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What Is Bitcoin And How It Works

What Is Bitcoin And How It Works

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What is Bitcoin?

bitcoinMany people feel very confusing when Bitcoin. Bitcoin is something that is actually very simple and easy to understand, not as you might think.

This learning series aims to help everyone to understand the basics of Bitcoin, and as time goes by, we will provide learning opportunities for those who want to know more.

Bitcoin is usually explained by comparing the Bitcoin itself with something we’ve to know before,

but this will make you’re getting confused.

Bitcoin is a new technology that all of us have never seen before,

so a better way is to look at things as a combination of Bitcoin is different that we know:

First, because the Bitcoin makes it easy to move money,

Bitcoin is a payment system, similar to the method via bank transfer or credit card, but the Bitcoin is slightly better.

Second, Bitcoin resembles gold-this is why many people call Bitcoin as ‘ digital ‘ or ‘ gold Gold 2.0 ‘. Imagine Bitcoin as gold serves as money,

but very easy to Bitcoin transferred (transferable).

Third, Bitcoin resembles the internet because none of the persons or entities who control it,

so anyone can use it according to their wishes. This is a unique characteristic.

These three characteristics are supporting each other and fused in such a way. In-depth details we will explain in the next section.

For now, imagine what happens if you put a big pot and throw a credit card, a piece of gold, and a bit of ‘ internet ‘ into it – all of it – to pull out something new – Bitcoin!

 

WHERE THE ORIGIN OF THE BITCOIN?

What Is Bitcoin – Bitcoin ‘ created ‘ by someone or a group of people with the name ‘ Satoshi Nakamoto ‘. Is there anyone who actually know who she is?

Although there are many articles and investigations to find out the truth about who she (or they), there is no evidence that is strong enough to date.

Does it matter? Not at all. Satoshi design the entire system of the Bitcoin with open attitude ‘ manner ‘-this means that the code is available to be viewed and checked by everyone,

so there are no hidden secrets and no influence from its creator. As time passes, many people started working on these codes so very different from the initial draft created Satoshi.

It is important to remember that there is a misunderstanding about the mentioned that Satoshi Satoshi creates Bitcoin alone.

Like other great breakthroughs in science, the creation of Satoshi built by the hands of many people.

In a few decades later, many leading experts, engineers, and mathematicians are involved in research on cryptography, systems, and more.

Satoshi manages to encapsulate all this work into one coherent and clear plans and then perform the implementation of the plan.

If you read the Whitepaper, Satoshi you will read references from all over the discovery that prompted his creation.

HOW DO I GET MY BITCOIN

There are several ways to get your Bitcoin:

Like traditional money in General, you can get a Bitcoin for selling goods and services, and ask people to pay you in Bitcoin. Normally, Bitcoin receives cheaper and easier than other payment methods, and one of the easiest ways to get a little bit of Bitcoin.

Another way is the way that most people use to get the Bitcoin: buy from trusted Bitcoin broker or service provider Exchange, like Luno. This is similar to the way like when you buy a stock or foreign currency in banks online. This is the easiest way to get your Bitcoin because you sure will find someone who will trade off Bitcoin them to you on the platform.

You can also have a Bitcoin with doing the mining (mining), but this way is very hard to do normal people. Most mining is done by larger companies with sophisticated tools and very expensive, so it is difficult for people or computers to compete with the company. So, if you do not have the expertise and the money to spend is very much, you better buy or find a Bitcoin.

 

Bitcoin As Payment Systems

What Is Bitcoin – How do we transfer money to thousands of years ago, when we lived in small villages, know and trust each other? We easily do barter, as we did with the cash at this time.

But when money moved online, this will be a little tricky. Bank and credit card services to resolve this issue with ‘ ledger ‘ system (‘ cash ‘ system)–a saving account and history shows who owns what.

When John did the online money transfer from one person to another, the bank was the one who did the transfer of John to others.

John can’t do it myself because there is a risk he is cheating-it can copy and paste digital money (because all of it is just numbers on a computer) and submitting it to two different people.

