First, we got the humanoid robot, then we got the self-driving car and now we have a virtual currency that allows us to make even more instantaneous payments and be exchanged to any other national currency. That is right, it is Bitcoin that we are talking about, the future of the 21st- century financial world. In the past few months, Bitcoin has been one of the buzz words on the internet, so we decided to have a closer look at it and see how and why you should give it a try.
WHAT IS BITCOIN?
The basic definition describes it as a type of cryptocurrency, because it is secured by using cryptography. This digital currency appeared 9 years ago, launched by Satoshi Nakamoto, a fictitious name that is still not clear whether it refers to a group of people or a single person. The entire concept of Bitcoin is based on a Blockchain technology, which stands for electronic money storage and secure payments, without requiring to provide the name of the person or a bank.
The purpose of this digital currency is to offer its users lower transaction fees than the other e-commerce payment mechanisms and eventually, to replace the physical currencies (USD, GBP, EUR, etc) that are used for both cash and online transactions. Beyond a shadow of a doubt, its inventors dream big and they seem to be getting closer and closer to accomplishing their ultimate goal, because up to present day, there are 55 countries in the world and around 15 million users with digital Blockchain wallets that have enthusiastically accepted this incredibly famous virtual currency.
We are proud and excited to announce that Kobelli, your favorite online jewelry store, is one of them.
WHAT MAKES BITCOIN UNIQUE?
Developing a digital currency that facilitates the online transactions is not such a big deal, we would all agree with that; the world has seen way more impressive and exciting inventions than this one. Then, what is that “peculiarity” that makes BTC so attractive and popular? We won’t keep you in suspense, here is the answer: BTC is not issued nor controlled by any government, bank or private company and that means only one thing – it is fee-free. In other words, by excluding the interference or manipulation of central authorities, the user/owner of this Blockchain wallet ensures 100% immunity.
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HOW BITCOIN WORKS?
In the following lines, we will give you a quick explanation about how the BTC network works. Obviously, in addition to the currency itself, there must be another party that is going to manage with that currency. This can be a company (like Kobelli) or an independent individual and they are called “miners”. They are considered decentralized authority and they work as a backdrop for the entire network’s credibility. Miners get motivated by the release of a new bitcoin at a fixed, sometimes declining rate that serves them as a reward. Next, you are going to get introduced to each of the elements that constitute this network.
To become a miner, the first thing you need to do is to install the BTC wallet on your device (mobile phone or computer). Then, you will be provided with an address that is going to be visible only for you, but it will become visible to your friends in the network whenever you will have to pay them or get paid by them. Basically, it works the same way as with emails with the only difference that a BTC address is provided for one use only (at least that is how the experts in this field recommend).
The blockchain we previously mentioned is actually the heart of the entire network and it is often referred to as “shared public ledger” or simply “ledger”. Therefore, all transactions that have been confirmed are registered in this blockchain, so that your digital wallet can calculate its spendable balance and “figure out” if you have enough BTCs for your future transaction(s). As previously mentioned, this whole process is powered by cryptography.
Just like bank accounting, a Bitcoin transaction is realized between two digital wallets that make part of the blockchain. These wallets feature private keys (secret pieces of data) used to “sign” the transaction and prove that it truly comes from the owner of the given digital wallet. Once issued with a signature, nobody else can claim ownership of that particular transaction.
The transfer (broadcast) of transactions in the network is called mining. All pending transactions are given in a chronological order and in order to be confirmed, they must be filled up in a block that corresponds to a rigid cryptographic rules which are going to be further examined and verified by the network.
To quickly understand how Bitcoin works, take a look at this video:
HOW MUCH IS BITCOIN WORTH?
Currently, the value of one BTC is equivalent to $10,790.58 and it is expected to keep growing at the same pace with the growth of interest for virtual money. Only a year ago, the worth of a single BTC was $770, so it has marked an incredible jump in value over the last 12 months.
WHY “SATOSHI NAKAMOTO” IS A PSEUDONYM AND NOT A REAL NAME?
The real identity of the creator of this digital currency has not been officially confirmed, probably because of two simple and logical reasons; the first one is that the inventor of this phenomenon wants to keep their privacy and avoid confrontation with the governments and the media; the second reason might be related to safety, because it is estimated that the inventor of this currency should be owning around $5.9 billion of BTC worth. We repeat, $5.9 billion.
• Simple, easy and quick transfer of funds between two parties.
• Skipping the common charges and fees by banks and other financial institutions.
• Secure payments.
• Buying real things. Although this money cannot be seen or touched, it can still be used to buy products online or services, such as book flights and hotel reservations. Practically, managing a BTC wallet is the same as operating with the credit card issued by your bank.
• In case of a computer crash, the virtual cryptocurrency balance will be wiped out if there is no backup copy of the user’s holdings. This means that if you lose your digital wallet, you will automatically lose the amount of BTCs that were in it.
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HOW TO EARN MORE BITCOINS?
So far, there have been 3 most functional ways to earning BTCs:
▸ Get paid with them.
If you are running an online business, you can include this virtual currency as a payment method by simply displaying the message “Bitcoin Accepted Here”. For the realization of the online payments from your customers, you will need to establish a particular Bitcoin merchant tool.
▸ Work for this network.
Freelancers and other self-employed individuals have the opportunity to earn BTCs by finding a job on any of these websites:
▸ Lend them.
You can start your own BTC business by lending them and be repaid in the same currency, obviously, with an added interest. You can lend them to people you know, a website that deals with peer-to-peer transactions or deposit them in a virtual BTC-friendly bank.
▸ At casinos.
There is a significant number of casinos, including BTC gambling sites where you can try your luck and earn (or lose) more of this virtual currency. So, it is up to you whether you will go for this option (or not).