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What Is Bitcoin?

What Is Bitcoin?

What is Bitcoin?

You have probably heard about Bitcoin, the most popular form of digital currency in the world. Without any control like the monetary currencies, Bitcoin is entirely digital which means that it is produced by people and computers from all around the world – using software that solves mathematical problems.

Bitcoin is also the first term that was related to a growing category of money known as crypto currencies. Since it can be used to buy things electronically, it certainly fits the image of a cryptocurrency. However, bitcoin is decentralized – which means that there is no single institution that controls the network or the virtual money it is based on.


 

Who Created Bitcoin And Who Is Producing It?

Bitcoin was created by a software developed named Satoshi Nakamoto – a guy who proposed it as the first electronic system based on mathematical proof that would eventually become a currency which is decentralized – meaning that there is no authority in charge of it.

Nakamoto designed the creation of bitcoin in a digital way, by forming a community of people that anyone can join and use their computer power in a distributed network. While the network will process transactions made by the virtual currency, it will also make bitcoin its primary networks.

Still, there cannot be unlimited bitcoin churned out in public. That is because of the protocol which says that only 21 million bitcoins can ever be created by miners. However, there is a catch – as these coins can be divided into smaller parts (with the smallest being one hundred millionth of a bitcoin and named ‘satoshi’ after the founder).

What Is Bitcoin Based On And What Are Its Main Characteristics?

While conventional currencies are based on gold or silver, bitcoin is based on something else – the law of mathematics. In other words, bitcoin is part of a mathematic formula that is used in a software program and is also freely available so that anyone can check it. This is why Bitcoin is labeled as open-source, meaning that anyone can look it and make sure of its existence.

Some of the main characteristics of Bitcoin present it as a digital currency that is:

Fully decentralized – Meaning that it isn’t controlled by one central authority

  • Easy to set up – Unlike conventional banks, a Bitcoin address can be set up in seconds with no questions asked and no fees to pay
  • Anonymous – Users are able to hold multiple bitcoin addresses which aren’t linked to names or any personality identifying information
  • Transparent – The network stores detail of every single transaction that has ever happened in history
  • Lacks Transaction fees – Unlike banks and conventional currencies, sending or receiving bitcoin costs nothing
  • Fast and non-refundable – You can send money in seconds in the form of a bitcoin – but without a possibility for a refund or to get them back (unless the recipient returns them)

The process of developing Bitcoin is also known as ‘mining’, relating to the use of software programs in order to produce this digital currency. Below, we are explaining it in detail.

 

Mining Bitcoin – What Is It?

As soon as the network was launched by Satoshi himself in 2009, it made any computer connected to it possible to mine bitcoins. Since there were only a few people mining bitcoin at the start, the protocol supported this process and made sure that everyone connected to the network is helping to produce it.

Unlike governments and paper money, bitcoin operates as a peer-to-peer network, which means that no one decides how much of it will be produced and how it will be distributed. The miners are the ones who run the software on their machines and issue a certain amount of bitcoin in return. This provides a smart way to issue the currency while creating an incentive for more people to join it.

As we said earlier, ‘mining’ bitcoin refers to solving specific math problems using a special software. As more people participate in mining – the more secure the bitcoin network becomes. As soon as one math problem is solved, a node finds the solution, announces it to the other nodes in the network and claims a new batch of Bitcoins to be solved in order for new bitcoins to be produced.

How To Buy And Sell Bitcoin?

The first thing you need to do in order to purchase Bitcoins is to get yourself a bitcoin wallet. This is essentially ‘the place’ where you store your new bitcoins – and something like a bank account for them. Now, there are different wallets with different prices and levels of security. The main options include:

  • a software wallet stored on your computer’s hard drive
  • a web-based wallet
  • a ‘vault’ service that keeps your bitcoins protected online (the most common choice)

Even though most of these have their vulnerabilities, the last seems like the most popular solution when buying and storing your bitcoin. As for buying Bitcoin, some of the best and most popular wallets offering a simple way to buy Bitcoin include the following websites:

  • Coinbase
  • Local Bitcois
  • BitQuick
  • BitBargain
  • CoinCorner
  • Bittylicious

When it comes to selling, the best way to sell Bitcoin is also on some of these networks (Coinbase, BitBargain, Bittylicious etc.). There are three main ways to sell Bitcoin – through direct trades, peer-to-peer trading marketplaces or exchange trades. However, you should always make sure that you are registered as a seller and follow the standard procedures whether you are buying or selling Bitcoin.

