What is a Bitcoin and How does it work

what is bitcoin?

Bitcoin is cryptocurrency. If you bought a single bitcoin a year ago you would've paid just under $3000 for it. However, if you wanna sell that same bitcoin today it is worth over $11,000. It's important to know that this isn't a stock. It is a currency. it's a little bit different than something like a  dollar, or a rupees, or the dirham. But the same idea still applies here. And the reason, why bitcoin is skyrocketing in values, is because everyone wants to get. 

what is a bitcoin and how does it work

 How does this all actually work? 

 bitcoin relies on something called "the blockchain". A simple way to understand this is to imagine a ledger. any time anyone sells or buyers anything related to bitcoin is recorded in this ledger called "the blockchain" and then it is copied hundreds of thousands of times every single hour across multiple computers to make sure that everyone is on the exact same page. What makes this interesting is the idea that because it is copied across all these different computers and because it all is public.

The idea that I can just say, I have 5 bitcoin and try to tell that, he can check, and unless I can access all of the thousands of computers every few minutes and change those numbers, which is not remotely practical, sam is still going to be able to know that instead of my 5 bitcoins I have 0.001 bitcoin. Because that blockchain has to be double and triple and quadruple checked by computers.

All around the world, you can actually set your own computer up to help mine bitcoin.  every single time that you help process a transaction and make sure that it's legit you mine what is a  very tiny amount of bitcoin. If you mine bitcoin in the early days and held on to what you mined, you'd become a rich person today. However, in 2020, if you wanna set up a bitcoin mining system it really doesn't make a lot of sense. 

 However, nowadays ASICs have completely destroyed that market. And ASIC is essentially a small computer that its sole purpose in life is to mine bitcoin.  So if you do decide to put money into bitcoin, please keep in mind this is a super risky investment.  it could disappear at any minute. Hopefully, it won't but just be careful.

So last week a single bitcoin was worth about $9,000 but this week it's worth about 11,000 and next week it could be worth 15,000 or it could be worth $8,000. There's really no way of knowing. If all that hasn't scared you off, then it actually isn't that difficult to get your hands on some bitcoin.

what is a bitcoin and how does it work

The first thing you need to is a wallet to actually store them. There are a lot of different ways of getting yourself a wallet. So on the very secure side, you can get a hardware wallet that is going to be fully offline. But for most people, the easiest way is to create an account in an exchange such as Binance. The advantage of Binance is not only doing.

 they give you a wallet to store it in but you can also purchase bitcoin from them as well as some other cryptocurrencies such as Litecoin and Ethereum, and trade as well. which is the other two major ones right now. However, what can we actually do with it? However, the vast majority of people are using it as more of an investment.

 So you can buy some here, hope that the price goes up and then turn around and sell it later. However, it's not all just digital. So there are some cryptocurrency ATMs that you can go to in the real world, put your wallet information in and withdraw or deposit into them. I don't know if I would really use these myself, but it's a cool idea. 

Cryptocurrencies like BTC, ETH are a really interesting piece of tech to me, and the idea that they could be actual currency is super fascinating. However, how could it all go wrong? The big one is the absolute price.  There is no guarantee that is going to continue in the future. And if you're not interested in a  really risky thing like that, then bitcoin is probably not for you. Even though the blockchain is secure, there's nothing stopping someone from being able to steal your own personal bitcoin using your wallet.

 So just like if someone grabs your real world wallet and pulls the cash out of it if someone has access to your bitcoin wallet they can absolutely pull your bitcoin out of it. And this actually happened to me a few weeks ago. so, like anything, if you have your entire life savings under your bed, probably a bad idea. And if you keep all of your bitcoin in one place, an equally bad idea. Hopefully, you guys found this article useful and maybe learned a thing or two.  To me, it's really exciting. But let me know in the comments below and I will catch you in the next one.