There are so many articles, tutorials, news about Bitcoin, and Altcoin that you don’t know where to start? Let’s start with “How to get started, trade and invest in Bitcoin for a beginner?”. Let’s begin the journey to discover Bitcoin and the cryptocurrency world from the essential things today!
What is Bitcoin for a beginner?
Bitcoin is the first cryptocurrency to enter the cryptocurrency market. Although it is called “money,” Bitcoin does not exist in the form of banknotes like Dollar or Euro that it displays on computer systems present around the world, using software that can handle algorithms.
Bitcoin uses a peer-to-peer protocol for all transactions. Synonymous, the transaction will be made directly from the sender to the recipient without going through any intermediary organization or individual.
Once you have learned about Bitcoin, having a basic knowledge of what Bitcoin is, you will realize that this cryptocurrency is different from ordinary currencies. Bitcoin can be used for payment on the internet. In this way, Bitcoin is somewhat like Dollar, Euro, and Japanese Yen when traded digitally.
However, the most striking feature of Bitcoin is its decentralization. No organization or government is in control of the Bitcoin network. This makes it easy for everyone because no central bank will be able to control their money. That means your property will not need to be deposited with others.
You fully hold your property. Your account also cannot be frozen like other bank deposits.
You can see live BTC price here.
Who created Bitcoin?
In 2009, the developer (or a group of programmers) under the alias Satoshi Nakamoto announced open-source software called Bitcoin. Satoshi Nakamoto created an electronic payment system based on algorithms. The idea is to create a currency that is not dependent on any intermediary. However, it is also possible to transact via the internet quickly with meager fees. And that is how Bitcoin came into being.
There have been many rumors about the true identity of the creator of BTC. However, all the people mentioned in the rumors have publicly denied being Nakamoto. Except one, Craig Steven Wright, an Australian scientist, and businessman. He also insists on identifying himself as the father of Bitcoin. However, this statement is not trusted by many people …
Until now, Satoshi Nakamoto is still a mysterious name. This man (or even a woman) is also the character who owned the first Bitcoin. Nakamoto’s wallet address is up to a million BTC. However, he was found to have not transferred any BTC from this wallet address. Many people suspect that this may be an alien.
No one controls Bitcoin.
For many, the main advantage of Bitcoin is its independence from governments, banks, and large corporations. No institution can interfere with BTC transactions. No one has the right to impose fees on anyone’s transaction or money. Moreover, Bitcoin is exceptionally transparent. Every single transaction is stored in a large distributed ledger called Blockchain.
Bitcoin gives users full control over their assets.
According to the core Bitcoin network developer Gavin Andresen, the first thing he focused on after Nakamoto left the project was to develop Bitcoin further decentralized. Andersen wants Bitcoin to continue to exist autonomously, even if there are no developers left. In fact, the more you learn about Bitcoin, the more mysterious and exciting you will find it.
How does Bitcoin work? The simple thing about Bitcoin for a beginner
All that people see is just the balance of BTC on the wallet and the results of transactions, profits, … But, little is known behind the scenes, Bitcoin network is sharing a public ledger called Blockchain. The Bitcoin blockchain contains every transaction information that has ever been processed. Digital records of transactions are combined into one block.
If someone tries to change only a letter or a number in a block; This will also affect all subsequent blocks because Bitcoin is a public ledger. Therefore, anyone can easily detect and fix errors on the network.
A user’s Bitcoin wallet can verify the validity of each transaction. The digital signature corresponding protects the authenticity of each transaction to the sending address.
What are the characteristics of Bitcoin?
Bitcoin has different characteristics from the currencies issued by the government.
- Decentralization
The Bitcoin network is decentralized, with no servers operating on the peer network. Therefore, the Bitcoin network could not occur manipulation, server collapse, or server owner was captured, and the government collapsed …
- Ease of setup
To create a bank account, you need to go through many stages and force you to submit documents and personal information to the bank. Whereas, with Bitcoin, you can create a Bitcoin wallet to store in seconds, without any fees.
- Anonymous
A person can hold multiple Bitcoin addresses and do not need to declare their name, address, or personal information. No one can figure out which Bitcoin wallets you own, what your total Bitcoin assets are.
- Transparency
The Bitcoin system stores details of network transactions in a ledger called the “Blockchain.” Blockchain ledger will tell you everything.
- High security
You cannot hack directly into the Bitcoin network. If you want to do that, you need to hack into all the nodes in the Bitcoin network at the same time. And this is an impossible task!