The Growth Of Bitcoin

In the end, many people decide to buy Bitcoin just because of its growth and popularity over the years. The truth is, Bitcoin’s price keeps breaking records and could rise up to $100,000 in 10 years according to many analysts and experts.



 

 

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Subdermal Bitcoin Wallets: Feeling Crypto “Under The Skin”

In an era where digital wallets are increasingly vulnerable and prone to hacks, everyone wants to protect their cryptocurrency portfolios. The Dutchman Martijn Wismeijer is one of them, after deciding to implant subdermal Bitcoin wallets in his skin. In 2014, Wismeijer had two NFC (near field communication) chips surgically implanted into each hand – all in order to store his encrypted Bitcoin keys on them.

As Wismeijer says, there are many reasons why this is a smart move. However, he learned this hard, after losing the majority of his Bitcoin due to exchange failure, hacking, and theft. He believes that the microchip crypto wallets could prevent this from happening.

In his own words, Wismeijer claims:

“I can safely say most of the bitcoin, more than 80 percent, I have lost due to hacks, thefts, exchanges gone bad and other problems. If I would’ve had the chip in 2010, I’d probably be a rich man by now.”

The idea of storing a cryptocurrency in one’s skin was always interesting for Wismeijer. As he said in an interview with IBTimes, he did it because he wanted to experiment with strong Bitcoins using chips because he thought that this could be the Holy Grail of contactless payments.

Wismeijer had the surgical procedure done at a body piercing studio. The chips that are under his skin are 2mmx12mm each which equals the size of a small grain of rice. In what he describes as a less painful process than a IV drip injection, Wismeijer also pointed that each of these chips has 888 bytes of data which is enough for 26 Bitcoin address keys.

The real question at this point is…

Does the future or cryptocurrency wallets look like this? Is Wismeijer one of the pioneers of a whole new type of technology – making our bodies connected on a whole new level?

After being featured in the news, Wismeijer also said that he knows “at least 50” individuals in Prague, the Czech Republic using subdermal Bitcoin wallets. This may be the answer we all need.

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Buying Coins: Pick the Right Exchange

There are numerously available exchanges that you can buy blockchain currencies from and be finding the right exchange can be tough. There’s a number of factors that you have to be considered in ensuring that you’ve opened the right exchange. The majority of exchanges offers only the top coins, which usually consists of Bitcoin, Ethereum, Litecoin and BTC cash. Following points, if considered could help the new investors in picking the right exchange.

      1. Liquidity: The most important criteria in picking up the exchange. Liquidity refers to the ease of buying/selling in the market. A high liquidity means that there is a good number of buyers/sellers. High liquidity is good as it leads to better price discovery and it allows you to transact faster.
      2. Security: The security mechanism used by the exchange is very crucial ensuring the asset you purchased is safe. The security system should be beyond the reach of hackers, 2-factor authentication and email verifications are one of the few examples of critical factors that one should consider
      3. Trading Fees: Lower the transaction fees the better it is especially if you’re a constant trader. It is important to look at the fees of the exchange you choose, to see if it’s comparable to other exchanges.
      4. Ease of Use: The user interface of the exchange should be easy to use and clean to avoid misunderstanding and errors. Having the necessary indicators at the tip of your fingers and the ease of steering through the platform should make it easy for anyone to use the interface.
      5. Good Customer Support: Having a good customer support would save a lot of time and also chances of errors. Issues on your confirmation procedure, deposit/withdrawals, funds position and trading orders should be solved quickly by the exchanges, or it could cost compromise you time, money and well-being.
      6. Coin Pairs: There are only a handful of exchanges that offer a wider variety of coins. A more varied choice of coins accessible is better as it gives you more options of coins to purchase
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EDUCATION & RESOURCES

What Is Cryptocurrency?

What Is Cryptocurrency?

What is Cryptocurrency?

A lot of people know it as ‘the money of the future’ and many also refer to it as the best thing that happened online. Cryptocurrency is actually a form of digital money – and a global phenomenon known to most people. Even though at this point they still remain as somehow unexplained, crypto currencies are changing the world step by step.

The change can be best seen through Bitcoin, the most popular cryptocurrency out there and an official payment method in many places. The truth is, in today’s era you will hardly find a major bank or financial institution that doesn’t rely on cryptocurrencies one way or another.

However, crypto currencies are most traded by individuals – even bankers, scientists and developers who have at least some knowledge about them. Obviously, the greater mass falls to understand the basic concepts of these crypto currencies. That is why today, we are walking you through the complete story about the model of the first digital currency. So…

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What Is Cryptocurrency And How Crypto Currencies Got So Popular Over The Years?

