Bitcoin What is Bitcoin explained in simple Language with elaboration

bitcoin-explained-in-simple-english

What is Bitcoin, How does it work, Where is it kept, you will have many questions in mind?

 

What is Bitcoin explained in simple Language with elaboration
Let me explain it to you What is Bitcoin in Simple English. Will try to avoid technical terms.

 Well, we used to have a Barter System where we used to exchange goods with other goods such as Rice, Maze, Vegetables etc. We used to exchange it in Units such as gm, kg, ton etc. This was way back 300 Years ago now in this 21st Century. Thanks to the internet, today’s life has become much easier. We are able to do shopping, ticket booking Banking – Fund transfer, Bitcoin trading get all kinds of information, with the help of internet.

Depending on which part of the world you are in now, you must be having dollars, pound, euro, rupees etc. in your wallet. Has this question ever occurred to you: What differentiates normal paper from this fancy printed paper which bears the image of Abraham Lincoln or Mahatma Gandhi?

The answer to this lies in a soft-spoken word – ‘Trust’. These currencies are printed by reputed financial institutions like Federal Bank, RBI etc. which come under the ambit of stable governments, which makes the buyers and sellers trust these currencies. Herein lies the difference between Bitcoin and any other currency. In the case of bitcoin, there is no involvement of a third-party financial institution which verifies these transactions.

Today, it is possible to make money with the help of internet. There are so many ways to earn money from the internet by just sitting at home. Some of you might have heard about Bitcoin and who know nothing about Bitcoin today they will know through this article. Yes, today I’m about to tell you what Bitcoin is all about.

 

What is Bitcoin?

Bitcoin also known as BTC, it is computer money. Money that we use to buy and sell things using computers. Like other currencies such as rupee, dollar, etc. BTC is also a digital/virtual currency. This is very different from the other currencies because neither we can see Bitcoin nor we can touch it like money. We can store Bitcoin only in the online wallet. Bitcoin invented by Satoshi Nakamoto in 2009 and since then its popularity has been increasing.

Bitcoin is a decentralized currency, which means that there is no bank or authority or government to control it, i.e. no one owns it. Anyone can use Bitcoin as if we use the internet and there is no owner of it, Transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain. Bitcoin is special because it has no boss, except for you. No one can tell what to do with it.

Bitcoin is a digital asset and a payment system. It is commonly called a decentralized digital currency or cryptocurrency.

It is an open source software. This means, that no person, company or country owns this network just like no one owns the Internet. The system is peer-to-peer, that is, users can transact directly without an intermediary like a bank, a credit card company or a clearinghouse. It is safe if you take security measures while buying/selling and storing it in your digital wallet

People like BTC over real money because we don’t have to carry big amounts of money around. We can send a billion dollars anywhere in the world very very fast, without having to carry it

 

What is Bitcoin used for?

Bitcoin can be used for online payment or any kind of transaction, BTC works on a peer to peer network which means that people can easily transact with each other without any bank, credit card or any company easily. BTC is considered to be the fastest and efficient to use in transactions. Many people are adopting BTC today, such as online developers, entrepreneurs, non-profit organizations, etc. And due to this, BTC is being used worldwide for global payments.

As we do online transactions using the other currencies, we have to follow the bank’s payment process, then we can pay and every transaction we make is present in our bank account so that they can be traced Where and how much money has been spent, but Bitcoin does not have any boss, so the transactions done with him are recorded in a public accounting account which is called bitcoin “blockchain”. All transactions done with bitcoin are stored there and the same blockchain is the proof that the transaction is done or not.

 

How much is Bitcoin worth?

The value of BTC is currently approximately $ 8,000. The value will continue to fluctuate depending on how its worth is perceived. The total number of bitcoins is capped at 21 million, which means that once the number is reached, the value of a bitcoin will increase thereafter given that the demand does not die down. Its value continues to be more or less because there is no authority to control it, so its value varies according to its demand.

 

What is a Bitcoin Wallet?

BTC are stored in wallets. A wallet is like a private mailbox – it has a lock and key, and an address to send to it. Only the person with the right key (private key ) can get in to access the money, but anybody can send to it if they know the address (Public Key). People can have more than one wallet, and wallets can be shared among more than one person. We can just keep BTC electronically stored and require BTC wallet to keep it.

Bitcoin Wallet

There are many types of BTC wallets like desktop wallet, mobile wallet, online / web-based wallet, hardware wallet, using one of this wallet, we have to make an account in it. This wallet gives us a unique id in the form of the address ( Example: 3LRMLsEYqFyPUedEiJtL7jbFFA1MQyygi7 ) if you earn BTC from anywhere and want to store it in your account, then you will need this address and with the help of that, you can receive bitcoin to keep it in your wallet. Apart from that, if you want to buy or sell bitcoin then you need a BTC wallet

How can Bitcoin be earned?

Why will someone want to earn bitcoin?

The answer is straightforward. The value of BTC is only going to increase, given the trend and the cap of 21 million which has been imposed on its number.

