Bitcoin, known as a cryptocurrency, cryptocurrency, or cryptocurrency, is a very secure digital medium that enables the exchange of money .
It is the first cryptocurrency created and it is the most reliable for many companies and people to date. Its decentralized network is powered by its own users, since there is no intermediary or central authority.
Bitcoin uses very strong cryptography , which secures all transactions, verifies every transfer of assets, and controls the creation of additional units.
In addition, it is free from price regulations and its price has grown greatly since its inception. As with national currencies, Bitcoin is abbreviated as BTC.
But knowing what Bitcoin is is not enough, in this blog you will find all the useful information related to this cryptocurrency , which will introduce you to the world of this great cryptocurrency.
Who created Bitcoin?
The concept of crypto currency was first introduced by Wei Dai in 1998, on the email list called cypherpunks .
This concept developed the idea of a new type of money, which would use crypto to control its creation and its own transactions.
The implementation of this concept is what is known today as Bitcoin . The person behind Bitcoin’s creation calls himself Satoshi Nakamoto , but to date, no verifiable identity has been revealed.
This has led to huge speculations and deductions from whoever may be the creators of Bitcoin, but none has worked.
Brief history of Bitcoin
Bitcoin started in 2008, when an article was published on the crypto mailing list metzdowd.com. This article described a P2P (peer-to-peer) system of digital money, which would operate without central authorities or banks.
But it was not until 2009, that the Bitcoin software was published with the relevant network (which bore the same name) and the first units of currency called Bitcoins. 45.
In mid-2010, Satoshi Nakamoto agreed to collaborate with programmers who joined his project to include improvements.
But at the end of the year, he handed over the network alert key and control of the source code repository to Gavin Andrese.
Nakamoto ended up transferring the related domains , with prominent members of the Bitcoin community, and then abandoned the project. Gavin , who gained full control and became the developer who spearheaded the Bitcoin Foundation. 26.
One of the things that is known about Satoshi Nakamoto after his retirement is his transaction log . Known addresses are shown there, with an approximate amount of 1 million Bitcoins.
This amount is deposited in a purse on the same platform and has not been modified to date.
Although knowing the true identity of Satoshi Nakamoto is meaningless, since the code behind the Bitcoin software is known, for any programmer to review or create their own modified version, it is something that is still debated.
The main objective has always been for the network to remain decentralized and remains so to date.
How does Bitcoin work?
Viewed from a user’s perspective, Bitcoin is just a desktop or mobile app , supplying a personal Bitcoin wallet .
This wallet allows the user to transfer and receive Bitcoins , carrying out a process similar to that of a transaction by platforms such as PayPal.
Behind all this, the Bitcoin network shares a book for the record of buying and selling with its users, which is known as Blockchain. It contains each transaction that is processed, allowing in turn to verify its validity .
Blockchain is a decentralized public registry, which stores all transactions made with Bitcoin in a ” block “.
This technology allows a certain number of transactions to form that database unit , with the aim of giving transparency to processes .
Each block stores information about the previous one and each transaction stores information about its previous transaction . In this way, blockchain also provides full transparency of payments.
Blockchain uses open source and its maintenance is done using the collective power of millions of computers. This code is the one that allows transactions to be verified and added to blocks.
After being collectively verified , they cannot be modified or eliminated, which is why Bitcoin payments are indisputable and final.
The transactions added to the blocks allow Bitcoin wallets to determine their spendable balance.
This is useful for new transactions to be verified and, in turn, to ensure that the collection per transaction is from the user making the payment.
They also have an authenticity , which is protected by digital signatures and corresponds to shipping addresses. This allows all users to have full control when they send Bitcoins from their addresses.
Furthermore, any user can process a transaction, using the computational power of specialized hardware and get reward Bitcoins . This process is known as mining and will be defined later.
Who supports Bitcoin?
To understand who or what supports Bitcoin, we will give a brief example explained by Federico Ast , Economist, Philosopher and Doctor of Business Administration.
” The price of the dollar is backed by the great confidence that people have, that the dollar they receive today, as payment for something, they will be able to use for something else. Ultimately, this is underpinned by the confidence that there is in the US government, in the ability to fulfill its commitments. ”
“Anything only, is worth depending on the confidence that people have in that thing and Gold, Bitcoin or dollars is no exception .”
That is why they are their own users , who support Bitcoin , giving confidence and protecting every transaction that is made.
In this system, each transaction must be validated by all the users of the network (those data managers, through a consensus mechanism).
Therefore, with the union of both things (trust and security) , the support that Bitcoin has today is indisputable.
Who regulates Bitcoin?
Over the years, Bitcoin has had an impressive and unexpected volatile behavior , since there was no government entity that regulated this cryptocurrency.
The Bitcoin network is completely decentralized, so its value is subject to supply and demand , managed at that moment.
Many countries and financial specialists have repeatedly requested the regulation of Bitcoin and any currency that is virtual .
