What is Bitcoin About
What Is Bitcoin About?
This is one of the most frequently asked questions in the world right now. To make it simple, Bitcoin is a digital version of money where the transactions are done online.
“It is a medium of exchange just like your normal everyday currency such as the USD, but designed for the purpose of exchanging digital information through a process known as cryptography”.
What this means is that these transactions don’t need validation from the banks or the government to work or thrive, due to its decentralized nature. The digital transactions take place directly between buyer and seller without an intermediary, such as a bank, to collect and distribute funds. The transactions are recorded in a distributed ledger called a blockchain.
The Blockchain
This blockchain technology may be the most important single development since the invention of the internet itself. So, what is Bitcoin about? Well, it’s going to change the way business gets done, how documents are exchanged, how real estate is sold and registered, how stocks and bonds are tracked, how inventory is managed and how people transact their financial affairs. It’s going to be a game changer.
Bitcoin has certain rules, also known as the Bitcoin protocol, which makes it work. The ingenious part of Bitcoin is not necessarily the creation of the currency but rather the creation of the Bitcoin protocol.
Bitcoin successfully found a way to build a decentralized digital transmission system which means the network is powered by its users without having any third party, central authority or middleman controlling it. Neither the central bank, nor the government has any power over this distribution system.
History Making Technology
After decades of over-regulation and central bank meddling, the financial markets are anything but free. The problem with a centralized network in a payment system is that it’s done by a central server that keeps track of your balances and they charge you expensive transaction fees for the ‘pleasure of doing business‘ with them.
Now this oppressive government controlled system has reached a tipping point. For the first time in history, technology makes it possible to transfer ‘property rights‘ (such as shares, certificates, digital money, etc.) in a fast, transparent and very secure way regardless of acceptance or approval of governments or the participation of traditional banks.
The first ever-successful cryptocurrency (Bitcoin) emerged from the invention by Satoshi Nakamoto. This was then followed by other types of crytocurrencies competing with Bitcoin.
Fast and Secure Transactions
These types of blockchain transactions are fast, secure and global. Transactions are actioned immediately in the network and are confirmed within minutes. Since the transactions are managed by a global network of tens of thousands of computers, your physical location is not relevant. It is possible for you to transact with someone in your immediate vicinity, or living on the other side of the world.
You have more control over your account and your financial affairs. That’s totally secure due to the decentralized network of peers which keeps a consensus on account balances and the transactions made.
Compared to a traditional bank account, which is controlled by people you don’t see and governed by rules you don’t even know exist. Plus the fact that your typical bank account can be frozen and your money seized by any government at any time.
The ability to make anonymous transactions using cryptocurrency is especially appealing to anyone wishing to preserve their privacy and it also gives everyday people the ability to store wealth online. In a way, that your money is ‘close’ enough to you – but far enough away from the greedy hands of any government or its agents, because in essence, its invisible to them.
How it Works
This short video (below) gives you a quick over view of how Bitcoin works
Apart from Bitcoin being the first ever decentralized peer-to-peer network that is powered by its users without requiring any central authority. It is the pioneer of the Blockchain Technology that made digital money possible and is the gold standard in the cryptocurrency network.
Thanks to this blockchain technology, you have ultimate control over your money and your transactions are safe and very secure without any unnecessary costs on monetary transactions and you have the advantage if you are a seller, that these transactions are impossible to be tracked or reversed.
Your transactions are practically immune from any influence of your government and its manipulation. So, it is possible to be able to pay and receive money anywhere in the world at any given time. The transaction is done with minimum processing fees, thus preventing users having to pay extra charges from banks or other financial institutions. Nor are they subject to capital controls or export restrictions (where the government try to control what you can do with your money)
What Can Bitcoin Be Used For?
Bitcoin can be spent for different purposes and all transactions are completed securely online. There are at least three different transactions that can be performed when using cryptocurrency:
- Bitcoin Trading
Bitcoin can be used to buy other cryptocurrencies and for trading which can be very profitable for both professionals and beginners. The market is new, where arbitrage and margin trading is widely available. The currency’s high volatility has also played a major role in bringing new investors to the trading market.
