What Is Bitcoin: The Beginners Guide

Bitcoin has risen from obscurity to one of the biggest buzzes on the globe. By today Bitcoin has settled in people’s lives quite firmly. If you are looking for a guide about all of the basic, yet essential stuff related to Bitcoin — this article is just for you.

What is Bitcoin? Basically, it is a form of digital currency which isused and distributed electronically.

For a long time, experts in the field of cryptography have been working on the creation of a unique decentralized system of payment. But only in 2008 during a huge financial crisis, Satoshi Nakamoto created the world’s first cryptocurrency — Bitcoin.

Photo by Viktor Forgacs on Unsplash

Nakamoto published a file with the Bitcoin protocol and briefly described the features of the new payment system. Actually, no one knows who Satoshi really is and it’s still a mystery whether it is one person or a group of developers. Anyway, the goal of the technology was to create a new electronic cash system that was completely decentralized with no server or central authority. As a result, the new currency should have increased the protection against scammy transactions, the independence from financial institutions and the ability to use currency anonymously.

In the spring of 2010, Laszlo Hanech made the first payment with Bitcoin for his pizza order. He paid 10,000 BTC for this delivery. We sincerely hope the pizza was good. Just imagine how much he could earn today if he hasn’t “eaten” these digital coins?

Bitcoin is fundamentally different from all the previously created electronic currencies and payment systems. It is not tied to any physical asset or “official” fiat currencies and the price of BTC is regulated exclusively by the market demand and supply. Bitcoin has a big similarity to gold — it is limited. Its number is restricted to 21,000,000 BTC, while in 2019 about 17,600,000 BTC was mined, so it’s more than 83% of the total amount.

Let’s go through the main characteristics and advantages of the first digital currency.

  • Decentralized. This means that Bitcoin is not regulated by any bank or government entity. It is designed so that every person, business, as well as every machine involved in mining and transaction verification, become part of a vast network. Moreover, even if some part of the network goes down, the currency will keep moving.
  • Anonymous. There is no need to share any personal information while making transactions with BTC.
  • Transparent. Every single BTC transaction that has ever happened is stored in the Blockchain. However, tracing a particular Bitcoin address to a person is still nearly impossible.
  • Speed. The Bitcoin network processes payments almost instantly, it normally takes just a few minutes for someone on the other side of the world to receive the coins, while usual bank transfers can take several days.
  • Ease of use. To open an account in a bank — it’s not a fast and easy process. And there is a chance that in the end, you can get a refusal without explanation. With Bitcoin, you can forget about this problem: you only need five minutes to create a Bitcoin wallet and immediately start using it. No questions, no fees.
  • Non-refundable. Once you send your Bitcoins to someone, there is no way of getting them back, unless the recipient would want to send them back to you. This ensures the reception of the payment, meaning that whoever you’re trading with can’t scam you by claiming that they never got the money.

However, Bitcoin has some weak points including the following:

  • Legal questions The legal status of Bitcoin varies drastically from country to country. In some countries, the use and trade of BTC are encouraged, while in others it is banned and outlawed.
  • Volatility. Unstable exchange rate reduces the potential of BTC as a payment option.
  • Continuous development. The future of Bitcoin is rather unclear. Currently, the governments and banks are not able to control BTC, it’s almost unregulated. However, the bigger and more popular it gets, the more world governments will try to take it under control. A regulated and governed Bitcoin would be an entirely different kind of currency.

To sum up, Bitcoin is the currency which marked the beginning of a revolutionary financial era. Whether you are looking for an anonymous way to pay, want freedom from high transaction fees, or are just curious about this digital currency, now is the perfect time to join the Bitcoin revolution. By the way, the StealthEX exchange service is here to help. You can exchange your coins to BTC and vice versa on StealthEX. The platform is anonymous, limitless and allows you to swap 200+ cryptocurrencies.

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Tags: Bitcoin blockchain BTC cryptocurrency Ethereum
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