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What is Bitcoin All About and How Does it works: Wallet,Buy,Trade, Mining,Future

Bitcoin is a Blockchain-based decentralized cryptocurrency, which is independent and has no control of any central authority.

Almost every blockchain enthusiast is aware of Bitcoin and its advantages and probably you too, but this guide is to open your brain on various aspects of Bitcoin (BTC)

If you are an investor of Cryptocurrency or having any interest in Cryptocurrency than definitely, you are concerned about the future of Bitcoin, is it safe or not?

If you are a beginner then I will tell you what is Bitcoin, how does Bitcoin works, how bitcoin comes into the market and what is it used for, etc in detail.

That means this is going to be a jewel for all Bitcoin fans, who are new or willing to learn or explore the mother of cryptocurrency Bitcoin or BTC

We are in the 21st century and the form of currency is changing day by day.

It was started back by the exchange of goods, then an exchange of golds or precious materials than paper currency, then plastic currency and now the time has come to transact with digital currency.

At present more than 2000+ cryptocurrencies are trading in the market but in the top list, in terms of price and market capitalization Bitcoin (BTC) is the king.

But do you know who created Bitcoin?

Bitcoin is a Blockchain-based decentralized cryptocurrency introduced by Satoshi Nakamoto back in the year 2009 and it got tremendous popularity in the year 2017.

Still, no one is sure who is Satoshi Nakamoto, he may be an individual person or a group of people and expert claims that Satoshi owns more than 1 million BTC or even more.

The main idea behind the invention of Bitcoin was to replace all third-party mediators and make the financial system quick and fully independent.

Still, the future of Bitcoin is uncertain due to country-wise regulations.

So is this the end of Bitcoin? no, my friend, it is just beginning,

I will tell you every single bit on what is Bitcoin, and how you can make money from Bitcoin, which will help you to understand the future of Bitcoin.

What is Bitcoin Worth and Future?

No one can predict the future of Bitcoin (BTC) but if you are willing to invest in Bitcoin then this guide on Is it worth to buy Bitcoin? can help you to identify the potential outcomes for Bitcoin.

At this moment what we can do is can trace the price movement of Bitcoin which will give you an idea, what is Bitcoin Worth and what it was earlier?

By the end of 2017, it was the golden era of Cryptocurrency when all cryptocurrencies were flying and their prices were skyrocketing.

People were investing a lot like this is the only thing left in the world, maybe you are one of them.

As per the CoinMarketCap, there is around 2000+ cryptocurrency currently traded in the market.

But the Price of Bitcoin touched its all-time high of $20,000 from its $300 in just a couple of months, no one has experienced such growth ever before.

What is Bitcoin worth in past 6 years
Image Credit to CoinMarketCap

This is the image, I have taken from coinmarketcap, which shows the massive movement of Bitcoin price between 2016-2019.

In 2017 the total worth of the Crypto market was around $800 Billion and Bitcoin acquired the most of the market with a total worth of $320 Billion.

In this crazy movement, every single people was aspiring to grab Bitcoin as much as possible.

But then soon after we have seen the massive crash in Bitcoin price from $20,000 to $300.

At present in Dec 2020, Bitcoin is hanging around $7,000-8,000 which also touched $13000 back in Jun 2019.

Which means no one can deny the potential of Bitcoin but I advise you to go through the detailed guide on Is it worth to buy Bitcoin?

What Is Bitcoin and How Does it work?

Let drill down all the possible queries you have in your mind related to Bitcoin and its generation and its backend process and its adoption in the worldwide networks.

Let first start with the History of Bitcoin that where it came from and what is Bitcoin all about?

What is Bitcoin and Who Created Bitcoin (History)?

In ancient time people used to exchange goods to fulfill their demand and as time passed away, the form of currency changed

Started from copper, silver or gold coins to paper currency then to plastic currency such as credit or debit card and now we are in the new transforming face where people looking for Bitcoin and more than 2000+ altcoins.

