Bitcoin in a Nutshell
By: Celeste Bronkhorst
Tags: Cryptocurrency Investment, Bitcoin, Guides And Tutorials, Cryptocurrency, Forex

Bitcoin has almost become a household name with rising media attention, and its reputation continues to grow, fair to say. Then what’s the fuss all about? Bitcoin appeared as a new form of digital currency around 2009 and was created by a clever chap named Satoshi Nakamoto from the off as an open source. We’re informed that his true identity is ‘shrouded in mystery’ like he’s some kind of Marvel superhero, I suspect it just means he’s a super nerd, but there’s no doubt, he’s a pioneer for sure…

So what’s it all about?

Bitcoin is the same as any other type of currency, except it is not under the control of any state or financial institution. The idea is for it to be owned and operated by its own party. Bitcoin is de-centralized and managed by representatives of peer-to-peer who all engage in new transaction activities and store previous activities in what are known as ‘block chains’. This implies that a complete ‘copy’ of all transactions is stored locally and used to validate new activities between participants, thus preventing any entity from malforming, inserting or creating fake transactions within the block chain. The confidentiality of Bitcoin transactions is secured by this ‘consensus’ approach.

Bitcoin functions in no different way than PayPal in that you have a digital wallet with a unique address where Bitcoins may be sent to you by individuals. On your computer, you can simply install a wallet, or you can download the complete Bitcoin wallet and participate as a node in the network. With risky investors playing on the highs, Bitcoin’s value is very much an outcome of supply and demand. A single Bitcoin (shown as 1.0000000) is currently worth £ 573, or $ 935. In either of the 8 decimal points, you can buy Bitcoins, so for instance, 0.0100000 will cost you £ 5.70 and 0.1000000 would cost you £ 57.00, no wonder that Bitcoin received its name!

OK, where do I buy Bitcoins?

Unless you have some Bitcoins coming your way via a payment, you will need to purchase Bitcoins in your existing currency. Purchasing is all about trust as it is not regulated so if you don’t want that risk I highly recommend you try these sites https://cutt.ly/qhnF0WM or https://f.ls/6KbDq They are great for either buying or selling with great options no matter where you are from.

The Bitcoin coal face

Bitcoin mining, as it is called, is the method of creating (and securing) Bitcoins and a small payment is charged for the time and effort used by your hardware and the amount of participation in the form of Bitcoin units. This is achieved through a variety of methods, from using the CPU or GPU of your own PC (not unlike other grid-based BOINC projects such as Seti @ Home) to using ASIC miners (Application Specific Integrated Circuits), which are designed for the unique purpose for which they are created, which generates Bitcoins in this case. Unless you have substantial investment to buy powerful ASIC miners such as those that can run at 600 GH/s from butterflylabs.com (Hash’s per second), you will have to look at USB ASIC miners like the famous 336 MH/s producing BlockErupter. You can build your own USB hub type rig using the BlockErupters, running lots of them simultaneously. The truth, though is that to make some serious money from Bitcoin mining, it may be too late in the game. The difficulty of the Block Chain (Hash rate) is now such that even entering and contributing to a mining pool, where miners work together and share income, is likely to see more electricity expended than any real financial gain. There is also a maximum limit of 21 million Bitcoins and it is currently around 12.4 million and as more miners enter, the sooner this limit will be reached. It is now more likely than producing them that you can make money purchasing Bitcoins themselves.

The future of Bitcoin…

As the cost has been unpredictable, Bitcoin is an evolving technology, but lately it has started to become more secure as the user community expands. Bitcoin is seeing the number of transactions hit as much as 100,000 a day as of this writing. Although banks and large corporations still have to decide whether Bitcoin is a threat or an opportunity, there is no question that they are starting to sit up and take note of this new digital currency that continues to expand its user base on a daily basis. Interestingly, our enigmatic Satoshi, the founder of Bitcoin, is believed to own $1 billion worth of Bitcoins, depending on the fluctuations. Don’t we all wish we’d had such an idea…

I hope this article gave you clarity about the in’s and out’s of bitcoin. I highly recommend both sites mentioned above, you can find them here as well if you are interested. Thanks for reading. https://cutt.ly/khnGpXr or https://f.ls/6KbDq