What is Bitcoin?

Bitcoin has raised in Value so much in the last 10 Years. What is all this Hype about? According to Wikipedia we find this Definition:

Bitcoin () is a cryptocurrency invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its implementation was released as open-source software.

It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.

This means anybody with a Computer and a Internet Connection can be part of the Network. This enables great Chances in otherways very regulated and centralised System like Fiat Currency. It is also is much more easy to store and use as Gold and has many other benefits. For Instance it is tamper resistance trough integration of Cryptography: When you Dowload a Bitcoin Wallet and create a Adress on the Network there will be 2 important Parts of your Adress.

The Private and the Public Key wich are integrated in a very sophisticated and clever way with the Software on the Bitcoin Network. There are many Keys involved in a Bitcoin Adress or Wallet, to keep it simple for now imagine the Public Key like your Banknumber and the Private Key like your Banklogin credentials. Anybody can know your Public Key (Banknumber), worst they could do is send you Money! The Private Key (Password) should never be revealed to anybody. Who has possession of the Private Key can Unlock the Wallet and send Funds out of the Wallet. Other then centralised Systems like Banks the decentralised Nature of Bitcoin makes it impossible for anyone to freeze or remove funds as long as you hold your Private Keys!

It is mathematically impossible that there will be more the 21 Billion Bitcoins in circulation, unless the Code of Bitcoin is changed and the largest part of the Miners accepting this new Chain which gives it anti-inflationary capabilitys. To obtain Bitcoin you can participate in the mining process that secures the Network, and verifys the transactions.

They are stored in Blocks, hence the Name Blockchain. This needs massive computational Power and produces  Blocks in which the Transactions are store which then are Broadcasted to all other Network User. Miners get rewarded to secure the Network with their Hardware and Energy. To make this profitable you need to invest a lot of Money on Hardware and Energy as well as Time for maintenance. This could be a decent income if you have access to renewable Energy or large unused quantity of computational Ressources. See this Picture from Blockgeeks for a better understanding.

The easy way to get exposure to Bitcoin is to register on a Centralised Exchange (We will Cover Decentralised Exchanges in later Articles). On Websites like Binance, FTX or Coinbase you can buy Cryptocurrencies with Creditcard or your Bank account. Experienced Traders most likely wanna choose Binance and FTX over Coinbase since it has more Features, but Coinbase is a good Exchange for Beginners since they keep it simple. Keep in mind that your wallet is in custody of the supplier of the Service, that means that you are not in charge of your private Keys. You can just transfer them to your personal Wallet where only you are in charge of the Private Keys after that. Note that Bitcoin is pseudonymous not anonymous.

There is a lot you can do with your Bitcoin now. You can trade it for other Assets, be it other Cryptocurrencies or Assets from the real World. You can transfer Value around the globe with very low transaction costs to anybody with a Computer and a Internet Connection. Later we will show you how you can earn passive Income from your Bitcoin and leverage it to give you even more exciting possibilities with this new Technology!

For now i encourage you to get involved, try out some apps, look at the settings and get comfortable. This is not considered financial advise, we try to help curios Users to avoid make mistakes. If you are still interested dont rush to the Next exchange and buy Bitcoin, there is more to the Blockchain Ecosystem. Although Bitcoin is the largest Cryptocurrency in part of Market Cap right now, but this could change and there is lots of interesting other Technologies available. Read our Article about Ethereum next to get a better understanding off this new and heavily growing Industry.

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