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    Beginners Guide To Understanding Bitcoin Cryptocurrency
    Beginners Guide To Understanding Bitcoin Cryptocurrency
    Beginners Guide To Understanding Bitcoin Cryptocurrency
    Ebook152 pages3 hours

    Beginners Guide To Understanding Bitcoin Cryptocurrency

    By Delmos Irving

    4.5/5

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    About this ebook

    Your Best Opportunity To Keep Up With The Future

    Cryptocurrency, blockchain, digital assets… Relatively new terms you seem to be hearing everywhere nowadays, yet your knowledge about them is shaky at best. That changes today! BEGINNERS GUIDE TO UNDERSTANDING BITCOIN AND CRYPTOCURRENCY is a comprehensive volume with a practical approach teaching you how to buy, sell, trade and use cryptocurrencies for payments. And after all, why shouldn't you have a fair share of the Bitcoin revolution?

     

    Here's What You Should Know

    Cryptocurrency is the newest worldwide means of financial exchange, seen as the greatest technological improvement to the world of finance. Using blockchain, a fully decentralized technology which records and manages transactions in a secure manner, cryptocurrencies represent the coins of the future, at the same time presenting a great opportunity for financial gain, despite its volatility.

     

    In this extensive volume, Delmos Irving explains in a simple and easy to understand way why cryptocurrencies are a good investment, giving essential tips & tricks on how to get results and steer clear of instability.

    In this book, you will learn everything there is to know about:

    Main advantages and disadvantages of Bitcoin;

    History of Bitcoin;

    Bitcoin mining and halving;

    Investments, transactions and risks.

    LanguageEnglish
    PublisherRichard Irving
    Release dateMay 7, 2021
    ISBN9798201173630
    Beginners Guide To Understanding Bitcoin Cryptocurrency

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    Book preview

    Beginners Guide To Understanding Bitcoin Cryptocurrency - Delmos Irving

    CHAPTER ONE

    WHAT IS BITCOIN?

    This is a virtual currency that follows the idea of the relatively unknown Satoshi Nakamoto. This cryptocurrency offers a new and relatively easier way of transactions, and the transaction fees here are lower compared to bank transactions. Bitcoin is operated by a decentralized network which makes it immune to governmental changes and laws that would affect the value of other currencies. It is not also owned or backed by the government, which means the government is not able to limit or increase its availability.

    This difference from other governmental issued currency means it is not tied to any country's rules and regulation, unlike fiat currencies. It is stored, distributed, traded on a decentralized system known as the blockchain. Bitcoin systems work with an aggregation of computers that refer to nodes or miners located in different areas and are responsible for collating data and maintaining transparency within the system. This makes it difficult for anyone, not even the government, to trick this network.

    Advantages of Bitcoin

    Bitcoins have grown in popularity due to the numerous advantages it has over other types of government-issued currencies. Some of the benefits are:

    User autonomy

    An advantage all cryptocurrencies, especially bitcoin, have over government-issued currency is the ability to exercise control over their money without dealing with any third party like banks and governments. This has drawn many towards the use of bitcoins; it is also one of the many reasons that hastened its acceptance into society. The immunity of this currency from governmental control, which impacted how money was spent and kept, is a major advantage.

    Discretion

    Bitcoin transactions can be carried out discreetly, i.e., the buyer and seller's information remains private unless they decide to publish the transaction. The subtle nature of bitcoin purchases makes it a better choice, unlike traditional payments where the names and essential information of an individual carrying out the transaction are available for each payment. This anonymity is enhanced by the decentralized system that bitcoin payments work with. This does not mean bitcoin transactions are untraceable, as all transactions have a public address that could be viewed by all.

    Focuses on peer to peer technology

    This type of technology ensures trades can occur between different people from opposite sides of the globe, and there is no need for approval from any special authority or third party. The transactions only occur between the buyer and the seller.

    No need for banking fees

    Bitcoin users are not subjected to the long list of the banking fees that banks charge for government-issued currencies. The fees include overdraft charges, deposit fees, accounts maintenance, etc. However, there are fees also associated with cryptocurrency exchanges, such as occasional deposits, withdrawal fees, etc.