So, we trust the bank to send money and make sure only one person receiving the money. The Bank can cheat, but we believe they are not committing fraud.

If the transfer occurred on the same bank, it is easy to do. But if the bank is different, it will be a little complicated because they may have different cash system and need to be matched.

Therefore, they charge you small, and this transfer usually takes up less time.

When the bank and the financial system is derived from the different countries, things became more complicated: language, system, currency, and more people should be doing the coordination and so on, so the transfer cost and time increase.

That is why the current financial system is extremely complex. The system is very complex from a variety of existing cash systems in the world.

Bitcoin changed all that. With what? Bitcoin is a system of cash that synchronize across the internet so that everyone can access the same treasury account in real time regardless of who and where he is.

The result? Money can be transferred from one party to the other party without delay and the cost is very high. Like when the money is used once before the world is so big and complicated.

Bitcoin payments system used for what? The answer: whatever you use with the usual: send money to friends and family – both local and overseas, to buy goods online, receive a salary, and so on.

Bitcoin as digital gold

Centuries, gold has been viewed as objects of high value by many community groups in the world. It is important to note that the gold itself has no value – gold is simply a chunk of stone that sparkles.

Gold value derives from the fact (which is a little confusing) that everybody agrees that the gold has a certain value, and hence gold considered valuable.

The reason why people choose gold than other objects it is important to understand because gold has certain characteristics that make it a “store of value” that is better than other objects:

First, the gold is rare.

That is, the amount of gold limited (there are only a few of the gold in the world-if too much then everyone can have it and the gold will not have any value).

Gold also is soft (gold can be melted down and molded into a variety of units as small as coins,

and more importantly when you change its shape into smaller units, it will not lose its value-not like diamonds). Gold also stable and not degraded, easily known and hard to emulate (made knockoffs fake ones).

Bitcoin has all the same characteristics as gold. The number of Bitcoin is limited (there’s only a certain amount to be produced),

Bitcoin can be broken down into smaller units without losing the unit value (1 = 100 million Bitcoin Satoshi-smallest unit of Bitcoin, same ascents in Dollar or pennies in Pounds,

so that we can buy less than a Bitcoin), technology Bitcoin also stable and will not degrade, nor perhaps can be made false Bitcoin.

In addition, unlike gold, you can move your Bitcoin wherever in the world in a matter of minutes, regardless of the amount of the Bitcoin. That’s why people call Bitcoin as digital gold, digital gold, however.

Bitcoin has value as well as a payment system.

More and more people use the Bitcoin for payment, the more valuable this payment system.

Buy Bitcoin similar to buy shares of Visa, and then use the stock to buy soda at 7-11.

Because you pay with your Visa stock, then use the more, Visa (payment system) Visa is increasingly widespread and increasingly valuable, so the value of the shares of Visa will become increasingly valuable (including your own Visa stock value!).

The value of Bitcoin comes from the gold-like characteristics, and also functions as a payment system like Visa.

How does Bitcoin price determine?

Many people are curious about how the price of the Bitcoin is determined. First of all, know that the workings of the Bitcoin price movements are the same as currency or other objects. Let’s take the example of how the price of a specified object-we can use orange as a parable. How much is the price of oranges?

The answer is: it depends. The first Orange pricing points are with two things: how much is desired by people who sell them, and how much is desired by people who buy it.

If John wants to sell oranges at a price of $ 3,000,-and Sarah just want to pay $ 2,000, then the deal doesn’t happen.

But if they agree with a certain price, for example, $ 2,500,-then the transaction occurred. In the summer, then more and more people want to buy Orange citrus, so the price goes up. Or if there is a glut of inventory so orange is reduced, but many people want to buy Orange, then prices will also rise.

Bitcoin and other currencies are a bit different from the Orange because they are ‘ homogeneous ‘ — one dollar is identical to the dollar, such as identical with other Bitcoin Bitcoin.

Orange, on the other hand, can differ depending on large and quality. In other words, more easily determine price Bitcoin or currencies because of the identical.