Even though only a few people know about them, crypto currencies have emerged as a side product of Bitcoin. As soon as Bitcoin was introduced to the masses, it saw tremendous growth. However, Bitcoin was not intended as a digital currency at all.

Instead, the founder of Bitcoin, Satoshi Nakamoto, spontaneously found that the system he is building can be decentralized – and that cash could flow without a single authority. Even though there were many attempts to create virtual money in this period, a lot of them failed.

After seeing that a decentralized digital currency can be easily built online, Satoshi gave the birth of crypto currencies. Even though they are entirely technical and hard to understand, the best way to simplify their meaning is as ‘a form of digital money that is unauthorized and anonymous’.

This set the backbone to decentralized networks, where servers were not needed. Instead, what was needed by peers who are continuously solving mathematical questions in the form of limited entries in a database that no one can change without fulfilling specific conditions.

This is how the first coins were created – and how the first cryptocurrency named Bitcoin emerged. Consisting of a network of peers, each one of the peers on Bitcoin has a complete history of all transactions and thus the balance of every account.

For example, ‘if Adam gives X Bitcoin to Eve’ – this is recorded as a transaction and is signed by Adam’s private key. As such, the storage of transactions is unlimited in crypto currencies and impossible to lose.

Mining Crypto Currencies: What Is It And Who Does It?

Every cryptocurrency runs on a blockchain, which is a shared ledger or document designed to be duplicated several times across a network of computers. Here, the updated document is distributed continuously and made available to all holders of the cryptocurrency itself.

Knowing that every single transaction made is recorder in the blockchain, the blockchain is run by miners who use powerful computers that record the transactions. Basically, their role is to update each time a transaction is made and ensure the authenticity of the information, thereby labeling it as secure and processing it safely.

As a payment for their services, miners are paid in physically minted cryptocurrency as fees by different merchants and vendors of each transaction. The value of a cryptocurrency bases on demand and supply and there is never a fixed value for each of them. Basically, buyers and sellers agree on a specific value and based on it are doing the trading elsewhere.

Mining is a process that includes two main functions:

  • adding transactions to the blockchain (securing and verifying them) and
  • releasing new currency

The process demands a computer and a special program which helps miners complete with their peers and solve the complicated math problems. This process also needs huge computer resources which power the software to solve a block using cryptographic hash functions. Here, the hash value is a numeric value or fixed length that can identify data and reward the first one who mined the block with a certain cryptocurrency value.

Why Are Cryptocurrencies Great?

Whether you already invested in crypto currencies or are planning to do it, you should know that each cryptocurrency is great because it is:

  • Irreversible – Meaning that a transaction cannot be reversed by anybody
  • Pseudonymous – There is complete anonymity and neither transactions nor accounts are connected to real-world identities
  • Fast and global – The transactions are made in lighting speed and confirmed in a couple of minutes
  • Secure – The cryptocurrency funds are generally secure, locked in a public cryptography system where only the owner of the private key can send cryptocurrency
  • Permissionless – You don’t have to ask anybody to send or receive cryptocurrency, coming from the decentralized network

However, there is a controlled supply of tokens when it comes to crypto currencies – which means that the monetary supply of a cryptocurrency in every moment can be roughly calculated at any time and there are no surprises.

 Understanding The Revolutionary Impact Of Crypto Currencies

In order to understand the impact of crypto currencies nowadays, you need to consider everything about them. If we take Bitcoin for example, it is safe to say that it is a permissionless, irreversible and anonymous network where payments cannot be tracked or controlled by banks and governments.

That being said, it is clear to see why crypto currencies attack the scope of the monetary policy – and why they are attractive to many people. According to many, they are forming the dawn of a new economy and are already acting as a fast and comfortable means of payment to many people and businesses.

Interested in learning more about cryptocurrencies? Read our blog for the latest crypto news!



 

 

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What Is Etherum?

What Is Ethereum ?

What is Ethereum?

Ethereum, also known as ‘Ether’ is a digital currency that is very similar to most cryptocurrencies. It is completely decentralized and open, which means that it is managed by its users – just like Bitcoin. However, the main use of Ethereum is to operate smart contracts within the network.

