What is Bitcoin?
This a beginner friendly Blockchain and Bitcoin Guide for Beginners-2021
Bitcoins which are based on blockchain technology is a currency, like your, dollar, Euro, Naira etc, but it is a digital currency.
Created electronically and held electronically. Unlike the normal paper currency, which is printed, and controlled by a Central Bank no one controls bitcoin.
Apart from bitcoin, there are other cryptocurrencies or digital coins, which can after bitcoin. They include Ethereum,(ETH) Lithcoin,(LTC) Dash, Monero, Zcash, Dogecoin, Golem, just to mention but a few.
Bitcoin was created in 2009, Introduced to the world on 3rd January 2009, then it was sounding like a joke, it was created by a man who chose to be called Satoshi Nakamoto, some sources have it that this name was an Alias, that the real name of the inventor(s) is quite a mystery.
Bitcoin transactions are made person to person (peer to peer) that is no middlemen, no banks! So actually you don’t have to give your name, all transactions are recorded in a public ledger known as the blockchain.
Bitcoin is represented with BTC, it has other smaller units; FOR EXAMPLE, 1/1000000000 is referred to as Satoshi or represented with: stat. we also have the millibitcoin (mBTC) 1/1000. This is just like your normal Dollar and Cent, Like your Naira and Kobo, for example, 100kobo=1naira.
Terminologies associated with Bitcoins
The blockchain is a public ledger where all transactions are recorded, the maintenance of the blockchain is accomplished by a network of communicating Nodes that are running the bitcoin software.
In the blockchain, bitcoins are registered to bitcoin addresses. To be able to spend the bitcoins, the owner must know the corresponding private key and digitally sign the transaction. The network verifies the signature using the public key.
If the private key is lost, the bitcoin network will not recognize any other evidence of ownership; the coins are then unusable, and effectively lost. For example, a businesswoman in Lagos, Nigeria claims that she forgot the password (key) to her bitcoin wallet, she said that in that wallet is a $300 dollar worth of Bitcoin, well she forgot about it and moved on.
When you see the word “mining”, what came to your mind? No doubt you likely thought of precious metals, like gold, silver, coal, well mining bitcoin looks like that just that everything is mathematical and electronic, in fact, it is the process of mining that brought about the name: blockchain. How?
Mining is a record-keeping service done through the use of computer processing power (Hashpower/hash rate)
In our subsequent article, we will see how we can claim bitcoin through mining even without knowing how to mine ourselves.
Miners keep the blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block.
Each block contains a special computer Algorithm known as a cryptographic hash of the previous block using the SHA-256 hashing algorithm, which links it to the previous block thus giving the blockchain its name.
One of the qualities of money, is scarcity, how is this achieved, simply put, it is a scare resource, there are over 21 million bitcoins, when all bitcoins have been mined, then all will be put into circulation
This means that whoever it is that created Bitcoin has set a kind of monetary policy based on artificial scarcity at bitcoin’s inception that there would only ever be 21 million bitcoins in total.
Their numbers are being released roughly every ten minutes and the rate at which they are generated would drop by half every four years until all were in circulation.
Put simply this is where bitcoins are stored, actually, bitcoins are inseparable from the blockchain ledger, but there is a sort of personalization where an individual can access with there own private key.
while every transaction must still be visible through the blockchain. From your wallet you can see the amount/ dollar equivalent of bitcoin that you have, you can then send and receive.
To get a wallet for any cryptocurrency just go to the official website of that digital coin to see the recommended wallet. For example, let’s say Proscoin, (as at the time of writing this article proscoin is not yet widely accepted) go to properityclube.com you will see a link that will direct you to pro wallet/ proscoin wallet, for bitcoin go to blockchain.info and click on a wallet or create wallet, etc.
This is a term used to show that bitcoin has no centre of operation, in a lay man’s language it means that there is nothing like a Central Bank.
Now that you have seen what this digital money is all about? And all evidence points to fact that the world is revolutionizing every day, what will you do?
Bitcoin price is skyrocketing every day, will you invest? Is it still advisable? Are they other ways you can get bitcoin other than mining and buying? What are the alternatives (altcoins) to Bitcoin?.
How is the blockchain technology disrupting the energy industry?
These questions will be answered in our subsequent articles.