- Personal Spending
You can use Bitcoin to purchase almost anything! From buying cars to travelling the world. The number of merchants accepting Bitcoin exceeds 150,000 and includes firms like. PayPal, Mircosoft and Dell
- Crowd Funding
Cryptocurrency also provides the chance for you to make personal financial investments. How? By crowd funding. You are able to be part of someone’s success story by investing directly in a crypto crowd funding project.
Other Cryptocurrencies
There are well over a 1000 other cryptocurrencies but Bitcoin is the first ever cryptocurrency invented and remains by far the most sought after cryptocurrency to date.
Over the years Bitcoin’s value has risen tremendously from almost zero to over $5000 per bitcoin to date. Its transaction volume has also reached 250,000 daily transactions.
One major advantage of Bitcoins is that it is impossible to counterfeit or inflate. The reason being there are only 21 million Bitcoins created for mining and at current mining rates, it is predicted it will take until 2140, before all the Bitcoins will be mined.
Lower Risk Than Traditional Currencies
Another prominent advantage of Cryptocurrency is the risks are much lower than using traditional currencies. Most people rarely carry much cash with them, instead, they have credit cards, debit cards and other payment cards available as their perferred method of payment.
Nothing’s wrong with that, except that the thing about these cards is that any purchase you are making, you are giving the end-receiver, access to your entire credit line and private information.
No matter how small the amount of the transaction you have a security breach as a third party has access to all your private information.
Now mostly this ‘breach’ is considered safe because of measures like ‘PIN enabled’ or ‘Pay wave’ methods and charge backs etc, but it still relies on trust. The store or entity initiating the payment does so by ‘pulling’ the designated amount from your account after reviewing the information provided via your card, which is a lot!
No Third Party Involvement
Cryptocurrency doesn’t work that way. There is ‘No Third-Party Involvement’. Instead of ‘pulling’, it ‘pushes’ the amount thats needed to be paid or received, to the other party, without any personal /private/ credit information being required or accessed.
With blockchain the payments are possible without your personal information being tied back to you for the transaction to occur. Your account information is encrypted to ensure the safety of your money and your privacy. It doesn’t rely on ‘trusting’ any third party to not misapporprate your information.
Summary
You probably now have an idea on how Bitcoin works and why it is currently trending. The market of cryptocurrency constantly fluctuates and nearly every day new cryptocurrencies emerge and some might even disappear. Some investors will get lucky and some may lose their initial investment.
Yes, the cryptocurrency market is unpredictable and posses risks for would be investors. But many experts are predicting that Bitcoin is here to stay and it is already making an impact in the world of finance.
Many institutional investors are now investigating the potential purchase of Bitcoin, which will no doubt lead to a massive upswing in its price. Banks and governments are also starting to acknowledge the potential that cryptocurrency and the Blockchain technology holds.
There are already a lot of people buying Bitcoin in preparation against the devaluation of paper backed ‘fiat’ currency.
In Asia especially, the Bitcoin market is flourishing. (Despite recent attempts in China to shut it down [Sept 2017] which temporally saw the price fall, only to recover and break new price levels – see graph above). Instead more and more companies are seeing the effectiveness of the blockchain technology which is rapidly gaining acceptance for its powerful security network.
Cryptocurrency is definitely an investment vehicle worth looking out for. It is no doubt growing in use and acceptance and one day soon, it may emerge as the currency of the future!