There are 3 main ways in which anyone can earn bitcoins –

1. Convert your currency to bitcoin using hundreds of online exchanges which trade in many currencies. 

If you have money you can buy a BTC by paying directly. It is not that if you want to buy BTC, you will have to pay the full Amount, you can rather buy bitcoin’s smallest unit “Satoshi” too. Just like 1 rupee in 100 rupees in  India, there are 100 million Satoshi in 1 bitcoin, so if you want to buy BTC Satoshi you can gradually collect 1 or more parts. When the BTC price increases, then you can earn more money by selling it.

2. Provide goods or services in exchange for bitcoins.

Another way is that if you are selling goods or providing service to anybody online then you can take BTC in return instead of money, you get bitcoin Which will be stored in your BTC wallet. If you wish, later you can get that money by selling it to a different person at a higher price.

3. ‘Mine’ bitcoin

The first two are standard transactions which can easily be visualized with physical currency as well. The third one is a little tricky. Just like real miners exert a lot of effort to retrieve gold and diamond, it takes a lot of effort to gain bitcoins. And this is how the term ‘mining’ originated. The mining procedure is a special characteristic of the bitcoin system. Let’s consider a scenario where a cheque is sent from user A to user B. To liquidate the cheque, user B will have to take the help of his/her bank which will validate the transaction. In the case of bitcoin, however, there is no central control agency which validates the transactions. Instead, the transactions are verified by users having powerful computing devices, who gain bitcoins for their efforts.

Bitcoin Mining

The first mining activity was done by Satoshi Nakamoto, the originator of bitcoin who gained 50 bitcoins for the job. In fact, this is the only way new bitcoins are created. As the number of transactions throughout the world increase, the reward for mining reduces. Whenever the reward for mining will go to zero, there will be no more new bitcoins issued.

Each transaction, in simple terms, has a mathematical question embedded inside it through code. Solving that question requires a fast and robust computing power and is a time-consuming process. The reward for this activity is bitcoins. So if you want to engage in mining, you might want to consider the cost of running these computers against the reward of bitcoins earned.

What are the Disadvantages of using Bitcoin?

  • Bitcoins are not widely accepted
  • Wallets can be lost
  • Bitcoin valuation fluctuates
  • There is no authority, bank or government to control bitcoin here, due to which there is considerable fluctuation in the price of bitcoin,
  • If your account ever gets hacked then you will lose all your bitcoins and it can not be brought back,

 

 

What are the Benefits of using Bitcoin?

  • You have freedom in payment worldwide
  • Privacy on Personal Information
  • Transparent transaction and information are clear
  • Open Payment System
  • People can easily control and get more security
  • Bitcoin network is decentralized
  • Transaction fees are very low.

 

How to Buy Bitcoin?

You can buy bitcoin and other cryptocurrencies by creating an account on one of the cryptocurrency exchange sites. Creating an account is free but some exchanges require account verification (K Y C )before you can make a purchase.

Here are some of the most used and most trusted exchanges where you can start from.

 

  • Coinbase

    Presently, coinbase is the world’s most reputed cryptocurrency wallet serving 40+ countries. Well, I have coinbase on my list of best cryptocurrency wallet(s) only because of its simplicity and smoothness, its worldwide acceptance and trust. For newbies to get started with bitcoins or other cryptos this wallet proves to be very helpful. Here are a few pros and cons :

    pros-

    Instant purchase of up to $1000 worth of BTC per week for verified credit card holders.
    Instant transfers between Coinbase users.
    Well-designed and beginner friendly user experience.
    Insured Bitcoin deposits.
    A debit card linked to your Coinbase balance.
    Online and mobile wallet services, with multi-signature security option to prevent unauthorised movement of funds.

  • cons-transaction fees. (around 3.99% via debit/credit card payment in most of the countries)

Get $10 of Bitcoin for free when you buy $100 or more of BTC.

If you want to buy BTC then you can buy by visiting Coinbase‘s Application.

 

  • ZebPay 

    ( INR deposits and withdrawals have been paused in the Zebpay )

Zebpay is a very user-friendly App, so you can easily purchase BTC. Zebpay’s access is accompanied by a lot of vendors so that it provides much more convenience. Features: 1. You can also fill top up in your mobile and DTH with the help of BTC. 2. You can buy the voucher for Amazon, Flipkart and MakeMyTrip so that you can save up to 10%. 3. Fastest way by which you can buy BTC. 4. It is also very safe too. 5. The lowest price in the market. 6. Using App, you can also buy from mobile.

How to buy

If you want to buy BTC then you can buy by visiting Zebpay‘s Android Application.

Download the App from App store now

 

None of the content on digitalburp.com is financial advice nor is it a replacement for advice from a certified financial advisor. Please consult a professional for further information. I hope you have found this post helpful in understanding Bitcoin and the world of cryptocurrencies. There’s plenty of technical details out there on how Bitcoin works, but I’ve deliberately tried to avoid computer science jargon to make it easy to understand for anyone, including non-technologists. If I’ve misstated something or if you’d like to see more guides about BTC feel free to leave a comment below!

 

You may also like

6 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *