What Is Bitcoin:
There is no doubt that Bitcoin has become a very popular Buzz Word of the past couple of years but what exactly is it and how can you make money from it?
Hopefully, this short guide will help answer those commonly asked question of what Bitcoin is.
The first thing you need to understand before learning what Bitcoin actually is, is simply understand what money is.
So, whenever you do a job or work for someone, you generally get paid for doing that work. The money you receive for doing any job, is simply the preconceived value that somebody believes you deserve for the work done. The money you receive for your work, then enables you to purchase other things of value.
Throughout history, people have used many different items to purchase goods and things of value. For instance, before money as we know it in today’s society, people would buy items of value with an array of different things such as cattle, wheat, salt and gold to name but a few. The reason why people could use these things to buy other products, was simply because they too were believed to have value.
Over the past centuries, things have changed and now we use paper money (bank notes) and coins to make our purchases. The reason why we can use these, is simply because everybody trusts this way of payments and it is now known and accepted as ‘Legal Tender’. This had moved even further now, as when have all become used to the digital age and now make our purchases via the Internet, with our credit cards, PayPal and other forms of Wire transfer.
This form of money transfer is possible because everyone has a bank account and the money is centralised within the bank system. The banks keep a track and account of all our money and in affect, have control over how the money is managed. We all trust the banks to manage our money correctly and keep records of how much money we have at any one time, as well as keeping track of all our transaction. However, without going into too many details, as you can imagine, the centralisation of this system and giving the banks total management of our money and the authority to print money, can cause many problems such as inflation, resulting in decreasing the value of money. It also means that they can the banks can freeze your accounts and in some circumstances confiscate your money.
When Was Bitcoin First Introduced:
In 2008, a man called Satoshi Nakamoto released a document online that suggested a new way of decentralising currency and this was know as Bitcoin. Unlike the banks, Bitcoin was a transparent ledger, which allowed you to take a look at all the transactions and balances at any time. The one things that you could not do with Bitcoin, is find out who owns them and who is behind the transactions.
In May 2010, the first Bitcoin transaction took place and this was actually used to buy 2 pizzas! The transaction was 10,000 bitcoin, in exchange for 2 pizzas. The current value of those two pizzas is now 100 million dollars!
As we mentioned previously, due to the fact that Bitcoin is not centralised, it means that there is no one single ledger. Every computer that is taking part in this system, keeps an up to date copy of the ledger, which is know as the ‘Blockchain’.
Due to the fact that Bitcoin is digital, there are only rows of transactions and balances and no coins that you can physically touch.
Owning Bitcoin, simply givesyo enables you to access certain Bitcoin addresses in the ledger and then send from that address to other addresses in the ledger.
Why Is Bitcoin Big News:
Bitcoin is big news because it provides an alternative to the current money system and one that neither the Governments or banks can control. This is one of many advantages of Bitcoin and why people have started using the system.
Bitcoin provides you with total control over your money and with Bitcoin, there is only you who has access to your funds.
Neither the banks or the Government can confiscate your money or freeze your account.
Using Bitcoin also cuts out many processes of transferring money, which meansit is cheaper to use than other Wire transfer options.
How Can You Use Bitcoin:
One of the advantages of Bitcoin, is that is opens up Digital Commerce to billions of people around the world, who simply do not have access to the traditional banking system. There are now several Merchants both On and Offline that accept Bitcoin and it is now possible to purchase a number of different product with Bitcoin such as flights and hotels. Most recently, a number of Bitcoin debit cards have been introduced that allow you to purchase goods with the cards using your Bitcoin balance.
However, despite all these big advantages of Bitcoin, it will still be quite a while before Bitcoin is widely accepted by the general public.