Further Reading and Posts
To learn more about how to buy Bitcoin with cash or, Credit Card, PayPal, Bank Transfer, or any other payment methodology and currency you desire (well almost). I step you through the process and show you how to open accounts and which ones to use that give you the most freedom and flexibility. Visit my post ‘How to Buy Bitcoin with Cash‘
| How to Buy Bitcoin with Cash‘ |
To learn more about the many other types of Cryptocurrencies that are available and why they may be a good way to protect yourself from the wealth-destroying policies of governments and central bankers. Also with more than 1000 different Cryptocurrencies now available, finding the ‘right‘ ones can be a daunting experience. You may like to visit my post ‘What is a Cryptocurrency’
| ‘What is a Cryptocurrency’ |
Finally
If you enjoyed this article “What is Bitcoin About?” please feel free to socially share and leave a comment below.
Peter V Crisp
“And if you do I will reward you with a free copy of my book; “Why Invest in Cryptocurrency? And How to Get Started” Which is packed with a lot more detail and information that will get you very excited about the future of cryptocurrencies and shows you how to start investing.
So what are you waiting for?
Accept my bribe and socially share and leave a comment below. – Thanks!
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A great read! I owned 3 Bitcoin about 5 years ago but sold it. Big mistake! 🙁
I understand the Bitcoin technology, but one thing has always confused me. Is there a good way to convert Bitcoin back to USD? Is there a conversion factor?
Also – there are other cryptocurrencies available now. Are there any that you would recommend taking a look at as an investment?
Hello, Stevie. B
I actually answer that question in my book Why Invest In Cryptocurrency? Which I am sending your way, so watch out for it in your inbox.
Also you may like to review my other posts What is a Bitcoin and How To Buy Bitcoin and What is a Cryptocurrency This will give you a great insight into the interesting and exciting opportunity and what cryptos to invest in so take a look.
Thanks for your comments . 🙂
The thing about Bitcoin, and other cryptocurrencies in general is that they’re always going to be volatile. Anything that is worth a darn will have its ups and downs. It’s the long-term value that gives bitcoins a ton of upside.
I just invested a hundred through Coinbase. I know people tend to have differing opinions about Coinbase, but for me the process is simple. Plus, you can get a ten dollar referral bonus for anyone that signs up and invests a hundred dollars.
I do have a question though: what’s your thoughts on other cryptocurrencies right no? I know bitcoins is the big one, but I’ve read from other financial experts that investing in many cryptocurrencies is a great way to expand one’s portfolios.
Do you recommend the same principle?
God bless,
Michael
Hello, Michael. Thanks for your question. I answer that question and a few others you may also have in other posts I have on Bitcoin that you may like to read. What is a Bitcoin and How To Buy Bitcoin and What is a Cryptocurrency Plus you will get a lot more information from the book Why Invest in Cryptocurrency? that is coming your way, so watch out for it in your inbox. 🙂
Great post!
I truly believe that bitcoin has changed the world for the better and will continue to do so. A decentralized digital currency is the currency of the future. I think the thing that really beefs up Bitcoin’s strength versus other crypto-currencies is that fact it serves as the gateway between them and fiat currency. The recent gains may hold or they may not but one thing is for sure…Bitcoin is not going away. Thanks for posting.
By the way, the site looks great!
Hello, Sherman. Thanks for your comments. Pleased you have enjoyed my post about Bitcoins. Certainly and interesting investment right now and certain to get even more so, now that Institutional investors will be coming in. Hope you enjoy the eBook that is coming your way. 🙂
Hello Peter,
I am very new to Bitcoin as I have heard it through news media as well as investing newsletters. I do notice that it is being talked about more lately and how investors should get into it. From reading your article, now I have a better understanding of how Bitcoins work and the fact that there are other cryptocurrencies competing with Bitcoin. What I did not know is that it is not regulated by banks or governments. One question I have is that because it is digital and mostly anything can be hacked, can Bitcoin be hacked in that hackers can take one’s Bitcoins from their account? Will one have a plastic card to shop with using Bitcoins or using their SmartPhones such as ApplePay or GooglePay?
Hello, Sam. Thanks for your comments. Your questions and others are answered in the Book ‘Why Invest in Cryptocurrency? and How to get started’ That is coming your way. for leaving a comment. Enjoy. 🙂
Right off I can see that a lot of work went into this site. It has a well organized and clean professional look and feel and right away I can tell what the site is about. I absolutely love the cartoon guy in the video but I got confused when he referred to the bullet points to the left, though it might have been on purpose.
