The emergence of digital currency has been cropping our minds and has grabbed our attention towards its emergence in the 21st century, where it’s surprising to track how technology has taken over most of the traditional methods and services and replace them with a convenience that’s just a click away! Today it’s no wonder how people have shifted from old currency exchange methods to digital currency, digital wallets and have adopted a cashless regime of transactions.
One such digital currency form that has taken the market by storm is the usage of “Bitcoins”.
Bitcoin currency was found with the idea of a ‘decentralized currency form’ that has no government, financial institutions, or central authority to govern over. It is a cryptocurrency meaning it’s intangible, available only online, and there is no physical form present. It uses “blockchain” technology (data stored in blocks sequenced one after other). So in order to access data, the blocks have to be accessed, and in the case of bitcoins specifically, these blocks are protected with mathematical problems that have to be solved, and every time a problem has solved, a block of bitcoin is processed, and miner or the person solving them gets new bitcoins.
It has to be “mined” like gold, but this mining is not digging in the earth but extraction out of computer coding. In total, there are only 21 million bitcoins coded by the founder, out of which 18.5 million bitcoins have been mined.
The unit of bitcoin is one-hundredth of a million called ‘Satoshi’ after the founder’s pseudonym name.
Let’s look at how this currency form came into existence.
Bitcoin is the first-ever cryptocurrency, a kind of digital asset which has been secured with cryptography. It became available for the first time in 2009. It’s quite a contrary fact about the famous Bitcoin that the founder(s) of bitcoin itself is/are an anonymous identity. The anonymous founder(s) have pseudonym as “Satoshi Nakamoto”. Their vision behind the bitcoin introduction was that the “goal of the technology was to create a new electronic cash system” that is completely decentralized, meaning that there should be no central authority ruling the liquidity and flow of electronic currency. Thus, their vision resulted in the creation of 21 million bitcoins in total.
In 2010, First-time bitcoin usage was seen when a person spent them on buying two pizzas. We can rightly feel that food is the most expensive need of a person; after all, the person has given bitcoins worth millions to feed his hunger that too for just once!
Jumping to 2011, when the anonymous founder(s) Nakamoto shared the source code and the domains with the community of people using bitcoin and was never heard communicating again.
The bits of Bitcoin
There are several ways with which a person can obtain and use bitcoins; some of them are described below.
(1) Through Mining
(2) Through Trading
(3) Through Bitcoin Exchanges
(4) Through Accepting payments etc.
Mining of bitcoins is a term similar to the mining of gold and diamond in terms of ‘searching’, but when it comes to extraction, gold and other minerals are extracted from beneath the earth but bitcoins, are extracted from a computer coding. To extract the bitcoins, extremely powerful computers are required to solve the mathematical problems which are necessary to access a forthcoming block of bitcoin.
The user establishes a bitcoin address to receive bitcoin they mine, kind of a virtual home address which has a string of 27 – 34 numbers and letters just similar to a bank account number.
How is mining done?
(A) Buy strong hardware:
There is special hardware designed for mining and known as ASIC or Application Specific Integrated Circuit Chips. These computers use less energy and imply more outputs per second.
(B) Get wallet to store bitcoins:
A virtual bitcoin storage or wallet is necessary to store bitcoins safely with their bitcoins address that has two keys – Public key (just like a bank account number) and Private key (for off transactions which are like the pin of ATM card not to be disclosed to anyone otherwise all the currency would be lost).
(C) Get mining programs:
Various mining programs are available to buy and start using.
(D) Start mining:
You can now mine your own bitcoins. If you feel tensed about mining, join some mining pool. Mining pools are groups of people that work by cooperating with each other, where miners serve their skills with computer programs. Whenever there is some profit, it gets divided according to the power of group members.
Trading bitcoins is similar to online trading of other goods; simply put forward, it is the buying and selling or exchange of commodities here; the commodity is bitcoin. Online trading is associated with risks; thus, it is essential to have knowledge in this field and to know how to trade bitcoin successfully with various trading strategies. Traders usually follow some work styles with their trades, e.g., some are day traders meaning that they buy and sell on a daily basis. There are other work styles as well, and sometimes traders behave like an alarm clock that just needs input and then wait for the right time to ring!
Through Bitcoin Exchanges
Bitcoin exchanges are nothing but cryptocurrency exchanges that trade in the form of digital currency and other assets. Through an exchange, one can acquire bitcoins by paying in another form of asset.
Through Accepting payments:
One can simply calculate the current value of bitcoin and accept it in payment and store it in their e-wallet.
Bitcoin currency has gained a lot of value and worth because our community is wholeheartedly welcoming every new opportunity that possesses the ability to reshape and restructure our lives in better and easy ways possible, and thus, it won’t be wrong to assume that digital form of currency is the trend that might overpower traditional ways of payment making and taking completely!