    Low transaction fees for international payments

    There are standard fees that are charged for foreign purchases by banks, the government, and other intermediary institutions that are involved in wire transfers and foreign purchases. Bitcoin transactions, however, have no intermediary agencies, which reduces the price of long-distance transactions. The ease, speed at which bitcoins transactions occur also eliminate the wait periods that are always associated when using other conventional modes of payment. There is also no need for authorization from any entity or organization that could cause delays and inconveniences.

    Mobile payments

    Bitcoins can also be used to carry out transactions on any internet-connected device. Although this service is also offered by government-issued currencies using debit and credit cards, bitcoin transactions make this process better by allowing users to pay for goods and services anonymously. This makes bitcoins the best method of online payment as it protects your identity.

    Accessibility

    The availability of bitcoins to all parts of the world has been very helpful in areas where there is no access to banking or financial institutions. The use of bitcoin has been simplified to make it reliable, accessible, and easy to use. Users only need the internet to access their coins and perform transactions to use bitcoins. This function can be performed on any internet-connected device. 

    How Bitcoin Became Valuable

    A question that has been asked is how bitcoin became so valuable in relation to fiat currencies and other cryptocurrencies. The answer is very simple as there are similar ways that all currencies become valuable.

    Scarcity

    A major determinant of a currency’s value is its supply. The level of supply determines how the economy will look like; a large uncontrolled supply of a currency would result in reduced value and likely an economic collapse, while a low supply of the currency would result in economic problems. When bitcoin was launched in 2009, there was an estimated supply of tokens that would be available; the number was capped at 21 million. There was a halving process in the protocol that includes a reduction in the released supply of bitcoin every four years. The last halving occurred on May 11, 2020, at 3 pm with a reward of 6.25 BTC from the last one of 12.5 BTC. The reduced supply of bitcoin is using a synthetic form of inflation to increase its value. This year it was estimated that we have around 18 million BTC in circulation, and it estimated that the number increases slightly to a little above 19 in 2022.

    The halving process has proved successful so far, and this protocol is unlikely to change. All currencies apart from bitcoin have a way to control the supply of the currency; government-issued currencies are controlled by reducing and increasing the supply of the currency inflow based on the economic situation. Most governments continue printing money to control scarcity. The continued availability of bitcoin has proved effective in increasing the value of bitcoin, but what happens when the supply of bitcoin stops in 2140. What will happen is not known, but if I am to take a guess from the behavior of other currencies whose values have increased because of their reduced availability. I think the value will only likely increase as it becomes scarcer.

    Divisibility

    The total number of bitcoin that can be available has been set at 21 million bitcoins. This number is extremely small compared to other government-issued currencies in the world. Bitcoin, however, is divisible to 8 decimal points, and the lowest available unit of bitcoin, which is called a Satoshi, is 0.00000001. It was named after the pseudonymous developer of bitcoin. The presence of this unit means there is a possibility for quadrillions of such individual units to be distributed around the world.

    The divisibility of this currency makes it able to be used in any kind of transaction no matter what the price of bitcoin amounts to if the value continues increasing. The divisibility of a bitcoin has a larger degree than the divisibility of other government-issued currencies.

    Utility

    An advantage of bitcoin over other currencies is that it is based on a decentralized network known as The Blockchain. The system is a distributed ledger system that is very transparent and does not require parties to establish trust before the system can work. The system itself has been designed to maintain transparency by carrying out various checks and verifications that confirm all transactions. This system was designed to maintain the ledger and is responsible for the new mining of bitcoins. This technology is flexible, which does not limit the usefulness of bitcoin to only cryptocurrency transactions.

    Transportability

    It is very easy for cryptocurrency to be transferred between various exchange platforms and wallets regardless of the size that is to be transferred. These transactions are unlike transactions involving government-owned currencies. They are faster and have fewer charges; the ability for a currency to be transferred is essential to the success of such currency. Bitcoin transactions have proven to be a better and more effective way of carrying out transactions.

    Durability

    One major disadvantage of other currencies is that in their physical form, they can be destroyed, which is unlike bitcoin, which

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