- Low transaction fees and fast transaction speeds and non-refundable
Once your Bitcoin is transferred, it cannot be refunded unless the recipient sends it back to you. Because once the information has been written to the Blockchain, no one can change or modify that information. Therefore, when transferring BTC, please check the address of the recipient very carefully.
How to get and invest Bitcoin for a beginner?
According to the origin, mining is the first way to own Bitcoin. Only a few years ago, anyone with a powerful computer could mine Bitcoin. But now this is getting harder and harder. Because of the increasing popularity and Bitcoin price, large companies have entered the game, equipped with more advanced equipment than us. From there, mining difficulty and hashrate skyrocketed. Moreover, after Bitcoin Halving 2020, the mining reward will be halved.
The easiest way to invest Bitcoin is to buy. You can buy Bitcoin on many exchanges such as Coinbase, Binance, Huobi, …
- What Is Binance? How To Register On Binance?
- What Is Coinbase? How To Register And Trade On Coinbase?
- What Is Huobi Global? How To Register On Huobi Global?
- Top 10 Best Exchanges To Buy Bitcoin
Alternatively, as an information Bitcoin for a beginner, you can buy Bitcoin in the OTC market. You can pay them in cash, bank transfer, or even pay in other cryptocurrencies.
What can you use Bitcoin for?
On May 22, 2010, 10,000 Bitcoins were used to buy two Pizzas worth only $ 25. This Pizza purchase is also considered the first real transaction in the world to use Bitcoin. To date, the scale of accepting Bitcoin is growing. Bitcoin holders will have more shopping and spending options.
For example, giant companies like Microsoft and Dell have accepted BTC payments for their wide range of digital products and content. You can use Bitcoin to pay for air tickets on AirBaltic and Air Lithuania airlines or buy Theater Tickets Direct from England. You can even use Bitcoin for drinking a few bottles of craft beer from Honest Brew, etc.
Besides, you can pay for hotels and real estate, pay bills in many bars and restaurants around the world with Bitcoin. You can even join the dating site, buy gift cards, place bets on online casinos, and donate with Bitcoin.
Every day, more businesses – from small coffee shops to the industry giants – accept payment in BTC. Moreover, Bitcoin is a remarkable investment. You can buy it to hodl it. Or, you buy and trade Bitcoin on crypto exchanges.
Cons of Bitcoin
- Legal status
The legal status of Bitcoin varies dramatically from country to country. In some states, the use and trading of BTC are encouraged. While in other countries, Bitcoin is banned or outlawed. There has been a lot of concern regarding Bitcoin’s appeal to criminals. Indeed, when the infamous black market of Silk Road was closed, Bitcoin immediately plummeted.
- Level of recognition
Bitcoin is recognized and completely legal in many countries. However, some governments around the world still do not have any regulations related to BTC even ban absolutely. Most businesses, big or small, are utterly ignorant of Bitcoin. They are almost unable to give up all other currencies and start using BTC.
- Lost private key
The private key is the alphanumeric password needed to access the Bitcoin wallet. Losing your private key is completely losing your Bitcoin wallet and number. However, most current wallets have a backup and restore mechanisms. Still, it is clear that users, in particular, need to store this information carefully.
- High volatility
Bitcoin price has experienced ups and downs, going through various periods of soaring and falling. Some people even call them balloons. Throughout its history, BTC has conquered new heights, only to sustain a large decline shortly after that. The value of Bitcoin is unpredictable. It changes rapidly to dizziness and can cause significant financial damage to a reckless investor.
Should we buy Bitcoin and where to buy Bitcoin for a beginner?
If you own fiat, you need to pay attention to the currency of the exchange. There are crypto-fiat (crypto exchange with fiat money) and crypto-crypto. Many international exchanges support buying crypto with fiat via Visa, Mastercard. Exchanges include Binance, Huobi, KuCoin, Okex, Remitanom …
However, this form should not be the first choice because their transaction fees are very high. On the other hand, Binance and Remitano are still the two best options so far.
Before starting to buy yourself the first BTC, you should note:
- Choose for themselves a reputable, clear and well-supported trading platform
- Choose a Bitcoin wallet that suits your needs
- Do not put all your money in one place, avoid unwanted incidents (exchanges, wallets hacked, collapsed, …)
- Find out information about certain trading platform and exchanger before trading
- KYC and use 2FA security on the exchange
Conclude
Understanding how to store and understanding the critical notes when buying Bitcoin will help you have an excellent first experience with the crypto market. There are two forms in crypto: TRADE and HODL (hold). Whichever side you choose, the next step you’re curious about will be how to sell Bitcoin? Or, how can you make more money from Bitcoin?
The next article will guide you from A-Z on how to buy Bitcoin for a beginner. Please look forward to it!
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