Bitcoin is a digital currency, which was started back in the year 2009 by Satoshi Nakamoto.

He introduced a Peer to peer electronic cash system in a 9-page document, here is the original copy of the Bitcoin White Paper.

In the year 2010, it got first recognition as currency when 10,000 bitcoins were exchanged for a Pizza and that is why crypto enthusiasts also celebrate Pizza day.

Bitcoin is a digital currency that is independent and no central authority has any control over its price movements that are the reason its price fluctuates over time depending on demands and supply.

That is why people call Bitcoin as a Bubble, which may rise or fall at any point.

It may awesome to know you that around 2000+ Cryptocurrencies are currently traded in an active market and to trade them the most basic currency you require is Bitcoin (BTC).

The semi unit of Bitcoin is called Satoshi. In the name of the father of Bitcoin Satoshi Nakamoto.

100,000,000 Satoshi= 1 BTC

Currently, every financial transaction is cleared by Bank or any financial Central governed body, so here is a mediator like Bank who is responsible to clear all your transactions.

To overcome this functioning of Bank and vision to make this payment transaction anonymous and decentralized Bitcoin was originated.

It is based on Blockchain technology and no one is responsible for controlling its price or future, if people will continue to invest in Bitcoin then it will fly else it will die.

According to Statista till Sept 2019, there are more than 42 million active blockchain wallets in the world and keep growing.

Blockchain wallet Worldwide
Image Credit to: Statista

In addition, currently, 4000+ worldwide ATM established for Bitcoin.

Yes, Bitcoin (BTC) is yet not legal tender in any country but it started spreading its use cases in various industries.

Now we will proceed with the learning of Bitcoin generation or what is Bitcoin mining process and how Bitcoin comes into the market.

How Bitcoin Generation happens or Bitcoin Created?

Bitcoin generation process is a predefined process, which has a fixed amount of bitcoin value generate in each block, now the question is what is the block in Bitcoin?

Bitcoin Block is a specific period of the minimum time required for any transaction to be cleared in the network and to learn more check the detailed guide of what is blockchain technology?

In the case of Bitcoin, it is an approx 10 minute but if you will go for Litecoin it is just 2.5 minutes.

When Bitcoin was originated and any Block was mined then the miner of the block, consider miner as the person who clears the transaction was receiving 50 Bitcoins in Reward.

We will discuss more on Bitcoin mining later in the guide.

But Bitcoin technology is programmed to halving, now what is bitcoin halving?

Bitcoin halving is the inbuilt programming of Bitcoin blockchain technology where the generation of new bitcoin will half after every 4 years.

At present only 12.5 BTC are generating in every block and by May 2020 this count will further reduce to 6.25 BTC per block.

Isn’t it interesting?

Now we are aware of the generation of Bitcoin, so the next question is how to get Bitcoin and the possible ways to earn Bitcoin.

There are three ways to get Bitcoin a few are through investment however others are free so they won’t miss any of the listed methods.

  1. Get Free Bitcoin by Mining.
  2. By Bitcoin from the Cryptocurrency exchanges
  3. Get Free Bitcoin by joining free faucets.

I know you are interested in Free Bitcoin so here is a helpful guide on free Bitcoin maker.

Here in this guide, we will only discuss what is Bitcoin mining to get free BTC and How to Buy Bitcoin?

What is Bitcoin Mining and How it Works?

It is the hardest way to earn Bitcoin, you should have the proper setup of the computer with a very high specification close to a supercomputer and install mining software on it.

I think you are shocked, wait for a moment.

First, we will learn what is Bitcoin Mining?

While any transaction initiated anywhere in the world through the Bitcoin wallet then it will not confirm unless the puzzle associated with each transaction will get resolve.

Every transaction in the blockchain network should be registered in the blockchain registry, the same as every bank transaction registered in the bank ledger.

To solve this mathematical problem people use high power computers or special hardware devices like ASIC and at a time only 1 is able to mine the block.

Whoever is able to solve that block puzzle will be rewarded with the Block reward of 12.5 BTC and all the transaction fees associated with that block.

