expand on that thereafter.
What is a Cryptocurrency?
A cryptocurrency is a digital asset. A digital asset is anything that exists in a binary format. A file with a binary format is simply a block of computer memory. I block of computer memory can be moved much like a transaction. These transactions are linked and secured using cryptology, a technique for secure communication in the presence of third parties such as the public. Transactions are recorded using blockchain technology which serves as a ledger. A blockchain is a continuously growing list of records, called blocks. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. Transactions are processed over the Bitcoin network, a peer-to-peer payment network, which consists of computers all around the world that process these transactions using a proof-of-work system popularly referred to as mining.
By design, Bitcoin is completely decentralized yet permanently verifiable making it, in theory, a trustworthy currency the world can use without favoring a particular government, centralized bank or other authority. Reading more about the process in detail reveals intricacies and simplicities that have fused together defining what Bitcoin is and what it can mean for humans in the future. A truly remarkable time.
How can I get Bitcoin?
There are several ways to acquire bitcoin, you can buy them at current market value, you can mine for them, or you can accept Bitcoin as payment for a service or product that you sell. Before acquiring Bitcoin though, you will need to have a place to store your digital credentials such as your public and private keys for your Bitcoin holdings which can be used to recieve or spend the cryptocurrency. This “place” is referred to as a wallet or more specifically a cryptocurrency wallet. Wallets can be software-based or hardware-based and you should do your own extensive research to see what meets your criteria best. Wallet options can be found here.
You can purchase Bitcoins at the following exchanges listed at here. Just like choosing a wallet, do your homework before using any service listed.
Mining for Bitcoin
You may decide to mine for Bitcoin which in return helps the effort of the Bitcoin network. You’d be making a contribution and taking part in what seems to be, at times, a digital gold rush. Mining was profitable in the beginning, but the difficulty of processing blocks have greatly increased and the days of profiting by mining using your personal computers are long gone. Many enthusiasts have joined mining pools which, as a whole, have increased their chances of earning Bitcoin. Cloud Mining is another option where you rent shared processing power from a third party – you typically don’t own the hardware with this option. Like anything, each has their pros and cons.
Accepting Bitcoin as payment
You’d be surprised by how many establishments are accepting Bitcoin as payment for their services or products. There are a lot of ways to do this as well and is another topic entirely. More info on accepting Bitcoin payments can be found here. It is also worth noting that some wallet providers offer ways to accept Bitcoin – perhaps additional criteria for selecting a wallet.
How do I use Bitcoin?
It goes without saying that in order to use Bitcoin, there has to be an entity that accepts it. There are many that do and the list continues to grow.
An important message from Bitcoin.org:
Bitcoin is an experimental new currency that is in active development. Each improvement makes Bitcoin more appealing but also reveals new challenges as Bitcoin adoption grows. During these growing pains, you might encounter increased fees, slower confirmations, or even more severe issues. Be prepared for problems and consult a technical expert before making any major investments, but keep in mind that nobody can predict Bitcoin’s future. – Bitcoin.org
Why bother with cryptocurrency at all?
It is an idea that goes beyond digital currency. Similar to that of the invention of the light bulb, the internet, SpaceX’s ability to land rockets back home, Bitcoin represents an idea that the world economy can function as one without borders and political jargon. Exploring the unknown and pushing the boundaries of existing processes to further develop and improve efficiency in all aspects of our paradigm can light the paths we take into the unforeseen potential of our existence. With Bitcoin, we are experiencing the evolution of economics happening right before us.