Bitcoin for Beginners: An Introductory Guide
When delving into the world of cryptocurrency for the first time, there’s one major term you’re likely to see everywhere: BItcoin. There are a plethora of terms and systems you need to know when investing in cryptocurrency. So, what exactly is Bitcoin and why do you need to know about it?
As the largest and most well-known cryptocurrency currently available, Bitcoin is generally a great starting point for beginners. Most experts will recommend investing in multiple currencies, with your majority of investments being within larger options like Bitcoin. Because of that, it’s important to know and understand what Bitcoin is and how it works.
In this article, we’ll explain exactly what Bitcoin is, explain how it works, and leave you with tips for mining or buying/selling/trading your Bitcoin crypto. You’ll also leave with a good idea of how to securely store your Bitcoin.
What is Bitcoin?
Just like any other cryptocurrency, Bitcoin is a decentralized currency that can be used to purchase goods and services or trade/invest. Although it works in the same way as other cryptocurrencies, Bitcoin is considered the “OG” cryptocurrency.
Bitcoin was originally published in a White Paper in 2008 by a person (or group) under the pseudonym Satoshi Nakamoto. Nobody knows who exactly Nakamoto is, or whether they’re a single person or a group of people. The cryptocurrency officially launched in 2009 and has maintained its spot as the biggest and most popular cryptocurrency currently available.
While trading and purchasing Bitcoin on a crypto exchange, it’ll most often be referred to as “BTC” rather than Bitcoin. With so many cryptocurrencies available, these abbreviations make it easier to sift through and find the ones you’re interested in.
How Does Bitcoin Work?
All cryptocurrencies run on blockchain technology. This technology is what gives cryptocurrency a safe and secure platform to be bought, sold, and traded within. Blockchain technology is used specifically because it provides security without the need for any third-party interference.
With Bitcoin and any other cryptocurrency for that matter, it’s important to make sure you have a solid foundation of knowledge to help you navigate the process. Once you’re comfortable, you choose the cryptocurrency wallet you’d like to use. There are several different crypto wallets available and many come in app form for easy access.
After you find a wallet to secure your Bitcoin, you then need to find a way to get some. You can obtain Bitcoin by accepting it from someone as a form of payment or by purchasing it from someone else on a crypto exchange.
Once you have some Bitcoin to your name, you can use what you have to either make purchases or invest within the exchange.
Cryptocurrency mining is the process that adds new currency into circulation. Mining is also how new transactions are confirmed by a network and is also an integral part of ensuring the blockchain runs smoothly.
Although many like the idea of Bitcoin mining for the mere fact that you’re rewarded with crypto tokens for your work, the process is time-consuming and some say it has a negative impact on the environment.
To successfully mine Bitcoin, miners solve complex math equations using expensive computer technology. These math problems require a lot of power usage, so unless you’re adamant and determined, you may not want to use the energy.
The most common platform for buying, selling, and trading Bitcoin and other cryptocurrencies is through a crypto exchange. These exchanges are just like the regular stock market, but for Bitcoin instead of USD.
To start using an exchange platform, you’ll need to create an account for that specific site. You’re also likely going to need to verify your identity in some way. Most sites will require identification in the form of a driver’s license or state ID or a document that provides proof of funds.
For a more detailed explanation of how to use your Bitcoin, check out this Youtube video by Mashable:
Storing Your Bitcoin
Its important to also have a safe and secure means for storing your Bitcoin. In most cases, you’ll be required to have an established crypto wallet before using a crypto exchange. Many exchange platforms provide a wallet for you, but you also have the option to use a separate wallet in most cases.
Crypto wallets also come in hardware form and can be used in a variety of ways. Cryptocurrency is accepted with Paypal, so you also have the ability to pay for goods and services anywhere that accepts Paypal payments.
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