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Bitcoin 101: A Guide on Using Bitcoins

Bit what?

| August 4, 2017

Bitcoin 101:

A Guide on Using Bitcoins

By 8List

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Everything now is digital and can be accessed easily through computers and gadgets. With the birth of the internet comes with it rapid advancement in all things digital.

One such advancement is the formation of digital currency, or virtual currency (VC), which can be used as an exchange for goods and services through internet. Amazing, right? There are a lot of VC that are introduced nowadays, and let’s start with the first one, which is the Bitcoin.

What is a Bitcoin?

Bitcoin is a type of cryptocurrency; basically an exchange between two networks, and regulation of transfer of funds, acting like a bank itself. It was found by an anonymous user, who goes by the username of Satoshi Nakamoto in 2009, but there’s no confirmed identity of the person behind the username up to now.

Bitcoin is available in selected establishment or networks; it can be used to pay bills, exchange of goods and services, buy online, and it can be converted into cash.

 

Where do Bitcoins come from?

Bitcoins may be really convenient, but sadly there are only 21 million Bitcoins at most. Bitcoins come from “miners” who solve mathematical equation from  past transactions; whoever gets the answer first would receive a Bitcoin reward. Transactions made by the users are all recorded in a block called “blockchain”. Through blockchains, miners encrypt codes that results to “hash”. The value of the hash function that is produced will be guessed by the miners, and the first one who guessed the right input, will have the reward. Note that millions of miners will have to compete for the right value.

Just imagine Bitcoins as gold, and the miners are the ones who get them. In the real world, money is printed and these are used in transactions. In that other world, the Bitcoin is solved by miners—and their reward adds to the value of these virtual currencies.

 

Who are the miners?

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Everyone can be a miner! Well, that is if a person has software for solving mathematical equation for hash functions, and loves math too much (which in reality, very few actually do). One must have knowledge of cryptography, and the more miners there are, the more secured Bitcoin there will be.

 

How can Bitcoin be accessed?

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It is easy as digital money transfers! Bitcoin can be accessed through apps—mobile and computer–with  the use of internet, and it can transfer Bitcoins through peer-to-peer transaction. Like a bank, you must also have an account which serves as your identity in using Bitcoins.

A person with an account can send or receive Bitcoins  without any transactions fees or any third parties that will manage transactions. Bitcoins are secured in a virtual wallet stored in a person’s computer or cloud. All transfers a person has made is recorded.