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how does Bitcoin work?

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5 months ago

What is Bitcoin?

Bitcoin, often described as a cryptocurrency, a virtual currency or a digital currency - is a type of money that is completely virtual.

It's like an online version of cash. You can use it to buy products and services, but not many shops accept Bitcoin yet and some countries have banned it altogether.

The physical Bitcoins you see in photos are a novelty. They would be worthless without the private codes printed inside them.

Since 2009, the number of bitcoins mined has skyrocketed. That's the way the system was set up—easy to mine in the beginning, and harder as we approach that 21 millionth bitcoin. At the current rate of creation, the final bitcoin will be mined in the year 2140.

Want to learn how to purchase bitcoin or get bitcoins?

You’re in the right place!

The short answer is:

Find a Bitcoin exchange

Trade your local currency, like U.S. dollar or Euro, for bitcoins

Move your bitcoins into a secure Bitcoin wallet

For the long answer, read this Bitcoin buying guide and by the end you’ll understand these key points:

How and where to buy bitcoin

How to choose the right exchange

How to secure your coins after you buy

How to avoid

How can you pay for the bitcoins? Payment method may be the most important factor.

In fact:

We're sure you already have a payment method in mind that you'd prefer to use. More on that below.

KEY TAKEAWAYS

The value of Bitcoin is heavily dependent on the faith of investors, its integration into financial markets, public interest in using it, and its performance compared to other cryptocurrencies.

Bitcoin investing still involves some technical and security issues that investors should be aware of before they begin.

Investors who want to trade bitcoin need a place to store them—a digital wallet.

They also need to buy bitcoin, which is usually achieved by connecting a wallet to a bank account, credit card, or debit card.

it is secure?

Every transaction is recorded publicly so it's very difficult to copy Bitcoins, make fake ones or spend ones you don't own.

It is possible to lose your Bitcoin wallet or delete your Bitcoins and lose them forever. There have also been thefts from websites that let you store your Bitcoins remotely.

The value of Bitcoins has gone up and down over the years since it was created in 2009 and some people don't think it's safe to turn your 'real' money into Bitcoins.

are new Bitcoins created?

In order for the Bitcoin system to work, people can make their computer process transactions for everybody.

The computers are made to work out incredibly difficult sums. Occasionally they are rewarded with a Bitcoin for the owner to keep.

People set up powerful computers just to try and get Bitcoins. This is called mining.

But the sums are becoming more and more difficult to stop too many Bitcoins being generated.

If you started mining now it could be years before you got a single Bitcoin.

You could end up spending more money on electricity for your computer than the Bitcoin would be worth.

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Avatar for Hf-kishorpasha077
Written by   2
5 months ago
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