Hence the person like you or me who is willing to mine those blocks is known as a miner and the special devices used to mine those blocks known as mining devices.

This overall process of mining a block using powerful hardware is known as cryptocurrency mining.

Every currency has a different mining mechanism few support Proof of stack (POS) and few proofs of Work (POW), learn here in detail about cryptocurrency mining.

Bitcoin mining won’t be possible with GPU or CPU hardware devices like we use for altcoin mining, for Bitcoin you need to buy dedicated hardware like ASIC.

Earlier in 2011, mining was easier to do using GPU but after popularity in the year 2017, it is very hard to mine Bitcoin.

The big giant of Bitcoin mining is Genesis, Bitclub, etc they have done the setup of mining software and high powerful hardware to mine them as much as possible.

What is Bitcoin All About and How Does it works: Wallet,Buy,Trade, Mining,Future

 

We discussed a lot in brief of Bitcoin mining but if you are holding a limited amount of money and willing to invest in Bitcoin mining hardware then I won’t recommend doing this instead of focusing on investing in Altcoin.

If you still with me then you got an idea what is Bitcoin mining and how it works, so let discuss the on other the ways, how to buy bitcoin?

How to Buy Bitcoin?

Bitcoin can get through mining or from the free faucet but both are time-consuming process especially from free faucet hence the next best option is to invest directly in Bitcoin by buying Bitcoin.

Be aware of the investment risk in Bitcoin and other blockchain-related projects, here is how you can invest in Blockchain Projects.

In the year 2017 Bitcoin was traded around $20,000 and currently around $7,000. So wait for the right time and jump into the bearish market.

You can buy Bitcoin from different Cryptocurrency exchanges but initially while doing the conversion from Fiat currency like USD, GBP, EUR to crypto may charge you around 5-10% as transaction fees.

To avoid these transaction fees, we have some secret steps to follow, if interested to learn then go through the guide on how to buy crypto with 0$ trading fees.

There are few cryptocurrency exchanges, you can use them to buy Bitcoin directly.

Well, all exchanges are working on buy or sell bids, you can place your order to buy BTC and it will fulfill immediately as soon as someone else place a sell order and Binance (Learn how to buy on Binance) is my recommended choice.

If you have Bitcoin but it is a digital currency so you need to hold this in a most secure place which means the best Bitcoin wallet, so let me tell you what is Bitcoin wallet and their types.

Best Bitcoin Wallet or Cryptocurrency wallet types?

A cryptocurrency wallet is a digital wallet which ensures security and holding of your account, to hold your money you should have a bank account.

Similarly, to hold bitcoin, you should have a wallet that will hold your Bitcoin as long as you want and in this list, there are various wallets.

  1. Desktop wallet
  2. Web Wallet
  3. Mobile Wallet
  4. Paper Wallet
  5. Hardware Wallet

Desktop and web wallets are not that much secure and mobile wallets will be handy with you all the time but in case of Bitcoin which is the most precious digital currency, I would recommend the hardware wallet.

Hardware wallets are most secure and a private and public key will be given to you to access your account in a secure way, here is a comparison on most famous hardware wallet Trezor vs Ledger.

The most famous is Web Wallets because they are accessible from anywhere but if you want to hold in a safe and secure place away from online hacking than paper and Hardware wallets are the best option.

But willing to learn more about paper wallets then don’t miss a guide on what is a paper wallet and how it is the most secure way to hold your altcoins.

Now a few examples which are based on the above category of Wallets are.

  • Exodus Desktop wallet
  • Trezor hardware wallet
  • Ledger Nano S Hardware wallet
  • Unocoin web wallet
  • Zebpay web wallet
  • CoinBase web wallet
  • Blockchain web wallet

You can choose any of the above-listed wallets, except hardware wallets, all others are free to use and simply one-step login process with ID verification.

Every account will have a Bitcoin recipient address to which you need to send your bitcoin, in case you want to hold that Bitcoin into that wallet.

