What is Bitcoin? Beginner's Guide

 what is bitcoin

Bitcoin is one of the most popular Cryptocurrency currently available which was first launched in 2009. Cryptocurrency doesn't exist in electronic form over the Internet and could be used to send/receive data worldwide within seconds

What's amazing is that a person sending funds via Cryptocurrency/Bitcoin doesn't need to wait for the amount to be sent to the receiver and nor need to pay any transaction fee.

What's amazing is that there is no one who currently owns Bitcoin in the world unlike our banking system where the goverment (Federal Reserve System) is the manager of the ultimate finances and currency involved. It's common that governments around the world manipulate currencies by printing more paper money to cover up their debts, thus devaluing the currency overall, and increasing inflation.

  • [message]
    • ##check## What Bitcoin briefly?
      • Bitcoin is a real money that you can use to buy things anywhere online or offline in real world. You can go to store and just like you pay via cash/credit/debit cards, you could pay via Bitcoin. Though currently, there aren't many stores world wide that are accepting Bitcoins, but the numbers are growing fast as Bitcoin is becoming famous.

Cryptocurrency vs Paper Money

#1 Ownership / Management

Paper money has a centralized system that takes control of the currency. Like Federal Reserve System in United States where the goverment could print more paper money any time thus increasing inflation.

Cryptocurrency on the other hand doesn't have any centralized system where any single entity would be its controller or manager. There is NO ONE who owns a certain cryptocurrency like Bitcoin.

Bitcoin features a blockchain transaction database which keeps hold of all the Bitcoins world wide which are synced to each other. This means, I could checkout recent transactions of any particular person who transferred Bitcoins.

Every person's Bitcoin wallet (Where you store your Bitcoins) maintains an independent ledger (table of information) that holds the transactions that a person do. The entire system is highly transparent compared to the banking system.

#2 Transactions

In case you need to transfer money from one bank to another, you're charged a certain transaction fee for wire-transfer, which goes to the banks involved in the transactions. The banks store your money and bring that into circulation and make profit out of it.

Banks make money out of your money that you store with them!

With Cryptocurrency, you're in charge of your own money and you can directly send your money to another receiver all via internet. You don't need to involve any third-party (bank) in between. That is why it's called a peer-to-peer currency, where person A send money directly to person B without involving banks (C) in between.

#3 Inflation Control

In centralized currencies like Dollar, Pound etc, the goverment has the control over the currency and it's value. The more paper money gets printed, inflation rises. Governments generally do this to cover up their debts that they take from time to time, though devaluing overall economy.

With Cryptocurrency, there is no single person or a group who is in charge of the currency. No one could print or create extra Cryptocurrency coins. The currency is designed in a way that it's self stabilizing. Take an example of Bitcoin below.

Bitcoin is designed in a way that there can't be more than 21 million bitcoins at a same time in circulation. The software behind Bitcoin makes sure that the currency always increases in value and never gets devalued.

The system behind this is called mining which I'll share in a bit down in the article.

Who made Bitcoins?

At this point, it's very interesting to think of the person who created Bitcoins for the first time ever. Well, we have an answer to that partly.

Bitcoins was first created by a genius software developer who designed a software that regulates Bitcoins and keeps control of the system. Yes, it's the software!

The software was created by a single person or a group of programmers under the name of 'Satoshi Nakamoto', though currently no one really knows who actually was behind it.

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    • ##Tip## Fun fact
      • In a recent news that came out, an Australian Entrepreneur named Craig Wright claimed that he is behind the creation of Bitcoin, though there is no confirmation about it.

What is Bitcoin Wallet?

Now as with every currency, you need something to hold your money. Either you place your money in your wallet, or you store them in your bank, which acts as your wallet.

Likewise, with Bitcoins and other Cryptocurrencies, you need a Wallet to store them. There are various wallets available online.

Bitcoin Exchange & Wallets Services

There are various services online like Coinbase that offer Bitcoin exchange services. You can trade Bitcoins there. Like wise, they offer a built in storage wallet that you can use to store your Bitcoins.

Pure Wallet Services

Then there are apps and services online that only offer Wallet services for Bitcoins like Blockchain.

Offline Wallets

Then there are various hardware devices available on Amazon that offer offline Bitcoin storage. You can checkout the following.

bitcoin atm

Can you buy less than 1 Bitcoin?

Currently the rate of the Bitcoin is as follows:

As the rate is extremely high, some beginners might look forward to buy less than 1 Bitcoin. Below are the denominations of Bitcoin that you could buy too.

10−3 millibitcoin, 10−6 microbitcoin and 10−8 satoshi.

Bitcoin is easy to setup

What makes Bitcoin amazing is how easy it is to setup compared to the conventional banking system. You just need to signup on any Bitcoin trading website or get in contact with any person who sells Bitcoin and save them in your wallet.

If you're new to Bitcoin trading, you can checkout this guide to know how you can buy Bitcoins, easily.

Wrap up

Bitcoin is fast rising currency and you should get on the bandwagon before it's too late. In case there is any question that you'd like to ask, put that down in the comment section down below and I'll get back to you InshaAllah.



The Coin Journal: Bitcoin News, Blockchain News , Prices, & Analysis: What is Bitcoin? Beginner's Guide
What is Bitcoin? Beginner's Guide
The Coin Journal: Bitcoin News, Blockchain News , Prices, & Analysis
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