What Is Bitcoin?

Bitcoin is a form of digital currency, otherwise know as cryptocurrency, that is created and electronically stored in a secure Bitcoin Wallet. Bitcoin is the first and original cryptocurrency from a growing number of different cryptocurrencies emerging on the market place. The digital currency is “decentralized” which means it’s not controlled by any authorities like the traditional banking system we are used to with our FIAT currency (Dollars, Pounds, Euros etc.)

Bitcoins aren’t made and produced into physical coins, they’re instead “mined” by people and businesses running computers all around the world making up what’s known as the bitcoin blockchain. The blockchain network is made up from ‘bitcoin miners’ running bitcoin software on their computures and hardware. The miners help to process all bitcoin transactions that take place between individuals worldwide which makes bitcoin its very own secure payment network.

Who Created Bitcoin And What Is It For?

A software developer who goes by the name Satoshi Nakamoto is said to be the brains behind Bitcoin. There is much speculation about the true identity of the mysterious Nakamoto who currently holds roughly one million Bitcoins, an estimated value of approximately $3 billion USD as of August 2017. His idea was to produce a Peer-to-Peer Electronic Cash System completely independent of any central authorities which had very low transaction fees.

Who Controls Bitcoin

Nobody owns or controls the Bitcoin blockchain technology or network. It’s a bit like email and the internet, nobody owns the core email technology, only the software that uses it.

Why Does Bitcoin Take So Long To Buy?

Typically Bitcoin transactions take anywhere between 10 minutes and an 1 hour to confirm. In comparison, bank transfers can take up to 4 days to complete. Most merchants will wait for your bank wire transfer to complete before releasing you the Bitcoins. There are some faster Bitcoin buying services like changelly.com you can use.

Do I Have To Buy A Whole Bitcoin?

The price of 1x Bitcoin as of August 2017 stands around $3,000. Each coin is divisible to 8th decimal places which technically means each crypto coin can be split into 100,000,000 pieces. Each unit of a single Bitcoin (0.00000001 Bitcoins) is called a Satoshi. In the past it has been difficult to buy Bitcoin with a credit card, however, more and more exchanges are popping up allowing you to purchase $50 worth of Bitcoin instantly.

Is Bitcoin Legal

Yes, Bitcoin is legal in most countries apart from a few exceptions like India. Be sure to check the legal status of Bitcoin in your country before purchasing any coins.

Bitcoin Features

Secure – Bitcoin funds and currency are locked in a public key cryptography system. Owners hold private keys and are the only people who can send cryptocurrency. It’s said that a Bitcoin address is probably the most secure place in the world.

Worldwide And Fast – All transactions are instantly launched into the blockchain network and confirmed in a few minutes. Whether you are sending to a far off country or one of your friends in the same town, the speed and processing time is generally the same.

Irreversible – Once confirmed by the network a transaction can’t be reversed by anybody. There is no safety net if you were to send your funds to a scammer or your computer was hacked etc.

Anonymous – Although the identity of the user behind a Bitcoin address is unknown, further information can be revealed during a purchase depending on the types of service you use. For this reason it’s recommended you only use a Bitcoin addresses once. Most wallet services will generate new random addresses for you per transaction.

Bitcoin Payment Methods

Until recently many exchanges would only allow you transfer funds using a bank wire transfer. This usually takes 3-4 days to go through and will cost a processing fee with your bank and possible the exchange too. Be sure to check how you can deposit and withdraw your money before choosing a Bitcoin exchange. Paying with debit cards and credit cards is a bit easier than before and lots of exchanges are adapting to allow for faster payments. Both Coinmama and Coinbase are two coin buying services that allow for card deposits with fees around 3-6%. You might find you’re limited to the amount you can deposit at first but after you’ve completed a few transactions these limits are often raised. Check all the terms and conditions along with all the fees before committing to an exchange to buy Bitcoins.

Bitcoin Buying Limits

If you’re looking to purchase large quantities of Bitcoin then you’ll likely hit a stumbling block some exchanges. Many exchanges will only allow you purchase a certain amount of coin per month. if you’re looking to buy purchase 20 Bitcoins or more then exchanges like Coinmama and Coinbase are two of the best places to try.

Bitcoin Scams

Don’t be a victim of a Bitcoin scam. Like with most things to do with value, you’ll likely come across scammers who will try and take advantage of you and steal. Bitcoin scams are like all other scams however people who are less technical are very vulnerable and targeted. Follow these basics in order to protect yourself from Bitcoin scams:

  • Research your Bitcoin exchange and check to see if it’s trustworthy. Search Google and find users who have written about their dealings with company and so on.
  • If using a Peer-To-Peer exchange like LocalBitcoins then be sure to check each individual buyer and seller rating you do business with.
  • Use an escrow service. If someone asks you to send them the Bitcoins before they send you the money then it’s a sign of a scammer. Remember that Bitcoin transactions are irreversible and you stand no chance of getting your Bitcoins back or finding out the identity of the scammer behind the Bitcoin address.

Bitcoin Fees – Make Sure You’re Getting A Good Deal

Because Bitcoin is decentralized you’ll find that there is no set “going rate” to fees and charges you may occur with certain exchanges. You will likely pay a deposit and withdrawal fee per transaction between 3-8% sometimes more sometimes less. It’s always a good idea to search the exchange FAQs and fee rates before making any purchase. You can also expect to pay a ‘trade fee’ although these are often much lower depending on the type of exchange you choose. Some exchanges focus on high volume trading where you might make 10 trades or more in one day. These trade fees are typically around 0.2% but again make sure you check all the fees on the exchange’s website before committing yourself to any trades or depositing money etc.

What Is The Difference Between Bitcoin And Bitcoin Cash?

Bitcoin is the first and original cryptocurrency. As of August 2017 the Bitcoin network split into two (known as a fork) after developers proposed increasing the processing speed of the original network. This created an alternative Bitcoin currency called Bitcoin Cash. Currently Bitcoin Cash is worth less than Bitcoin and not widely supported, it remains to see how this new coin will do on the market compared to the original Bitcoin. Many experts predict that it might never reach the heights as Bitcoin is currently enjoying right now, but the cryptocurrency market is highly volatile and difficult to predict, anything can happen.

What Are Altcoins?

Altcoins is short for alternate coins that are another form of cryptocurrency completely separate from Bitcoin and Bitcoin Cash. There are many different altcoins on the market including Litecoin (A rival to Bitcoin) and Ethereum to name a few. Most altcoins can be traded on the cryptocurrency market for each other and FIAT currencies.

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