These have shown concern about the lack of regularization and, in turn, about the exponential growth of operations carried out with cryptocurrencies.
This has also set off alarms in entities such as the European Central Bank and the International Monetary Fund.
In the same way, countries such as France, India, Germany, China and Spain have joined, requesting the regulation of Bitcoin, to prevent these virtual coins from being used in money laundering worldwide.
And although the board of the International Monetary Fund , Christine Lagarde, communicated that the regulation of cryptocurrencies is inevitable and that it is only a matter of time for them to be under government supervision .
Furthermore, this measure is not expected to affect the current conditions of Bitcoin, which is also a concern.
In the United States, cryptocurrencies could be regulated by the Commodity Futures Trading Commission (CFTC), qualifying these cryptocurrencies, within the Commodity or raw material category .
This has the main objective of supervising operations and avoiding possible irregularities or scams, since the C FTC will have the power to file charges against criminals.
But generally speaking, it can be said that Bitcoin is not regulated . Only in Mexico, it can be said that Bitcoin is almost regulated , after the creation of the Fintech Law (Financial Technology Law).
This law arises from a project prepared by the National Banking Securities Commission (CNBV), Banco de México and the Ministry of Finance (SHCP), with the aim of prohibiting some activities that may be related to scams.
In turn, it also contains the regulation for everything that takes place in banks, start-ups and the acquisition of interfaces.
In addition, any company that handles electronic payments (deposited in electronic wallets), will also be able to protect cryptocurrency capital .
But before, operations carried out with virtual currencies must have the consent of Banco de México.
The objective of this law is to guarantee the safety of investors in your country , which also occurs in other countries that show concern about the current handling of Bitcoin .
How is Bitcoin different from fiat currencies?
When Bitcoin was created , it was devised as a completely decentralized and open economic system to all, which proposed to its users, a monetary and exchange system, better than the fiat money system that we know to date.
The fiduciary money, or fiat, is that issued by all banking entities. It is subject to certain regulations and in all countries it is controlled by banks and governments.
This implies that the printing of banknotes can be increased , according to the needs of each State and establish the strategy or policy that the government entity suggests.
The fiat money , does not have a fixed number of units that can be put into circulation and also not a certain and predictable pattern when it is issued and how it will be distributed. What for many today generates great mistrust.
Any form of digital money a person holds, in a bank account or card, is basically not theirs . You could not say that each person owns their money (deposited in banks), but owner !
This is because you do not have full control of the money . In addition, Bitcoin continues to be better backed than any currency, since it is not affected (as it happens with fiat money), by the inflation present in each state.
The fiat currency is easily manipulated and a government, if necessary, could easily devalue it.
Even in the event of a devaluation, it would also be a problem that increases exchange rates between currencies . Changing the money to another fiat currency, would turn out to be much more expensive than usual, when there is devaluation.
In these cases, there is also a difficulty (established by the States) to withdraw capital . Bitcoin has an advantage over any fiat currency , because it gives its users more power. The biggest advantage that Bitcoin offers is allowing them to own their own money.
Deciding how, where and how much money to send or receive will be your own decision . There is no limitation that censors the user in those aspects and the same Bitcoin community is the one who endorses it.
Something very interesting is the maximum limit that was established from the beginning, which has given more confidence to users. The maximum limit of Bitcoins created will be 21 million units .
And users decide its value , that is, the price of a Bitcoin cryptocurrency. This is based on the free and real utility of it, which is also stipulated, based on the need that it covers and the extent to which it does so.
The better you protect people ‘s need for money exchange and custody of value, the more useful it will be.
What are the advantages of Bitcoin?
There are many advantages of Bitcoin today, which end up being summarized as:
Currently, payments made with Bitcoin are processed without any fee or with low fees . Each user can incorporate a rate in their transactions, to obtain priority in their processing . This ends in a faster confirmation of the transaction , by the network.
In addition, merchant processors are responsible for guiding merchants, in the transaction process , transforming Bitcoins into fiat currencies and depositing funds in the merchant’s bank account and directly.
These services, being based on Bitcoin , offer much lower charges than those offered by platforms such as PayPal or common credit card networks .
Freedom in payments
Bitcoin allows you to receive and send any amount of money instantly , regardless of where or where it is directed internationally. Nor does it matter when the transaction is made.
Bitcoin is considered a free currency , since it does not depend on banks, hours, borders or imposed limits. Bitcoin users have full control of their own money.
Control and security
Bitcoin users are the ones who manage their own transactions. There is no possibility for merchants to force some unwanted charges , as can happen with other payment methods.
Bitcoin allows its users to make payments without being associated with personal information. With this, it offers a high level of protection against identity theft. It also offers its users to protect their money by creating backups and encryption.
Low risks for traders
In Bitcoin , transactions do not include private customer data and are secure and irreversible . This protects merchants against losses generated, by fraud or fraudulent return .
