What is Bitcoin and how does Bitcoin work 2020?

INTRODUCTION: knowledge is having right information and good understanding of something or person which in turn enhance usage effectiveness & relationship.EG. right information about a drug determines it right application and effectiveness, right information about a person help in developing a good relationship which in turn produces love, peaceful co-existence,joy & progress which does together. in this Post, we shall try to look into few things which we need to know about bitcoin.

What is Bitcoin?

Bitcoin, often described as a cryptocurrency, a virtual currency or a digital currency – is a type of money that is completely virtual.

It’s like an online version of cash. You can use it to buy products and services, many shops and services accept Bitcoin as form of payment.

The physical Bitcoins you see in photos are a novelty. They would be worthless without the private key printed inside them.

How does Bitcoin work?

Bitcoin wallet

Each Bitcoin is basically a computer file which is stored in a ‘digital wallet’ app on a smartphone or computer.

People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people.

Every single transaction is recorded in a public list called the blockchain.

This makes it possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies or undo-ing transactions.

How do people get Bitcoins?

There are three main ways people get Bitcoins.

  • You can buy Bitcoins using ‘real’ money.
  • You can sell things and let people pay you with Bitcoins.
  • You can also get it by mining it.

How are new Bitcoins created?

In order for the Bitcoin system to work, people can make their computer process transactions for everybody.

The computers are made to work out incredibly difficult sums. Occasionally they are rewarded with a Bitcoin .

People set up powerful computers to get Bitcoins. This is called mining.

But the sums are becoming more and more difficult

If you started mining now it could be years before you got a single Bitcoin if you are mining with a computer.

You could end up spending more money on electricity for your computer than the Bitcoin would be worth without a mining machine.

Why are Bitcoins valuable?

There are lots of things other than money which we consider valuable like gold and diamonds. The Aztecs used cocoa beans as money!

Bitcoins are valuable because people are willing to exchange them for real goods and services, and even cash.Why do people want Bitcoins?

Some people like the fact that Bitcoin is not controlled by the government or banks.

People can also spend their Bitcoins fairly anonymously. Although all transactions are recorded, nobody would know which ‘account number’ was yours unless you told them.

conclusion

Every transaction is recorded publicly so it’s very difficult to copy Bitcoins, make fake ones or spend ones you don’t own.

It is possible to lose your Bitcoin wallet or delete your Bitcoins and lose them forever. There have also been thefts from websites that let you store your Bitcoins remotely.

The value of Bitcoins has gone up and down over the years since it was created in 2009 and best option is to HODL your bitcoin when the price is down .

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