What is Bitcoin?
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars, euros, naira or other currencies – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
It’s the first example of a growing category of money known as cryptocurrency.
Who Created Bitcoin?
A software developer called Satoshi Nakamoto is the bitcoin founder, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low or no transaction fees.
About Bitcoin. What is it all about?
Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.
However, bitcoin’s most important characteristic and the thing that makes it different to conventional money is that it is decentralized. No single institution controls the bitcoin network. This puts some people at ease because it means that a large bank can’t control their money.
Theoretically, you knew that if you handed over a dollar at the bank, you could get some gold back (although this didn’t actually work in practice). But bitcoin isn’t based on gold; it’s based on mathematics.
Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical formula is freely available so that anyone can check it.
This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. Those banks can simply produce more money to cover the national debt, thus devaluing their currency. Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are ‘mined’, using computing power in a distributed network.
This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network.
Advantages of Bitcoin
- It’s easy to set up
Conventional banks make you jump through hoops simply to open a bank account. Setting up merchant accounts for payment is another stressful task, beset by bureaucracy.
However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable. how to set up a bitcoin account is explained below.
- It is anonymous
Another pros of opening bitcoin account is that the users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information.
- It’s decentralized
The bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions make up a part of the network and the machines work together. That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown – or simply decide to take people’s bitcoins away from them, as the Central European Bank decided to do in Cyprus in early 2013. And if some part of the network goes offline for some reason, the money keeps on flowing.
- No transaction fee
Your bank may charge you a certain amount for international transfers. Bitcoin doesn’t. All transactions are done freely.
- It’s fast
You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.
Disadvantages of Bitcoin
- Limited to Online transactions
Bitcoin is just a digital currency. It can only be used to buy things electronically. That is for digital or online transactions. This alone discourages those who are interested in setting up an account due to fear of being scammed online. So, there is nothing like bitcoin atm card or bitcoin atm machine.
- Poor mobile platform support
Since last year, Apple has taken a proactive stance towards making sure that users cannot send bitcoin via wallets in its App Store. Furthermore, Google does not allow in-app payments with bitcoin.
Although this has not deterred some developers from creating mobile applications for bitcoin called bitcoin app or bitcoin apk but it is one of the major limitations of bitcoin.
These larger technology companies do not want to compete with bitcoin. So they do the same thing as restrictive governments and use their power to regulate it out of existence – within their ecosystem, anyway.
- It’s completely transparent. No privacy
If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. This a drawback of bitcoin account though they don’t know that it’s yours. And there have been increasing number of scammers looking for bitcoin hack tool
There are measures that people can take to make their activities more opaque on the bitcoin network, though, such as not using the same bitcoin addresses consistently, and not transfer lots of bitcoin to a single address.
- It’s non-repudiable
When your bitcoins are sent, there’s no getting them back, unless the recipient returns them to you. They’re gone forever. You can’t trust some bitcoin buyers
How to create a Bitcoin account
This is a brief tutorial on how to create a bitcoin wallet account using blockchain to store your bitcoin and later transfer to make money or pay for services.
What is Blockchain Wallet?
Blockchain is an online Bitcoin wallet that allows an individual to receive and transfer bitcoins as a payment to another bitcoin wallet around the world easily.
How to create a blockchain account?
Just like the way to open a savings account with your local bank the same way you will create a free account with Blockchain wallet and store your bitcoin.
Creating an account with blockchain will take only few minute of your time. Just follow the procedures carefully:
STEP 1: Open Blockchain Website
Goto www.blockchain.info . Choose wallet option from the list of navigation menu located at the top of the web page.
STEP 2: Click Create Blockchain Wallet account
Now, you need to create a New Blockchain wallet account. Just click on “Create a Free Blockchain Wallet” button
STEP 3: Complete the Registration form
Make sure you fill everything correctly and use your primary Gmail ID and a strong password then click “continue”.
Congrats, your Blockchain Wallet account is ready for use. Press “Get started” to view your dashboard
STEP 4: Click on Receive button to see your unique BTC Address
Same way you are giving a unique account number when you open an account with your local bank. Click on the receive button to view your unique BTC address (A 34 digit alphanumeric character). You can receive bitcoin to your wallet with this digit.
STEP 5: Verify your Email ID
Do not forget to verify your Email ID you use when filing the registration form. All you need to do is to click on the verification link sent to your mail inbox.
STEP 6: Copy out your Wallet Identifier
Your wallet identifier can be found just below the verification link sent to your mailbox. copy it and save it somewhere because you can only log in to your account with it and your password.
Article on how to buy or mine bitcoin for free will soon be published.
Source: Coindesk blog