What is Bitcoin
Tired of hearing about Bitcoin? We’re here to explain exactly what is bitcoin, who uses it, where you can spend it and why use it at home or in business.
What is Bitcoin
The short explanation: Digital Money. Its just like real physical money, except has different benefits. You know how our government “just creates” and prints money? Well a computer network maintains transactions and “just creates” the bitcoins through a process called mining. When your computer mines for the bitcoins, you get paid, they go in your digital wallet and you can use them just like regular money. Just the same as if you went to work and solved math problems all day then you got a paycheck at the end of the week. Same thing here. Your computer is putting in the work for you and then you get the rewards after the work is done.
You know how, just like how in the real world, we are able to transfer person to person without a bank? I can physically give you $1000 out of my pocket and didn’t have to wait for a bank to approve a funds transfers, etc. You can do that with bitcoin too. Its one the major benefits of using bitcoin. Which means fees are lower, you can use your bitcoins all over the world and accounts can never be put on payment processing holds or freezes.
Where did this digital money come from?
Digital money and cryptographic currency had been in the works since the early 80s. People all over the world study math and science to create algorithms that help mold the world we have today. A guy named who uses the pseudonym, Satoshi Nakamoto, published a research paper on digital currency and how it would work. Ever since then, people had been working on building the network infrastructure that houses this cool payment processing and data mining capability.
How does the coin or data turn into real money?
- Transfer it to your Bank – Once the bitcoins are in your digital wallet, send it to your bank and take cash out, write checks, use your debit cards etc… just like normal
- Go to a Bitcoin ATM – pull out real cash from your digital wallet bitcoin address
- Pay someone in bitcoin and have them send you or pickup cash in exchange
- Buy bitcoin online – sell it when the market price goes up and cash out to your bank
Is bitcoin the only coin on the market?
No, frankly anyone can create a cryptocurrency coin. There’s hundreds of other ones on the market. For example, I could have a Pasos coin and say that only X amount of coins are going to be released. The value of the coin really depends on the buyers and sellers in the market. Its only valued at how much you are willing to buy it at. Supply and Demand as well as Trade Volume play a lot into the price as well. If the demand for your coin is high, the price will go up. The main differences between the coins are: how many are in circulation, the mean block time, the Algorithm, the difficult retarget, how often the rewards are halved, how fast they can confirm transactions.
Hit up : http://coinmarketcap.com/ to checkout the current cryptocurrency market prices.
Helpful Bitcoin Tips:
Can I loose my bitcoins or cryptocurrency? – Yes if they are stored on your computer wallet and you get a virus. If they are stored on a physical hard drive or flash drive and somehow get destroyed.
Who’s accepting the ALT coins / CryptoCurrency? – Most merchants right now are just accepting bitcoins, but you can always trade your other ALT coins for bitcoin, cash out your ATL coins, or trade your bitcoins for cash.
How do I know which kind of coin to buy or invest? Be aware that some coins may be a small project with little to no community backing or coins people created for fun. They may be of little value. Check the coin market cap and look at market reports before you make decisions.
Who insures my bitcoins? Most banks have consumer protection laws, but if bitcoins are lost or stolen, there’s no one to help you get it back or limit consumer losses.
Do I have to claim bitcoin investment gains on my taxes? Yes, just like stocks or any other investment you need to claim any capital gains.
I hoped this helped you get an understanding of what is bitcoin. If you need more information, I would be happy to help answer any questions you have. Please tune into Coin Cutie TV on youtube or the best news and product reviews on bitcoin and cryptocurrency.
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