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What is bitcoin?  – Things to know before dealing with Bitcoins

What is a bitcoin – here we are going to discuss about few things to know before dealing with Bitcoins.

WHAT IS A BITCOIN?

Bitcoin is a type of currency, which is totally virtual. It is also known as virtual currency, digital currency or crypto currency. It is like a version of money that it completely online. Although we can use it to get services and products, some countries have banned the use of bitcoins.

In October 2020, PayPal declared that they would accept their customers using bitcoins for buying and selling. Presently, physical bitcoins are available. But these are useless with out the printed private code inside them.

HOW DOES BITCOINS WORK?

Specifically, bitcoins are computer files stored in an app (digital wallet) on a computer or smartphone. You can send or receive bitcoins through your digital wallet. There is a public list (blockchain) with all the transactions of bitcoins. This ultimately helps in tracing the people who spends coin they do not own. Lots of things are there to understand before dealing with Bitcoins.

HOW TO GET BITCOINS?

In general, there are 3 major ways to get bitcoins.

  • We can buy it with real money.
  • We can sell products and ask people to pay with bitcoins.
  • Using a computer, we can create bitcoins.

HOW TO CREATE NEW BITCOINS?

There is a process, mining, where people build special powerful computers just to create new bitcoins. These computers can compute difficult sums. But the sums are getting more complicated. Accordingly, it might take years before you get a single coin. As a result, you would spend more money on powering your computer than the worth of bitcoin.

IS IT VALUABLE?

What is a bitcoin? – things to remember before buying Bitcoins.

In this case, bitcoins are valuable because the people think it as valuable. When people trade something for real products and services or even real money, then it is valuable in the market. Not surprisingly, people use bitcoins as a valuable something in place of real money.

WHY DO PEOPLE NEED BITCOINS?

Bitcoins are not managed by banks or governments. For this reason, some people like to use it for anonymous transactions. Even though there are records of this transactions, no one will know your account number until you tell them.

In January 2021, Elon Musk, the world’s richest man declared his support to bitcoins on an online social media chat. He even changed his Twitter bio to ‘#bitcoin’. Recently, he has displayed his support on digital currencies, which led to the increased value for bitcoins.

ARE BITCOINS SECURE?

Since every transactions are recorded, it is nearly impossible to create fake coins or spend coins that you don’t own. If you lose your digital wallet or delete your bitcoins, you will lose them forever. The most common query, people used to ask now a days is what’s this bitcoin and how to deal with it.

Since its creation in 2009, the value of bitcoins have gone up and down over the years. Some people think that it is unsafe to change real cash into bitcoins. The value of bitcoins could drop remarkably at any moment. As a result, investors could lose a good amount of money.

5 Basic Fundamental Analysis on bitcoins are as below.

Bitcoins Whales Transaction Activity
Unconfirmed transactions
Hash rate
Bitcoin Halving
USDT Premium

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