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EVERYTHING YOU NEED TO KNOW ABOUT BITCOIN

Bitcoin was invented in 2009 by a person (or group) who called himself Satoshi Nakamoto. His stated goal was to create “a new electronic cash system” that was completely decentralized with no server or central authority. After cultivating the concept and technology, in 2011, Nakamoto turned over the source code and domains to others in the bitcoin community, and subsequently vanished.

Bitcoin  is a digital token that can be sent electronically from one user to another, anywhere in the world. No bills to print or coins to mint. It’s decentralized; there’s no government, institution (like a bank) or other authority that controls it. Owners are anonymous, instead of using names, tax IDs, or social security numbers, bitcoin connects buyers and sellers through encryption keys. And it isn’t issued from the top down like traditional currency; rather, bitcoin is “mined” by powerful computers connected to the internet. Bitcoin is also the name of the payment network on which the Bitcoin digital tokens move. Some people differentiate between Bitcoin capitalized, as the token, and bitcoin lowercase, as the network.

A person or group mines bitcoin by doing a combination of advanced math and record keeping. Here’s how it works. When someone sends a bitcoin to someone else, the network records that transaction, and all of the others made over a certain period of time, in a “block” computers running special software. The “miners” inscribe these transactions in a gigantic digital ledger. These blocks are known collectively as the “Blockchain” which is an eternal, openly accessible record of all the transactions that have ever been made. Using specialized software and increasingly powerful hardware, miners convert these blocks into sequences of code, known as a “hash”. Producing a hash requires serious computational power, and thousands of miners compete simultaneously to do it. it’s like thousands of chefs feverishly racing to prepare a new, extremely complicated dish and only the first one to serve up a perfect version of it ends up getting paid.

When a new hash is generated, it’s placed at the end of the blockchain, which is then publicly updated and propagated. For his or her trouble, the miner currently gets 12.5 bitcoins which in September 2020, is worth roughly $143,000.

Bitcoins are stored on the Bitcoin blockchain network. A special program called ‘wallet’. The wallet safeguards  the secret code you need to use your bitcoins and helps manage transactions, something like an internet banking account. The code which serves as password, is called a “private key” and is vital to the security of your money. Anyone who gets your private key can steal your bitcoins and if your lose your key, your bitcoins are gone too. There is another code called a “public key” that is the address where others can send you bitcoins. Storing bitcoin is easy, but doing so securely often requires careful planning and time. You have to find the best combination of storage for you. If you are going to use bitcoin daily, it is likely that you want to use a convenient mobile or web wallet. What takes the most time and effort is making sure that no one has access to your bitcoin.

Bitcoins has its value. Like many things, it comes down to supply and demand. New bitcoins are released at a rate of about 25 new coins every 10 minutes. But the flow will dry up as they have been designed to ensure that no more than 21 million will ever exist. Today, around 16 million are in use. Bitcoin can be obtained in a number of different ways. Its possible to accept them as payment for goods and services. You can also buy them directly from individuals or special websites called ‘exchanges’, that will swap Bitcoins for regular currency. Bitcoin faucet is another legitimate way to get free Bitcoin.

A Bitcoin faucet is a type of award system either on a website or an app. The company running the faucet will send small amounts when you complete tasks such as watching videos, playing games or view and ads.

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