What is Bitcoin?
Welcome back, I’m Kathleen Bitcoin. I’m 20 years old, new to the bitcoin world, and here to write on the current hot topics in bitcoin while I learn about it along the way.
This post is going to be for the newbies like me in the bitcoin community: I’ve created a Beginner’s Guide to Bitcoin. Just the basics.
What is bitcoin?
Bitcoin is digital money with secure transactions on the internet. There is no physical currency of bitcoin. “Bitcoins themselves are not files stored on your computer’s hard drive like MP3s or PDFs. Rather ‘owning bitcoins’, means owning a bitcoin address, which has a balance recorded on the blockchain” (“What Is Bitcoin?” Coinbase, 6 May 2020, www.coinbase.com). Unlike governmental currencies like the dollar, bitcoin allows online transfers without a bank or payment processor. Removing them from the equation creates a whole range of new possibilities, like the ability for money to move around the internet faster and cheaper, along with allowing people to have maximum control over their own assets. Some places are slowly accepting bitcoin as a form of payment.
What is the bitcoin blockchain?
The bitcoin blockchain is similar to a bank ledger, so a record of every transaction made using bitcoin. At a bank, it’s a log of your funds going in and out. That’s private, for obvious reasons. But what’s different about the blockchain is that it’s public, and can be downloaded by anyone. However your address is private unless you share it with someone. So what’s the use for a public record like this? Those in the bitcoin community use it to trace and verify the direction of bitcoins from one transaction to the next. In the beginning, an everyday computer was strong enough to secure the transactions of bitcoin on the blockchain, now it takes specialized computers called ‘mining rigs’. You can purchase these and get bitcoin back in return for mining. This only happens every 10 minutes, and only one miner is chosen. The amount of bitcoin rewarded changes, too.
Can bitcoin be inflated?
No, and there also will only ever be 21 million bitcoin in existence.
Why buy bitcoin?
I asked the same thing. When you don’t really understand what bitcoin is, knowing it’s a form of currency, it’s hard to understand why you have to buy it instead of buying things with it. Although, once you buy it, you can buy with it. You can also compare buying bitcoin to buying gold.
How much does bitcoin cost?
The price never stays the same, just like the price of gold or silver never stays the same.
Do I have to buy a whole bitcoin?
No, you can buy a half, or a quarter, or a whole. Your choice. You can buy as little as .00000001 of a bitcoin!
How do I buy Bitcoin?
Typically, you can buy bitcoin through an online exchange, like Swan. Check out my previous post on how to use their program. They make it easy to buy, (on other exchanges you can also sell, like Kraken), and store bitcoin using something called public and private keys. But, if you decide to buy, send, or receive bitcoin outside of a program like Swan, then you will be need a public key to access it. Think of a public key like an access code. Anyone can send to you using it, but only you can access all that you own with your private key.
What are Public and Private Keys?
A public key is a long string of letters and numbers that is sort of like an email address. A private key, also a long string of letters and numbers, is similar to a password.
Where do I Store my Bitcoin?
A hardware wallet, like a Trezor, which is an electronic device that can be plugged into your computer. This allows transferring bitcoin from one account to another, sending, selling, receiving, and storing it. The wallet also has something called seed words to backup your wallet. They’re like passwords.
How can I Protect my Seed Words from being Lost or Stolen?
CypherSafe makes Stainless Steel Seed Word Backup Devices. When you setup your wallet (like a Trezor), it asks you to write down the 24 seed words to back it up. But words written on paper are vulnerable to physical damage. Since those seeds words are essentially your bitcoin, you want to protect them as much as possible. A CypherWheel by CypherSafe puts those words in a nigh-indestructible form. By storing them in Stainless Steel.
Can I invest in bitcoin?
Yes, and just like with stocks, gold, silver, etc., be aware that price is volatile and can go up or down. It’s also a good way to save and invest for a car, or a future house.
How do you use bitcoin?
It’s very similar to using a debit card, but only online, and instead of being asked for card information like the card number, expiration date, and CCV, you’re asked to provide the public key and the amount of bitcoin. A benefit of this is the limit of personal information required for the transaction to be completed.
Here are a few commonly used acronyms for the newbies:
1. BTC = bitcoin
2. Sat = Satoshi = 1/100,000,000 of a BTC
3. SoV = store of value
4. MoE = means of exchange
5. Fiat = government money (USD, Euro, etc.)
If you want to start Dollar Cost Averaging your way into buying bitcoin, use our link and start your plan today to get $10 of free bitcoin dropped into your account: https://www.swanbitcoin.com/CypherSafe!
And don’t forget to protect it with a CypherWheel!