Basically, Ethereum has been a cryptocurrency deployed in different phases. Currently, the digital currency is in the 2nd phase called ‘Homestead’. These four planned phases are mapping the growth of the Ethereum network and are: Frontier, Homestead, Metropolis and Serenity. Even though Ethereum is still an experimental technology for operating smart contracts, its stability on the coin market has shown that it is one of the safest cryptocurrencies regarding ups and downs in its price.

Is Ethereum Very Similar To Bitcoin?

In a short answer – yes.

However, the only similarities are that these networks are both distributed and public, operating on blockchain. And even though there are some significant technical differences between them, the most important difference is that Bitcoin and Ethereum differ in their purpose and capability. While Bitcoin offers one particular app of blockchain technology that enables online payments – the Ethereum blockchain is used to track ownership of any digital currency (even bitcoins).

So, the Ethereum blockchain is not focused on mining for bitcoin. Instead, the miners work to earn Ether, which is a type of crypto token that fuels the network. Aside from that, many app developers use Ether to pay for their transaction fees and services within the Ethereum network.

The Ethereum Virtual Machine (EVM)

Before Ethereum was created, the blockchain applications were designed to operate a very limited set of operations. In short, cryptocurrencies like the Bitcoin were developed to operate as peer-to-peer currencies. However, there was a problem with this.

What Ether did was expand the set of functions offered by Bitcoin and other types of applications. The digital currency made the complicated and time-consuming processes easier and developed an entirely new platform for that.

This is how the core innovation of Ethereum came to light – the Ethereum Virtual Machine (EVM) as a Turing complete software that runs on the Ethereum network. Basically, this machine enables anyone to run software programs and create blockchain applications much easier and efficient than ever before.

What Are The Benefits & Where Can Ethereum Be Used?

Since Ethereum enables developers to build and deploy decentralized applications, it can be used on any blockchain network without being controlled by any individual or central entity. Simply put, the Ethereum makes the process of creating blockchain applications much easier and time-efficient than ever before.

So, any services that are centralized can also be decentralized using Ethereum. From transactions to loans provided by banks up to registries, voting system and regulatory compliance – Ethereum can make every process swift.

On top of that, Ethereum can also be used to build Decentralized Autonomous Organizations (DAO) with no single leader. Run by programming code in a collection of smart contracts, DAO is meant to replace the rules and structure of a traditional organization and eliminate the need for people and centralized control.

So, the benefits of Ethereum by now include:

    • Immutability – Meaning that a third party cannot make any changes to the data
    • No corruption or tampering – Every app within the Ethereum network is based on the principle of consensus, making any type of censorship impossible
    • Security – There is no central point of failure and the network is secured using cryptography and protected against any hacking attacks
    • Zero downtime – The apps can never go down or be switched off

Why Is Ethereum Changing Value – And Will It Scale?

If you are wondering why a technology like the Ethereum is changing its value on the crypto market, it is because of a simple reason.

Ethereum is traded for bitcoin, dollars, euros and many other currencies 24/7. This means that depending on the demand, its price can rise or drop any time of the day. Similar to stocks and properties, Ethereum is a digital currency that can be volatile compared to currencies such as the US dollar only because it is still an emerging technology with a small pool of liquidity.

Regarding scaling, no one knows if the price of Ethereum will significantly increase. That is only because Ethereum and bitcoin use a combination of technical tricks and incentives in order to record who owns what without any authority whatsoever.

In a situation like this, it is very tricky to preserve the balance while growing the number of users to the point where the price can significantly rise. That is only because Ethereum depends on a network of ‘nodes’ (just like Bitcoin) which store every transaction and record the current state of account balances, contracts and storage.

This is why many people decide to mine Ethereum and make the most of this digital currency.

How Ethereum Mining Works & How To Mine Ethereum?

As we said earlier, mining is what makes the decentralized app store possible – and what allows Ethereum to be sold and traded on the market. In a very similar process to Bitcoin mining, miners set computers loose in order to solve cryptographic puzzles and win ether. One of the most interesting things about this is that anyone can mine Ethereum and set their computer to focus on these cryptographic puzzles.

In order to mine Ethereum, you will need special computer hardware and a CPU or GPU as the two most common types of mining hardware. There are some mining profitability calculators you can use to see how much ether you can potentially earn at a given hash rate. As soon as you get your system up and running, you can install the software known as ‘geth’ and join the mining pools.

So, Will Ethereum Rise In The Future?

No one knows the answer on this question. However, according to some benchmarks and analytics, the development roadmap of Ethereum looks promising – and quite experimental. It is true that Ethereum is a precious technology that solves problems and as such contains value which would undoubtedly increase over time.



 

 

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