Everything to know about BITCOINS
You must have heard of the ‘Bitcoins’, the digital currency that have been in the spotlight for a while now. After its creation in 2009 by a mysterious developer who uses the name Satoshi Nakamoto, Bitcoins exploded on to the financial scene in 2013, following enormous increases in their value. It uses decentralized technology for secure payments and storing money that does not require banks or people’s names.
In the original Bitcoin white paper, Nakamoto describes his creation as a “peer-to-peer version of electronic cash, allowing online payments to be sent directly from one party to another without going through a financial institution”. So let us dig in and see what else we need to know about this famous cryptocurrency.
The answer has been explained with lots of layers of complicated specifications over the World Wide Web, but in layman’s term the idea behind its creation was “what if there was a single currency that could be mined (like resources) and used anonymously worldwide. A type of currency, which could be stored in digital wallets and spend just like any other currency.”
How does it work?
Each bitcoin is represented by a unique online registration number. These numbers are created through a process called “mining”. Mining involves creating bitcoins by solving a very difficult mathematical problem on a computer. Each time a problem is solved the owner is rewarded with 25 bitcoins.
Once you have installed a bitcoin wallet on your computer or mobile device. It will generate your first bitcoin address that is used for transactions to and from your wallet. A user can have more than one bitcoin address (one address per transaction).
A blockchain is the shared public ledger on which the entire decentralized distributed Bitcoin network relies. All confirmed transactions are included in the blockchain so that the bitcoin wallet can calculate the balance and new transactions can be verified.
What is its value?
Currently 1 bitcoin is equal to 1,75,000 INR (Yes, you saw that right. It is 1 lakh 75 thousand indian rupees). And the value is constantly changing, so fast that while writing this entire blog article the value changed more than 10 times.
How to get bitcoins?
What is it used for?
Bitcoin has a range of uses, including funding companies, investing cash and transferring money without fees. It is commonly associated with criminal activity such as drug dealing, cybercrime and money laundering, since it can be near impossible to tie a bitcoin wallet to any one individual.
How to use bitcoins?
How to stay secure and anonymous while using bitcoins?
- Don’t share your private keys : Use wallets where you can control your private keys.
- Protect your privacy : Use a wallet that downloads whole blockchain.
- Don’t reuse addresses : Create a new address for every transaction.
- Use different wallets for different sums of money.
- Create multiple secure backups of wallets : Backups should be kept in separate physical locations.
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