Bitcoin is many things. Some have called it the internet of money. Some have called it digital gold. Bill Gates called it a “tour de force”. To start, Bitcoin can be thought of as 3 things. 1) It is a digital currency you can use for personal and business transactions at high speed and low cost. 2) It is a global payment network that allows parties to exchange value without middlemen. 3) It is a general ledger (Blockchain) that records all transactions and can be queried and referenced by anyone, anytime, anywhere. Transactions occurring on the Blockchain can never be removed or altered.
Bitcoin is a digital currency that is designed for global commerce in the modern age, with the ease of a credit card but without the high fees. Value can be transferred for cents by taking advantage of Internet as the payment rail for the fast and frictionless transactions. Any amount, from $1 to $5,000,000+, costs only cents to transfer.
Bitcoin, like the internet, is based on code and math. It does not know political or geographical borders. Any two parties anywhere on planet earth with a bitcoin wallet and internet connectivity can conduct transactions. In addition to global value transfers you can use Bitcoin as a method of payment for any stores or vendors that accept bitcoin.
Bitcoin is secured by advanced cryptography and the network has never been hacked. Bitcoin has no central point to target because it is a decentralized network of nodes working together. While the network has never been hacked people and companies have been. In order to secure your Bitcoin please research the different types of wallets.
Since its creation, Bitcoin has evolved from a mathematical proof of concept to a rapidly expanding economy worth billions of dollars. Bitcoin is now being used in transactions between millions of people and thousands of businesses around the world. The Bitcoin blockchain is being used to secure assets, store contracts, and act as a medium for digital trust. The use cases for the network is growing rapidly. In a digital age, Bitcoin represents digital money.
Bitcoin’s usefulness spans many categories. In it’s simplest form it’s a digital currency, but the system itself is what allows people around the world to conduct trade quickly and at low cost. This is because all of the expensive infrastructure that financial institutions need is replaced by outsourcing that power to the Bitcoin network.
Because of its ease and low cost, Bitcoin has now grown in acceptance as a medium of exchange. Bitcoin’s inherent value is in its speed, low cost, and security features. While still in its infancy, Bitcoin can already be used to buy everything from a cup of coffee to a vacation package, and low fees make it more economical than using a credit card processor.
One of the biggest hurdles in international travel is changing currency and then losing out on exchange rates and processing fees. With Bitcoin growing around the world, it’s becoming a more viable way to travel without even carrying cash. The more shops and services that accept Bitcoin, the more we can focus on the travel experience itself, and save money as well.
On October 21, 2008 a developer named Satoshi Nakamoto published the Bitcoin Protocol which outlined the theory of a decentralized currency. This was followed in January 2009 by the release of the open-source Bitcoin software, and the mining of the first Bitcoins.
Most currencies are created and controlled by a central authority that ultimately has power over prices. Bitcoin is decentralized and generated through open-source software, so the system is transparent, priced on the free market, and belongs to no one person or organization.
Financial systems take a lot of power to run. With Bitcoin, individuals and groups willing to dedicate computer processing power to support the network are rewarded with Bitcoins. This process is known as mining, and it’s how every bitcoin comes into existence.
All newly mined Bitcoins, along with every transaction, are publicly recorded and verified through the network. This record is known as the Blockchain and is one of the features that helps keep the system secure from fraud and abuse. Bitcoins cannot be duplicated or forged.
There are a range of ways to acquire bitcoins, which vary from country to country. Exchanges, brokers, ATMs and individuals all offer bitcoins for sale or trade. Services are out there where you can find people to trade with for fees from 7%-25% or more. In the countries where they are authorized, exchanges have a more involved registration process, but make buying and selling easier. Once your identity has been verified, you can send funds from your real world bank account to your exchange of choice, and then buy/sell at your convenience. The downside is you do not see your deposits reflected in your accounts for a few days, and there have been exchanges closing with customer funds lost.
A wallet is where you send, receive, and store your Bitcoins. A web wallet is like having an account you can manage through a third party (such as an exchange), and a local wallet is like storing your funds at home in a safe (or under the mattress).
In the real world, your unique wallet ID is a string of digits that may look like this: Wallet Public Key. You can use a wallet shortener to make your wallet address easier to use, or generate a QR code that can be easily scanned.
Desktop wallets are the most private after printed offline storage methods, as they store your bitcoins on your own computer and allow you to control the security level. However, that also means that you need to install software than can take up a lot space since you always have to download and update the Blockchain as it updates itself.
Web wallets hold the Blockchain information so you don’t have to, are easy to use for transactions, and are a way to keep your Bitcoins in another location for safety. They are, however, less private, and it is best to use services with security features such as Yubikeys and Google Authenticator to protect your account.
Mobile wallets store your Bitcoin on your mobile device in an app. These are convenient ways to store lesser amounts of Bitcoin but you should always make backups in case you lose your phone. For additional security, it is best to use services with 2-factor security features such as Yubikeys and Google Authenticator to protect your account.