Many people do not realize that other currencies also works exactly the same as Bitcoin-if you’re holding a coin or paper money in your local currency in your hand today,

at the same time, there are millions of people who do the buying and selling of the eye your local money,

so even if you feel your currency rates stable, in fact, these prices change constantly.

If you want to exchange your money into local currency to another, e.g. to USD,

today you might pay with 10 pieces of your local currency,

but the next day can only be 11 or 9. Bitcoin work exactly like it-you can imagine it like other types of currency than what you have now.

 

HOW DO I SAVE A BITCOIN SAFE?

Recognize scams will reduce the risk of

Con artists are always looking for ways of avoiding the enforcement of existing laws and regulations. They utilize the existence of technological innovation and take advantage of people who are still not fully understood about the specific technologies. Therefore, as with any new technology, there are risks associated with digital currencies. We want you to understand the risks and make sure that you do the ways to protect yourself and your money.

Phishing attacks

If you have a digital currency, you will be a target of interest to criminals cyber. Luno will keep Your Bitcoin safely. But just you alone are able to ensure the security of your password.

‘ Phishing ‘ is an attack in which criminals use fake website that the original ‘ look ‘ to trick you so you enter login details including your password. They then use your password to access your account.

This type of phishing attack

Phishing site. Scammers create fake websites to lure you enter Your log in details.

Stay alert and don’t click on Google ads are false.

Before entering the details check the website address carefully to make sure you are in the correct URL.

Phishing via email.

Fraudsters will send an email that looked genuine and trusted in an attempt to convince you to give out your login details. Check the sender’s email and make sure you have redirected to the original URL and the website actually.

Spearphishing. Fraudsters try to get information about a particular individual. If they know you have a digital currency,

scammers can pretend to be employees of the digital currencies and then contact you via phone or email.

You may think you will easily recognize the trap and avoid it. But ask yourself, are you 100% sure against any links you’ll ever click?

Do you dare to risk all or Your Ethereum Bitcoin?

The following steps should you do to keep yourself safe.

Always make sure the address of the site you’re visiting is true and not a fake website

Use two-factor authentication in your whole wallet Bitcoin and your email address

Use password manager

If you are a user of Gmail accounts, you should more often perform security checks

Investment scams

Because digital currency is still relatively new, emerging in the guise of investment scams trying to steal your money. You can recognize the various forms of fraud in the guise of investment currencies if you’ve grown accustomed to.

Cloud mining scams

99% of cloud mining operations are always suspicious. Bitcoin legitimate miners will tell you that the profit margins on mining are very small. There is no one out there who mine the Bitcoin and can produce 10%, 20%, 30% per month as promised this kind of fraud. Avoid this thing no matter what.

Multi-level marketing scams

If the company is promoting their referral program is much more aggressive than the actual product,

most likely the company is a scam.

Typically, they pay investors long used new investors ‘ deposits until eventually they will disappear and run off with your money,

and just at that moment, the victims realize that they actually do not know to whom they send the money them.

“Multipliers” Bitcoin, or investment programs with large fortunes (Ponzi scheme)

This type of fraud is convincing you that they have found specific methods or secrets to making a profit. Be it a trade on your behalf, or technical aspects of digital currency. But in fact, they have not found anything-even if they have committed a big secret that benefits,

they do not need your investment, right? These people are the highly skilled fool you. Beware.

How to recognize scams

Know in depth before investing in anything. If the advantage is promised sounds too good to be true, chances are it is merely an illusion/deception. If your investment company is here, meaning that they are fraudsters.

Fluctuating market

Although this is not related to criminal activity, it is very important for you to note that Bitcoin and other digital currencies are extremely volatile. Price fluctuations can only potentially harmful,

so it is important for you to risk your amount of money is too high (more than what you’re capable of willing).

Remember that during the movement of the market is fluctuating, misinformation can spread news portal.

and digital currency companies may experience service interruptions due to the high demand. You may not always be able to sell your digital currency whenever you want to

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