If you have been following the articles published in the field of technology and investment, you must have seen the name Bitcoin. In the article Everything about Bitcoin from the Bitdemy website;
We will discuss what Bitcoin is, its history, important characteristics of Bitcoin, the use of Bitcoin, Bitcoin mining devices, and ways to earn money from Bitcoin or cryptocurrencies, etc.
Everything about bitcoin
What is bitcoin
To put it simply, Bitcoin (BTC) is a type of digital currency that can be sent and received over the internet.
Overall, Bitcoin is a way to transfer money, but with very important characteristics, which we will discuss below.
Bitcoin history
Bitcoin is the first decentralized cryptocurrency, created in 2008 by a person or people known by the pseudonym Satoshi Nakamoto.
As we mentioned, Bitcoin was created in 2008 as the first cryptocurrency, but it was not until 2009 that it was used as a currency.
You can read the Bitcoin whitepaper from this link. This article contains technical information about the currency and how Bitcoin works.
The most important characteristics of Bitcoin
The most important differences between Bitcoin and other digital currencies created before and after it:
- Bitcoin's source code is completely open source and available to the public for study and modification.
- Bitcoin uses a peer-to-peer network called blockchain to store information.
- Any Bitcoin user can use it simply by creating a wallet address without providing any identification documents. (Suggested: Cryptocurrency Wallets Article)
- The process of creating each Bitcoin is called mining.
- The maximum number of Bitcoins is limited, and a total of 21 million Bitcoins can be produced.
- The price of Bitcoin is determined by supply and demand and is not overseen by any organization or institution.
- Anyone can view transactions related to different wallets, but there is no way to identify the person using a specific wallet.
- It is not possible to make changes to the blockchain information (the Bitcoin database) and it has become very difficult and almost impossible today.
The main use of Bitcoin
Bitcoin is a fast way to transfer money and has very low fees compared to traditional bank transfers.
Using Bitcoin, you can easily transfer money anywhere in the world.
transferring and receiving money confidentially is one of the applications of Bitcoin.
Earn money from bitcoin
The main ways to earn money from Bitcoin include mining and buying and selling Bitcoin, both of which we will discuss in the article Everything About Bitcoin.
Bitcoin mining
As we mentioned, the way to create new Bitcoins is to mine bitcoin.
In this process, you use your computer hardware and special Bitcoin mining software;
to confirm transactions and find new blocks, and after finding a block, you receive the reward in your wallet.
When Bitcoin was first created, this was possible using personal computers and only the processing power of the CPU.
But after the increase in Bitcoin miners, this became almost impossible.
Because when new miners are added to the Bitcoin network, the difficulty of the network also increases and more time and computing power are required to receive new Bitcoins.
After the possibility of mining Bitcoin using processors disappeared, mining software changed.
And instead of the processor, the processing power of the graphics card, which is much faster and more powerful than the CPU, was used.
Mining pools were also created, allowing miners to merge their processing power
And then they proceed to mining (a method that is still in use today).
Using mining pools, each miner receives Bitcoin for the time and computing power they provide to the pool.
(Recommended: Guide to Choosing the Best Cryptocurrency Wallet)
Bitcoin Mining – The Rise of ASICs
After more miners were added to the network, graphics cards were no longer capable of mining.
Therefore, various companies have created devices called Bitcoin Miners that have higher processing power for this task than graphics cards.
These devices, called ASIC, were produced for one purpose only, namely mining cryptocurrency with a specific algorithm (in the case of Bitcoin, SHA256), which is still in use today.
Another thing you need to know about Bitcoin mining is that new blocks are created every ten minutes.
And the block reward is halved every 4 years until the day no new Bitcoins are produced.
After mining 21 million Bitcoins, miners will only receive users' transaction fees as a reward.
All About Bitcoin – Miner Power Consumption
The key point about the Bitcoin miner device and its connection to electricity is that:
You need a lot of power to perform calculations and mine Bitcoin, and each Bitcoin miner requires at least more than 1,000 watts of power.
(Suggested Article: Everything About Blockchain)
Everything about bitcoin - Bitcoin trading
Another way to earn money from Bitcoin is by buying and selling Bitcoin.
You can either offer Bitcoin buying and selling services to others and receive a commission, or you can act as an trader.
Of course, to get started, you need to have proper knowledge about technical and fundamental analysis and other issues related to trading in financial markets.
The Bitcoin market, and cryptocurrencies in general, like other financial markets, offers you the opportunity to make money, but its main difference from most other markets is its extreme volatility.
Buying and selling Bitcoin is done on platforms called online exchanges, which are generally divided into two types: centralized and decentralized.
In decentralized systems, all transactions are carried out on the blockchain platform,
But in centralized systems, buying and selling takes place in exchange databases, and only deposit and withdrawal transactions are carried out on the blockchain platform.
Check the best crypto exchange list on this link .
Summary of the article Everything about Bitcoin
In this article, we tried to provide you with brief and useful information about Bitcoin.
Of course, this article will definitely be updated over time and other useful information will be included.
