Bitcoin for Beginners

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In recent years, there has been a lot of talk about Bitcoin. It seems everyone is talking about digital currency and how it can affect the future of online transactions. Some believe that cryptocurrency will replace traditional forms of payment. Others believe it is just a passing fad.  Bitcoin can be intimidating for beginners, so we’re here to help you start your journey.

What Is Bitcoin?

Bitcoin is an online currency that uses decentralized cryptography to control its transactions.  It was designed to be a form of digital cash that could be used anonymously and independent from third party providers.  Unlike banks, it doesn’t rely on a central authority. This gives it the benefits of lower transaction costs with higher levels of security and anonymity.

What Is The Blockchain?

The blockchain is a public ledger that records all Bitcoin transactions. Every time someone wants to spend their Bitcoin or transfer them to another user, the transaction is checked against this ledger. The network then uses consensus between several nodes (also called “miners“) to verify any changes.
Miners use their computers to confirm these transactions and ensure no fraudulent activity takes place. They do this by solving complex cryptographic puzzles to add new blocks (transactions) to the blockchain.
Miners also get paid for providing this service. For every block they add before anybody else, the miner will receive several bitcoins as a reward. This is how new coins are introduced into circulation.

Who Created Bitcoin?

Bitcoins founder goes by the name of Satoshi Nakamoto.  It is unknown whether Satoshi is a person, or group of people. Despite claims and speculations made by various media outlets and reporters, no one has been able to verify who Nakamoto really is.

The Birth of the First Bitcoin Block

Many people believe that Bitcoin was officially “born” in 2008.  That is when Satoshi published a technical paper called “Bitcoin: A Peer-to-Peer Electronic Cash System“. However, at that time, the system wasn’t yet built. Satoshi mined the first block of bitcoins, known as the Genesis Block, on January 3rd, 2009. Several days later, on January 12th, is when the first Bitcoin transaction took place. A user named Hal Finney received 10 bitcoins from Satoshi as a test, and a legacy was born.

What is Bitcoin Mining?

The process of adding new transactions to the blockchain and creating new coins is known as mining. To put it simply, miners use their computers to solve a complex cryptographic puzzle that contains all previous transactions added to that specific block. Once they solve this “puzzle”, they get rewarded several Bitcoin for every block that is added to the blockchain.  This means that not all coins are released at once, they are mined slowly over time.

How Do You Mine Bitcoin?

Mining Bitcoin requires  powerful computers.  In the beginning, CPUs (Central Processing Units) were popular with crypto miners.  Some cryptocurrencies, such as Ether, can still be mined using GPUs.  Bitcoin, however, requires specialized hardware that are built specifically for mining cryptocurrencies, called ASICs (Application Specific Integrated Circuits)

There are many different manufacturers that make ASIC mining rigs.  Bitmain, MicroBT, and Innosilicon are just a few of the big names in this space.  New machines can be expensive (Most of the mid- to top-tier rigs cost $5,000 or more).  This can make getting into mining Bitcoin intimidating for beginners.  Used mining rigs can also be purchased from sites like Amazon or Ebay.  It’s very important that you take the time to double- and triple-check any seller that you decide to purchase from.

The Birth of Mining Pools

The mining capacity, or total hashrate, has increased exponentially over the years due to the rise in power and number of ASIC devices.  As more machines come online, it becomes harder for any individual to receive a mining reward.  This led to the creation of pools where multiple miners combine their hashing power and share any earned rewards.

Mining pools allow people with lower-end or used hardware to still be able to make a profit mining.  Once again, it’s possible for beginners to make money mining Bitcoin.

Adoption and Ban of Cryptocurrency

The recent ban of cryptocurrency in China has had a big impact on the price of Bitcoin. Many of the biggest mining operations were based in China. With cryptocurrency trading now banned, many people thought that the price would fall and demand drop off.

While it’s definitely true that cryptocurrency proves to be quite unpredictable from time to time, it’s important to remember that China hasn’t banned Bitcoin itself. In fact, the ban on cryptocurrency exchanges won’t affect people who trade Bitcoin in peer-to-peer networks or directly with each other.

On the other hand, some countries have implemented a different approach to cryptocurrency. For instance, El Salvador became the first country to adopt a cryptocurrency as legal tender. As this trend continues, more countries are likely to adopt cryptocurrency as part of their financial system.

Where Can I Get Bitcoin?

Figuring out where to start with Bitcoin can be intimidating for beginners.  The easiest way to get started is on a centralized exchange (CEX).  Exchanges such as  KuCoin, Robinhood, Coinbase, are all great places to start.  They provide easy-to-use interfaces, and some of them don’t even have any fees!  

The easiest way to get started is to make an account at one of those sites and dive right in.  As you get more comfortable, there are great resources online to teach you how to read charts so you can make the best decisions about when to buy and sell.

Why Is Bitcoin Good For Beginners?

There are many different cryptocurrencies in the world.  Ether, Dogecoin, Shiba Inu, and many others make headlines every day.  While they can all be good investments, here are some reasons why beginners may want to start with Bitcoin:

  • Most coins follow the same trend as Bitcoin
  • It has a long-term history of upward price movement
  • Supported by most major exchanges and wallets
  • Accepted as payment for many products and services

Conclusion

Even though it’s not quite clear what the future will hold for Bitcoin, one thing is certain – the value of this cryptocurrency will likely keep rising. Many people see it as a solid long-term financial investment.

When you look at the numbers, there’s no question why more and more people are getting into Bitcoin these days. There is quite a bit of money to be made by trading or setting up your own mining rig (or rigs). Of course, success isn’t guaranteed as things are always changing with cryptocurrency markets.

If you do want to give cryptocurrency a try, it’s probably best to start off small by purchasing Bitcoin on a trusted exchange. Read a bit on different trading strategies and dip your toes in the water.  Once you gain more experience, you can go on to set up your own mining rig and start earning rewards on your own.

Is there anything else you want to know about Bitcoin?  What effect do you think the bans or adoption will have on the future of cryptocurrency

Let us know in the comment section down below!