What is bitcoin and what can you do with it?

What is bitcoin and what can you do with it?

We have all heard of Bitcoins, the internet’s currency but have you ever wondered what Bitcoin is?

Simply put, Bitcoin is a computer file that can be stored in a digital wallet app on a smartphone or a computer.

People can send Bitcoins or a part of Bitcoin to your digital wallet and in return, you can send Bitcoins to others.

Where are transactions recorded?

Every single transaction is recorded on a blockchain system. The blockchain system is a public domain and people can view transactions of Bitcoins on the Blockchain ; this way, people can keep track of what is spent and wha Bitcoin belongs to whom.

Bitcoin is known as the digital currency or the cryptocurrency and is 100% virtual – which means it doesn’t exist physically but is only available to trade on line.

The value of the Bitcoin is given in the private code inside every Bitcoin.

How can Bitcoins be created?

You can buy Bitcoins using real money. Or you can create them on line.

You can be paid for services or goods in Bitcoins. Many people are using Bitcoins to pay and also to be paid for services or goods purchased.

How are bitcoins valuable?

Bitcoins are valuable mostly because people can pay each other using Bitcoins. Some people are even willing to buy Bitcoins using real cash.

Why do people want Bitcoins?

Bitcoins are popular because they are not governed by a monetary system ; Bitcoin transactions are not recorded in any Central Bank or monetary system unlike money or card payments.

This makes Bitcoins popular with many people. Yet, for that same reason, Bitcoins can be dangerous to trade in.

When there is no record, it is not easy to track the payment which can leave it open to illegal transactions.

However, Bitcoins transactions cannot be reversed. If you have mistakenly sent your money to a scammer, there is no way for you to recover your money. There is no safety system in place for Bitcoins – yet.

Are Bitcoins safe to use?

Every Bitcoin transaction is recorded on the Blockchain system, making it impossible for someone to fake Bitcoins, copy them or spend someone else’s Bitcoins.

However, Bitcoins can be deleted on your device which means they could be gone if something goes wrong tech wise.

At the same time, there is a possibility that there could be thefts of Bitcoins from the sites that store them on behalf of others.

Bitcoins have gone up and down in value since they were first created in 2009 ; many people also feel that Bitcoins are not safe enough to be invested in, using real money.

However, the debate goes on – in the meantime,  people continue to trade in Bitcoins.

Today, billion dollar businesses such as Microsoft, Expedia and Pay Pal, among others, accept payments in Bitcoins while there are businesses that trade in and accept Bitcoins everywhere.

It has it own exchange rate and price index while forums that discuss and share information on Bitcoin sales and transactions are very much active.

Maybe one day Bitcoins can become more than a novelty and become the currency of the next generation. And maybe entrepreneurs too might find it a great way to do business.

 

 

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