Hope you all are doing fine?
Today I am going to dedicate this article to the story around Bitcoins. You have probably heard a lot about these coins. What exactly is a bitcoin and how does one go about purchasing it?
I know that this site is centred around getting you onto the path of discovering ways to earn a passive income, but I decided to take some time out and chat about something different.
It’s a subject that I had to do some research on as I did not have sufficient knowledge at the time. This post covers the important aspects around Bitcoins. I would like to share with you my findings on whether this can be a lucrative path for people or not, to making some decent money. I will explore some “pitfalls” and show you some of the benefits of doing business with Bitcoins.
Is that cool with you? Are you ready to learn about Bitcoins?
Great !! Lets Get a Move on!
What Are Bitcoins?
Bitcoins are one of the first forms of “cryptocurrency” or digital or virtual currency.
When I say that it is virtual, I mean that this form of currency is not physically tangible like a coin or pennies. Its exists purely in a digital form.
How did the Bitcoin start ?
The system of Bitcoins was invented by somebody who goes by the alias of Satoshi Nakamoto. Nobody has really seen or met this person. The code for bitcoin was released in 2009.
Bitcoins are “decentralized” , what does this mean?
Unlike hard currencies like the dollar or pound, which are regulated and controlled by banks, bitcoins are created by people.
They are not controlled by the banks and are therefore independent of any central authority. Furthermore, the value of a bitcoin is dependent on the supply and demand of the market.
How are Bitcoins Created ?
Unlike hard currency that is created by the bank, Bitcoins are created digitally by a process called “mining.”
Miners use special software to solve math problems and upon solving them are then issued with a certain amount of bitcoins in exchange. This is how bitcoins enter into circulation.Every transaction that takes place involving bitcoins are verified using very complex algorithms.
This actually gives people the incentive to do the mining to produce more bitcoins. If there are more miners, the bitcoin network becomes more secure.
However as the popularity of bitcoins grows, along with it are more miners attracted to it. This makes it exceedingly difficult to solve the mathematical problems as an individual.
As a result, the miners get together in “pools” to find solutions and each member is rewarded accordingly, for their efforts.
Bitcoin quantities are limited
According to the Bitcoin protocol, there is a total of 21 million bitcoins that can ever be created by miners. However, these coins are available in smaller parts, like one millionth of a Bitcoin, also called the Satoshi(named after the creator). It is believed that the supply of bitcoins would run out by the year 2040.
How can I earn a Bitcoin?
Just like buying dollars or yen at a Foreign exchange centre, you can buy Bitcoins online. You can buy Bitcoins from Merchants online and use your credit card to complete the transaction.
Check out this site, should you be interested in purchasing BITCOINS.
As I mentioned before, there are a limited supply of these BItcoins. Out of interest, if for instance you had to invest in Bitcoins back in October you would be able to purchase a Bitcoin for around $250. Now, the price of a Bitcoin has shot up to $400 each. As you can see, Bitcoin can be quite a viable investment.
Where is my Bitcoins stored once I make a purchase?
The answer is a bitcoin wallet.
Bitcoin allows one to send money easily from anywhere in the world with ease. When you do transactions of buying or selling of bitcoins, you will need a wallet address. So therefore it makes sense to ensure that these transactions are secure and more so, that the money is safe.
How can I ensure that my Bitcoins are kept safe?
You would want to keep your Bitcoins in a secure wallet. However, I would recommend to diversify your coins amongst the different types of wallets that are out there.
There are mobile wallets(e.g cellphones), desktop wallets, hardware wallets(so you can actually keep Bitcoins in a physical vault) and Webservice wallets( These are third party services that store your Bitcoins online).
Can one actually make money with Bitcoins?
As you have seen above the price of the Bitcoins shot up in a couple of months.This certainly does make it an attractive investment.
This currency can be a volatile one. There is no regulation in place to see how bitcoins are weighed against other currencies and therefore every time Bitcoins does make the headlines, the value fluctuates.
People are making money from Bitcoins and some merchants are already taking bitcoins as a form of payment. In fact, in Canada, they have put up the very first Bitcoin ATM!
