Beginners Guide To Bitcoin | South Africa Today

You might have heard the word ‘Bitcoins’ quite a few times these days however you might be wondering what Bitcoin actually is. From north to south and from newspapers to the internet Bitcoin has occupied it all. Ever since the cryptocurrency was launched it has become the favourite of traders. If you are still puzzled and thinking about what the term cryptocurrency and Bitcoin means, then this guide is just what you need.

What is cryptocurrency?

Before we directly jump on the specifics of Bitcoin it is better to discuss what is cryptocurrency. A cryptocurrency is a form of digital money that is available electronically. There are many different types of cryptocurrencies available in the market. And one of these is bitcoin.

What is Bitcoin?

Bitcoin is one of the most popular cryptocurrencies. It is a form of digital money but which the users can perform transactions. One can also purchase the products and services with Bitcoins. Bitcoin was originally launched and introduced by Satoshi Nakamoto. The engineer has formed it via a complex algorithm that generates Bitcoin.

As the currency is electronically available you do not have to deal with any hard coins or bills. There is one more thing making Bitcoin superior to regular cash and that is its decentralised authentication. Bitcoin is neither operated by a bank nor by any other central administration. This means you can’t even store Bitcoins in your bank account.

How To Store Bitcoins?

If not bank accounts then how can you store this digital money? With the help of wallets. Bitcoins can easily be stored in wallets. There are three types of wallets available in the field. You can choose the one you find most convenient to use. Other than storing Bitcoins, wallets can also perform their transactions. Most wallets require an internet connection to enact. You can pay for the Services and product from your wallet if the other party is ready to get it all with the same currency.

The wallet also assigns the enrolled users with a private key. To preserve the identity of the user performing the transaction, the Bitcoin wallet generates this key. It is in the form of a code, which your partner can see every time you will trade. This key is generated from a complex method and hence it is highly secure.

Wallets are further divided into three categories:

Software Wallets:

Software wallets are available in the form of software. One can download these applications for their smartphone, PCs and laptops. For smartphones, the software is available in both Android and iOS forms. Software is divided into two categories and that is an online wallet and offline wallets. Online wallets are the one that requires an internet connection for transactions. On the other hand, offline wallets are the one that does not require internet connectivity to accomplish the Bitcoin transactions. As the online wallets require internet connectivity to operate it is a bit less secure than the offline ones. Wherein the usability of the online wallets are higher than that of the offline ones.

Hardware Wallets:

As the name suggests, a hardware wallet is available in the form of a hardware device. It is a small device using which you can conduct transactions of cryptocurrency. So to perform the transaction you have to connect these hardware devices with the internet. Though the device is in the form of hardware it becomes less portable, the device requires internet connectivity only during the transaction making it prone to hackers.

Paper Wallets:

Paper wallets are the ones available in the document format. Here you can get your Bitcoins registered on papers and use the same while executing the transaction. The best part about this type of wallet is you do not have to worry about any type of hacking as this wallet doesn’t require any internet connectivity. However, we cannot deny the fact that these categories of wallets are easier to lose. It is also tough to carry these wallets along with you all the time and this also reduces the usability of the wallet.

One should not forget the fact that once they will lose their Bitcoin it becomes almost impossible to recover it. Hence it is very important to maintain and operate your wallet cautiously. Always try to go with a secure and legal wallet.

Where To Purchase Bitcoins?

Now that you know how you can store your Bitcoins, but to do the same you first have to get it. To asset Bitcoins, you can consider Bitcoin exchange. There are thousands of exchanges across the globe. You can go with a valid one to get your hard money exchanged with Bitcoins. Once you have got enrolled, the exchange will directly transfer the money to your wallet. Make sure that both your wallet and exchange are compatible with each other so that the transaction can be performed effortlessly.

How To Get New Bitcoins?

The exchange will only provide you with Bitcoins in circulation. To bring new Bitcoins in circulation one has to mine them. The process involves mining Bitcoins by cracking complex puzzles. Those who perform this task of mining Bitcoins are called miners. These miners can be anyone from a technically sound trader to a professional miner. Miners have to mine 1 MB of Bitcoin to get the rewards from the one who has hired them. These awards are usually in the form of Bitcoin tokens.

What is Bitcoin Trading?

The process of strategically investing in the Bitcoin Market is called Bitcoin trading. The process involves speculating the moves of the bitcoin stocks. While trading your profit doesn’t depend on the value of Bitcoin but on the strategy you have used to apply the commerce. It is also advisable that you should go with legal and advanced software. If you are interested in owning the prophet you can download Bitcoin Prime, one of the best trading software. The software is loaded with all the necessary features and guarantees high performance.

Final Thoughts:

Do not forget that whether it is bitcoin trading or a traditional one it is always subject to risk. Make sure you do the studies and you should know how to judge the markets and before you give a start to this.

Risk Warning:

Investing is not suitable for everyone; please ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Please conduct your own due diligence.

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