Here is a list of all the best cryptocurrency wallets including all explained above in this guide.

Let imagine another scenario, where you already holding Bitcoin and willing to convert Bitcoin back to cash or your local currency then how to do that?

How to Convert Bitcoin to USD, GBP, EUR or Vice versa?

This process is a way to buy your cryptocurrency or encash them back into your own local currency so let first highlight the simple steps on how to buy Bitcoin on any exchange or in any wallet.

It will be similar to all the wallet, simply follow these steps.

  1. Login to your wallet
  2. Deposit your Centralized currency like USD, GBP or INR.
  3. Click to Buy  Bitcoin
  4. Place a bid to buy
  5. Wait until you win Bid
  6. If instantly price increased than cancel the previous bid and place new.
  7. Once you win the bid BTC will be credited to your account.

Here the deposit of the currency can be done through different ways on a different platform but make sure with the transaction fees.

But willing to withdraw or sell your Bitcoin to get fiat currency like USD, GBP, EUR, etc then there are numerous ways as explained din our detail guide How to convert BTC to USD.

How to trade Bitcoin on an Exchange?

If you have bitcoin and willing to do trading then obviously you should have a platform from where you could buy or sell your bitcoin and there is an international platform like.

  1. Bittrex
  2. CoinExchange
  3. Cryptopia
  4. Binance

All the above platforms are not registered to trade with only single currency Bitcoin but there are hundreds of cryptocurrencies that are also listed to trade.

To trade the same in Bittrex, if you have your coin in CoinBase wallet than transfer that to Bittrex, you know how to transfer Bitcoin from CoinBase to Bittrex?

Here is an ultimate guide for you How to transfer Bitcoin from CoinBase to Bittrex.

Now your Bitcoin is with the Trading platform and repeat the same process what you have done while buying Bitcoin. Simply put your bid to buy other currency using Bitcoin and if you win the bid you will be credited with that new currency or coin.

Similar way you can go with Binance and all other exchanges, we have gone through each and every aspect of Bitcoin so this time is to discuss the future of Bitcoin.

Is Bitcoin Future Safe?

Till now, we have learned what is Bitcoin, but to understand its future we need to focus on what is Currency?

Currency is something which accepted by people and currently 49 million Blockchain wallets that mean a huge majority of people are still having belief in Cryptocurrency and accepting this to trade.

If these many people have a belief then you can consider this a bright future. Because what you want is value for a piece which you are holding, it does not matter whether it is a piece of paper of gold mine.

Binance cryptocurrency exchange has a daily trading volume of more than $1.5 Billion and Coinbase the largest exchange has recorded a total worth of $8 Billion.

At present (Dec 2019), the Bitcoin market capitalization is around $132 Billion which was back in year 2017 was close to $360 billion which means it has the potential to grow.

yes, it is not widely accepted by any central authority because it becomes the most powerful asset for a dark web market where people are using Bitcoin to hide their black money and doing anonymous transactions.

But if we ignore those people then this seems like a new face of currency and going to be Boom in the near future.

My Opinion and Summary

Bitcoin is a new face of currency which is fully decentralized which has some drawback in terms of the number of transactions clear per second which is only 7 as compared to other currency like Ripple and EOS, they can process in thousands.

But Bitcoin (BTC) is the only currency, which has no control of any central authority and due to millions of nodes worldwide it is the most secure and trusted currency to be accepted worldwide.

To date, no central authority has banned on use or trade of crypto or Bitcoin, which means it is not a legal tender but still the price volatility will always be the question mark.

Few countries like INDIA have stopped working with cryptocurrency exchanges but that not mean it is illegal to trade in India.

What is your though all about bitcoin and where it’s future heading? Let us know in the comment box.

Kirtish Vyas

I am an Engineer and a passionate Blogger, Who loves to share the tips on Blogging, SEO, Google Ranking, Digital marketing, passive income, Cryptocurrency, and Blockchain Technology
Kirtish Vyas

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