Bitcoin is the first decentralized cryptocurrency in the world. No matter where you live, you know a thing or two about it. It is impossible to hear about cryptocurrency but not hear about Bitcoin. One can say that Bitcoin is indeed the symbol of the cryptocurrency in the world. And, of course, one of the most expensive currencies out there on the market.
Before buying Bitcoin or investing in any cryptocurrency, it is better to know the King of this market closely.
What is Bitcoin?
Bitcoin is a decentralized digital currency created in 2009 by its anonymous creator known as Satoshi Nakamoto. The true identity of the Bitcoin creator is still a mystery to everyone. He created Bitcoin with a promise of lower transaction fees and cutting the hands of third parties.
To put it simply, you can say Bitcoin or known as BTC, is an online version of cash; you can use it to buy any product and service. But clearly, it is capable more than that. It is going to change the financial system from top to bottom. Do you want to know how does bitcoin works? Let’s see.
How does bitcoin is going to change the financial system?
Bitcoin cannot be considered a commodity, and it’s not issued or backed by any government or bank. As we all know, no bitcoin uses cryptography to ensure security. As there is no physical Bitcoin, the only thing that you can store is balances. The history of every transaction is kept on a public Ledger that everyone has access to.
Bitcoin transactions are verified by complex mathematics problems that need a considerable amount of computing power. This process is called ‘mining.’ Everything that happens in the Bitcoin network is stored in a blockchain or, as we stated before, a public ledger. Transactions information is stored in each block. Every computer that runs on the blockchain has the latest copy of the blockchain.
Miners who have access to the massive amount of computing power solve puzzles to get Bitcoin as a reward and verify transactions. You might ask how does process is going to change the financial system:
- Bitcoin is a peer-to-peer system with the potential to omit the role of Central Banks.
- Dollar and other fiat currencies are not backed by real gold, while complex mathematical problems and computing powers back Bitcoin. It has a limited supply, so no one can ever relate its price or the number of coins left to be mined.
- The transaction fee for transferring bitcoin is less than the traditional transaction fee. People who live abroad and want to send money to do loved ones adore this characteristic of Bitcoin.
Now you might even consider buying bitcoin or investing in it using the best crypto trading platform in Australia. But how are you going to do that, and how is bitcoin kept secure?
Is Bitcoin real and safe?
Although Bitcoin is the most popular currency for some people, it remains an enigma. Because they don’t know how bitcoin works, when you understand the true nature of Bitcoin, you can see why it is the most talked-about currency in the world.
Bitcoin is a peer-to-peer System, and everyone, even those who do not participate in this network, has easy access to the history of transactions. It means no one can menu a transaction because once verified, everyone on the network is witnessed and has a copy of that block on their system. So if anyone wants to manipulate the network, he should operate 51% of the computing power on the bitcoin network.
As of early November 2021, the number of nodes on the Bitcoin blockchain was around 12809, and the number is growing. So it is improbable for a person to operate more than 6000 computers or nodes on the blockchain. And if by any chance someone could manage to do that, people would likely split into a new blockchain.
How to buy Bitcoin?
Many believe that bitcoin and digital currency are the future. So if you want to invest in this cryptocurrency, you should find ways to buy it. You can mine Bitcoin or purchase it using real money from someone else. You can also sell products and services and let people pay you with Bitcoin.
Buying low and selling high as a rule of thumb applies to bitcoin too. The easiest and most popular way to buy Bitcoin is by buying it on a Bitcoin exchange. Exchange platforms such as Hubitex help you to buy and sell Bitcoin quickly. Even as a beginner, you won’t have any problem understanding the platform. It is possible to buy bitcoin with hard cash, credit card, debit card, and even wire transfers. But before trying to buy bitcoin, it is better to think about establishing a bitcoin wallet.
There are different sorts of wallets you can use.
- Electronic devices
- Online services
- Software programs
It is better to choose your valid according to your preferences. For example, if you are an everyday user is better to go for an online service known as a hot wallet. But if you want to invest long-term in Bitcoin, you should think about getting an electronic device known as a cold wallet.