What is Bitcoin ?
For simple and short understanding, let’s say Bitcoin is a kind of digital currency. It is the starting of what is now known as “cryptocurrency“. Cryptocurrency can be defined as lines of computer code which inhibits a monetary value. These lines of codes are actually made up of electricity and high performance computers. The idea of Bitcoins was first invented by pseudonymous, Satoshi Nakamoto, in 2009. We still do not know anything about this personality.
why Bitcoins are so popular ?
The first and foremost important characteristic of Bitcoins is that it works decentralised. No bank or company is responsible for controlling it. It is taken care of by a group of volunteer coders.
The supply of money under Bitcoins are strictly managed by the underlying algorithms. There can be a maximum of 21 million of Bitcoins present at same time, but all of them are not available. Theoretically speaking, if demand increases as supply remains constant, the value of Bitcoins increase.
Complete anonymity can be maintained while transactions. As there is no middle man or validator involved, users don’t need a validation or identity proof while sending bitcoins to another user.
The divisibility of units is a major attraction towards using Bitcoins. The smallest unit of bitcoin is satoshi, which is hundred millionth of one bitcoin (0.00000001). This comes to about one hundredth of a cent. Such small transfers cannot be possible with currencies.
How to get Bitcoins ?
How to get Bitcoins is a question often googled by the newcomers. Remember cryptocurrency is a very vulnerable and volatile idea. So invest wisely only the amount you can afford to lose. So coming back to ‘how to get bitcoins’, Bitcoins are available to be bought on exchanges or from people in trusted marketplaces. Although there are many other ways to get bitcoins.
1. Setting up a wallet
This is first step. Creating a wallet is necessary for storing your possessed Bitcoins, no matter whatever is your preferred method of purchase. Now the wallet can be of different categories like online wallet, desktop wallet, mobile wallet or an offline wallet (which generally includes hardware device or paper wallet). Be cautious whatever your wallet kind is, keep your password and keys (which will be a string of characters) safe. Or else you lose access to your Bitcoins.
2. For buying online, required to open an account at an exchange.
Cryptocurrency exchanges function as a mediator who will sell and buy bitcoins on your behalf. The exchange charges a fee which you can pay via PayPal, bank transfers or credit card. Once the exchange receives the desired fee, it will purchase bitcoins as per your paid money on your behalf and deposit them in an automatically created wallet. You can then transfer the amount to your own off-exchange wallet. Presently the largest Bitcoin exchange in the world in terms of US$ is Bitfinex.
3. While buying with cash, a purchase method must be selected.
There are many existing platforms like LocalBitcoins, who help you search for individuals near you who can exchange your bitcoins in return for cash. LibertyX is a site which informs you about retail outlets across US where bitcoins can be exchanged. If you are looking for bank branches who are willing to exchange Bitcoins for money look up WallofCoins, Paxful and BitQuick.