Looks like a wealth of content available from the links on the site, and I feel like bookmarking so I can learn a bit from some of those posts.
Your incorporation of what appears to be enhanced graphics and videos is top notch and helps the credibility factor.
I think the only thing I could find that isn’t all positive is the collection of posts and articles doesn’t all pertain directly to making money online, but I’m not even sure they have to at this point. I’m a beginner at this, so I don’t have a large experience base to back up this last point.
All the Best…
Hello, Informative. Thanks for your comments. Yes, some of the topics may look like they have nothing to do with making money online but if you read them you will quickly see the connection and how it all comes together. I hope you enjoy the eBook that is coming your way 🙂
I came across this article just at the right time. I admit to being a sceptic, but that is primarily because I don’t know much about Bitcoin. You’ve convinced me that it is something to investigate further.
I would love to know more about how it works, for example I don’t fully understand the ‘mining’ concept and my initial research indicates that it would be cost prohibitive for me.
I would appreciate if you could give further explanation about mining, how to start, and where to start.
Hello, Abdusalam. I cover more detail about Bitcoin in other posts What is a Bitcoin and How To Buy Bitcoin and What is a Cryptocurrency Also of in my book Why Invest in Cryptocurrency? A copy of which is coming your way.
Mining is the process of creating Bitcoins and like Gold mining it becomes more and more expensive as time goes by. This is to ensure that the number of Bitcoins mined cannot exceed 21 Million. Also the miners are the ones keeping the ‘ledgers’ of Bitcoin transactions. The first miners to solve and record the transactions get the credit for the transactions and are rewarded with Bits of a Bitcoin. There are currently tens of thousands or miners and they have to continual upgrade the processing power to keep ahead of the game. So the biggest expense is the electricity costs to run a mining machine. In countries where the electricity is very cheap (subsidised) mining is profitable, as are the miners who where in on the ground floor. The first miners to solve and record the transactions get the credit for the transactions and are rewarded with Bits of a Bitcoin.
However as the price of Bitcoin climbs the costs of electricity become less important, so it may be profitable to be a miner now.
Thanks for your questions and enjoy the eBook that is coming your way. 🙂
Hi Peter,
I loved this article about Bitcoin. I was first introduced to Bitcoin about a year and a half ago. I decided to look into it and have since purchased multiple types of crypto-currency, including Bitcoin. I was wondering what you think of Ethereum, which is the only other big competitor without the Bitcoin name I really hear about these days. What would you say are the trade-offs between them?
Hello, Lizzie B. Definitely worth a look as its number two in the world of cryptocurrencies and it has some advanced features that Bitcoin doesn’t have and Its about 10% of the price so it a contenter for anyone looking a investing in Cryptocurrencies. Thanks for your comments and I hope yu enjoy the Ebook that is coming your way. 🙂
Peter,
Great article on Bitcoin. Learnt new information on the bitcoin despite I have involved into bitcoin mining since 1 year ago. I especially like the statement by Satoshi Nakamoto who see the role of banks that create the financial crash in 2007.
The world needs more information like the article you shared to provide wake up call for the general public- it is time to return the ownership to the users, rather than the middlemen like the banks and big fat financial institution that makes money in between.
Hello, Edmund. Pleased you liked the article and happy you got some value from it. Yes, Bitcoin is certainly an interesting phenomenon right now with it seemly smashing new highs each week while rising and falling 20% and more within a few days. Some people will be making crazy money with that sort of volatility. I’m sure you will find my eBook Why Invest in Cryptocurrency? (that is coming your way) an interesting read also. Thanks for your comments. 🙂
Hi Peter,
Thanks for a fantastic article explaining Bitcoin.
You have explain the in’s and out so that even i can understand it. I did not know their is over 1000 other cryptocurrency, let alone know about crowdfunding and personal spending.