Apart from being an investment vehicle, other ways in which Bitcoins are used to make money include
- Mining of Bitcoins
- Create a blog or service and accept Bitcoin as a form of payment.
- Writing articles and accepting Bitcoins for payments.
What are some of the advantages of using Bitcoins?
- There are no banks or fees(at least not at the moment, things could change)
- Transactions take place with a “code” so you don’t use your real name when buying or selling.
- Bitcoins are not taxed anywhere in the world!
- No regulations in place, though some countries have banned their use.
Some interesting facts about BITCOINS
Did you know
- Only about 20% of people know what a BITCOIN really is?
- Only a quarter of the world’s population are in possession of one BITCOIN?
- In 2010, a man paid 10000 Bitcoins for 2 pizzas, three years later, that amount of Bitcoins was worth millions.
The Future of Bitcoins
Bitcoins have been used by terrorist and drug dealers to fund their illegal activities. For instance in 2014, the U.S. authorities shut down the online company called Silk Road, that used bitcoins to sell illegal drugs.
Despite this there are major players such as Overstock.com, that accept bitcoins as payment. Major car dealerships such as Lamborghini, Mc Laren and Landrover now accept bitcoins as payment as well.
Lets not forget tycoon player, Sir Richard Branson, billionaire enterpreneuer of the famous “Virgin” Brand. “Virgin GALACTIC,” will accept bitcoins if you intend buying a seat into SPACE!! He calls bitcoin the “new exciting currency.” For those interested, it will cost you $250 000 to book a space flight.
Check out the video below of Sir Richard Branson accepting Bitcoin as a form of payment- (Video courtesy of Benjamin Michael Brown)
The Washington cited bitcoins as one of six technologies of 2015 that would change the world. Despite the ups and downs that this currency had to endure and the criticisms that it had received worldwide, there is no stopping Bitcoin.
Bitcoin continue to gain popluarity worldwide. Last year we saw 1.3million Bitcoin users. It is estimated that there will be 4.7million users by the end of 2017!
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What do you think? Would you invest in bitcoins? Have you invested in it already? I would love to hear what’s your thoughts on Bitcoins.
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Thanks for reading and I hope that this article made the picture clearer for you with regards to BITCOINS.
Regards and Take Care
6 thoughts on “Unlock the mystery of what is a Bitcoin and Educate Yourself now”
Very interesting, thanks for explaining how bitcoins are created. Which brings many questions to mind. What kind of math problems are solved? Is it a company that wants a special algorithm created for an in-house program and then pays the miner with bitcoins for the rights to use it? I find this new currency fascinating but I prefer a brick and mortar type of investment until there is some sort of regulation for it.
These maths problems are extremely complex and there are companies that build huge infrastructures to do the mining.
This is an interesting currency indeed and as you said, not everyone may ready for it just yet.
What a great history lesson on Bitcoins… I’ve always heard of bitcoins but never knew anything about them until now. So in essence, bitcoins is like investing into stocks (buy low & sell high)? Having said that, the value in bitcoins can drop as well right? Man I gotta tell you I really feel bad for the guy that spent his investment on a couple of pizzas!! Nonetheless, I’m intrigued and will dig deeper in bitcoins and perhaps try and leverage this new opportunity one day soon. Oh… and by the way, bitcoins must have tremendous value if Richard Branson will accept them as a form of payment to travel in space!!
You could compare it to an investing vehicle like stocks, with fluctuations in market prices. I feel bad for the pizza guy too, and that is one of the reasons why there is still so much more that one must learn about Bitcoins.
Thanks for stopping by.
Hey RoopeshG, great article very interesting. I have known about bitcoins for a while and almost regret not investing in them when I first heard of them back in 2013. I think the price for one at that time was $120. Explaining to my wife why we should invest in something so strange fell on deaf ears LOL. Great article and well presented.
Thank you very much for the compliment.
Gee whizz, $120, imagine if you did invest in and had you kept it till today. Sometimes, there is a time and a place for things, guess maybe at that time it might have not been the right time for you.
Thanks for your comment.
All the best.