You made it so simple to understand, i have shared your article with several of my friends as we were all at a loss with Bitcoin.
I was especially interested in your paragraph on the security aspect and the fact that their is no third party and even saver than normal credit cards.
Thanks for a great lesson in cryptocurrencies.
Hello, Pieter I am pleased you have found the post informative and interesting. I also have a couple more posts that you will also like How To Buy Bitcoin and What is a Cryptocurrency Thank you so much for your comments and please let me know if you enjoy the eBook I am sending your way. 🙂
Is there any step-by-step guide so that newbies can make safe investments in crypto?
I would like this to help them the good, bad and ugly side of investments and caution them what not to do while looking at crypto investments, especially if getting started. Thank you
Is it possible to raise loans for business using crypto?
Hello, RghtKarma. Thank you for your comments and I am pleased you have enjoyed the article. I am sure you will find the answers to your questions in the eBook “Why invest in Cryptocurrency? that is coming your way. 🙂
Bitcoin is one of the most misunderstood opportunities on or off the internet right now. People need to be educated to the ins and outs of Bitcoin and what it is about and how it works. Thanks for a great high level overview of Bitcoin. This is a great article to share.
Thank You
Hello, Kevin. Thank you for your comments and I am pleased you found the post imformative. I hope ypu also like the eBook that is coming your way. Enjoy 🙂
Hi Peter,
Great website with plenty of information about Bitcoin. I have heard of some cases where property developers have requested Bitcoin as payment for their properties. I think its decentralised properties make it very attractive to some.
I have subscribed to your blog. I can see that you are a prolific writer and hopefully I can pick up some titbits.
Hello, Robert Thanks for your comments. Your right it’s the decentralised nature of cryptocurrencies that make them appealing. I am pleased you found my post informative and am happy to have you as one of my subscribers. I hope you enjoy the eBook that is coming your way. 🙂
I used to buy and sell bitcoins in metatrader in the forex market, but I actually didn’t know what really a bitcoin is, and I found it pretty interesting. Lately I’ve been hearing a lot about mining bitcoins but I don’t get it at all, do you have an specific article for this subject? If not, are you planning to write one soon?
Thanks a lot.
Hello, Alex Thank you for your comments. I have two other articles for you What is a Cryptocurrency and How To Buy Bitcoin which will give you a ton of information. As a thank you leaving a comment. I am sending you a copy of my eBook Why Invest in Cryptocurrency? And how to get started. so watch out for it in your inbox. – Enjoy 🙂
I have always heard stores on things called ‘Bitcon’, ‘cryptocurrency’ and I had never understood the whole concept about it. I also have a friend who recently asked me to buy Bitcoin from him!! but still i could not understand what I was about to invest in!. It is until a have read your information that now I have got the knowledge.
Thanks for the putting up such an informative materials. You have indeed opened my eyes.
Thanks
Hello, Ssesangam. Thank you for your comments. I have two other articles for you What is a Cryptocurrency and How To Buy Bitcoin which will give you a ton of information. Also I am sending you a copy of my eBook Why Invest in Cryptocurrency? And how to get started. Which is on its way to you for leaving a comment. so watch ou for it in your inbox. – Enjoy 🙂
I am quite interested in BitCoin. Do you hear that China government announces to close all BitCoin platform last month? China used to major suppliers of BitCoin since they have most BitCoin mining in the world.
Many young people head for Vietnam because next year Vietnam will allow BitCoin as a transaction currency. Do you think we can get involved and make the profit from BitCoin?
Hello. George Thanks for your question, “Did you hear that China government announces to close all BitCoin platform last month? Yes, I did hear that (I’m in Shanghai) and it impacted the price of Bitcoin for a few days. It dropped from nearly $5000 to close to $4000. Then everyone realised that “hey the government can’t stop this” The price has since picked up and now is close to $6,800 as I write this. Your next question “Do you think we can get involved and make the profit from BitCoin? Absolutely! You can see my post How To Buy Bitcoin and also you will get more information from my eBook Why Invest in Cryptocurrency? And how to get started. Which is on its way to you for leaving a comment. Enjoy 🙂
I have come through this article is very informative, and it is a great introduction and explanation for the bitcoin.
This useful link is not only explaining idea or intro of the future money of bitcoin, but also have the article about how to buy bitcoin and all, which is really appreciate since which is easy to get an idea about the bitcoin for new users and your site visitors. Thanks for that
Hello, Sajeeth. Pleased you have enjoyed my post. There is an eBook on its way to you, so watch out for it in your inbox. Thank you for your comments. 🙂
i’ve heard stories about people making insane returns on their bitcoin investments and that naturally sparked a lot of curiosity in me but before reading this article I had no idea about how bitcoin worked, what it really was and why it is superior to regular currency.
now after reading the article i feel much more confident about these questions and many more. i actually had no idea about the problems with regular currency before reading this article so that was also very insightful.
one thing im still not quite sure on is what the relationship is between bitcoin and other cryptocurrencies. is it the same as the relationship between different regular currencies?
Hello, Jacob. Thanks for your question. …“what’s the relationship is between bitcoin and other cryptocurrencies, is it the same as the relationship between different regular currencies?”
Yes, in a way that is correct Bitcoin is a cryptocurrency and as a ‘currency’ Bitcoin is gainning more and more acceptance from everyday retailers and merchants. Last count more than 150,000. You can buy anything from cars to computers. Plus you can also buy other cryptocurrencies using Bitcoin that can be used to purchase specific items such as everyday purchases. That’s the power of Bitcoin in that it has the potential to operate entirely away from the mainstream ‘fake money’ system.
I hope you enjoy my Book ‘Why Invest in Cryptocurrency? and how to get started”. That’s is coming your way as my personal thank you for leaving a comment. 🙂
Great article with a lot of good information, I am new to the whole Bitcoin thing, but it looks intriguing. I assume that a lot of people make money by trading it against other currencies or do they just buy and hold as an investment? I also see the value of using Bitcoin to keep transactions much more private. My only question is it seems to me that you would not want to convert bitcoins back to USD for fear of triggering unwanted scrutiny from banks, governments etc.
Hello, Davd Yes, you are right about ‘unwanted scrutiny from banks, governments etc’ when cash suddenly appears in your account. But the thing is that you don’t have to convert it back into US dollars because Bitcoin is gainning more and more acceptance from everyday retailers and merchants. Plus you can also buy other cryptocurrencies that can be used to purchase specific things and everyday purchases. That’s the power of Bitcoin it has the potential to operate entirely out of the mainstream ‘fake money’ system.
Take a look at my Book ‘Why Invest in Cryptocurrency? and how to get started”. Thats is coming your way as amy personal thank you for leaving a comment. 🙂
Great article! I’ve recently been doing a lot of research into Bitcoin and I definitely believe that these digital currencies are going to be the future. I’d like to start trading Bitcoin but am not that comfortable with the exchanges. Do you have a trading platform to recommend that is easy to use and that can securely store my coins? Thanks!
Hello, Jasmine. Yes, actually I cover that in another post How To Buy Bitcoin which you can also view and I take you through the process of buying Bitcoin. Thank you for the comments and I sm sure you will also like my eBook about Crptocurrencies that is coming your way. 🙂
I’ve always been curious about how Bitcoins and blockchains work. What an interesting read! I do have a few questions: How is it that online currency can go unregulated and have it still be valuable? Without an intermediary, how does the value of Bitcoin stay consistent? Are there rules for using Bitcoins? Who determines these rules?
Hello, Burleyboy. Thank you for your questions and I answer them in the eBook that is coming your way so watch out for it in your inbox. A copy of my book ‘Why Invest in Cryptovcurrency and how to get started’ is my way of a personal thank you for leaving a comment and to provide you with additional information. 🙂