The transactions Bitcoin not warrant compliance with PCI standards . In addition, merchants have the option of operating in new markets , where credit cards are not available or fraud levels are high .
This leads to bigger markets , lower administrative costs and better commissions.
Transparency and neutrality
Complete Bitcoin information is available on your blockchain , for anyone to review and use .
No external entity manipulates or controls the Bitcoin protocol , because it has a very secure cryptography . Its neutral position is what makes Bitcoin transparent and reliable.
What are the disadvantages of Bitcoin?
Some of the disadvantages of Bitcoin are:
The amount of Bitcoins in circulation and the number of businesses using this cryptocurrency, is still very low compared to what could be the future.
This implies that small events , such as business activities or exchanges, affect the price of Bitcoin.
But this is not entirely harmful, it depends on which side the user is on. The current price of Bitcoin , have risen to the, help those who wish to sell Bitcoins , but affect those who wish to buy .
The Bitcoin is driven by supply and demand , which is why to know how much a Bitcoin , they will need to know data at the moment and will depend on the population.
The current percentage of people who know about Bitcoin is still not what was expected. The less people still do n’t know how to use Bitcoin , the less supply and demand there will be. So the list of businesses and people who use Bitcoin , should continue to increase.
As time progresses, new needs arise in the population. These needs must be covered by the Bitcoin software , that is, be more complete and easier to use.
Bitcoin needs to have the total trust of people, in order to continue improving and become accepted globally.
Why does Bitcoin have value?
The Bitcoin virtual currency has value, because it turns out to be quite useful as digital money . It is characterized by its portability, scarcity, durability, fungibility and divisibility, which make it very safe and efficient.
Furthermore, its value is supported by mathematical properties. But like all cryptocurrency, it is maintained with the adoption and trust that people can give it.
When we talk specifically about Bitcoin , its value is strengthened through growth in users, companies and new merchants, reaching a Bitcoin price today of € 6,688.36.
And although the price of Bitcoin is constantly changing, that is not the interesting thing. The impressive thing is, how it has come to have such a high cost , after having started from scratch .
Is it safe to invest in Bitcoin?
The biggest question that people ask themselves is whether it is safe to invest in Bitcoins or not , and before that it can be said that of course it is.
This is because Bitcoin advocates argue that no person or organization can control this cryptocurrency.
This simple fact is what finally gives the certainty that investing in Bitcoins is a good option , but doing it the right way .
Each user must protect themselves from any scam , since, as in any virtual platform, not all users should be trusted .
And although the Bitcoin network has a good security system , the important thing is to always be alert to any scammer who is looking for your money.
The security firms , before a possible code theft warning to any user and also do when cyber attacks to exchange it is.
But, when to invest in Bitcoins ? That will depend on the acceptance that each user has , before the advice of a specialist.
What you should know is that the Bitcoin price , as mentioned above, is determined by supply and demand .
When demand is low , the price of Bitcoin is low, and when demand is high , quite the opposite, obviously.
At the end of 2017, this cryptocurrency had the highest demand registered to date, reaching an economic value of almost € 18,000 / Bitcoin.
And although the objective of each person, at this time, is to multiply their money with each investment they make, when buying Bitcoin, this cryptocurrency is also seen as a possible basis for the economy in the future, so it will be best to find out from already.
What is recommended to each user, who wants to invest in Bitcoins to obtain profits and not losses, is just that, that they be well informed .
It is also recommended to choose good places to buy Bitcoins , which guarantee a lot of security.
What is the price of a Bitcoin?
The Bitcoin price is generally found on web portals specialized in cryptocurrency trading .
The Bitcoin value is expressed in real time, as a consequence of supply and demand movements that it has at that moment.
Experts argue that its price will tend to increase, since its number is limited in time. As the number of users increases, the demand will increase and so will its value.
Many argue that Bitcoin has a pyramid nature , but experts have denied this claim, refuting that Bitcoin is not pyramidal, because there is no single user who benefits.
Bitcoin is a global virtual currency and its price is commonly set in euros and dollars.
For example, the Bitcoin Euro price right now is trading at € 6,688.36 and $ 7,463.87. It is also found in fiat currencies of each country.
Bitcoin is similar to a Spanish stock market because, as with any investment, there is no guarantee that its value will not change.
There are people who invested 70 euros in Bitcoin in due course and now own 200,000 euros as a result of their investment.
Where to buy Bitcoin?
Currently, you will find many places dedicated to buying and selling Bitcoins , some used globally, and others not so much. These places are called exchange houses and to start operating, you must register .
How to buy Bitcoin?
As mentioned above, when we refer to how to buy Bitcoin , you must be registered with an exchange office.
For this, supporting documents must have been delivered , in order to confirm the registration and allow us to operate.
Generally, they request the DNI or driver’s license , but if the chosen exchange office does not request any supporting document , it is best not to give confidence. Each exchange office complies with the necessary legality , requesting this type of document.
After attaching the requested document , the data is checked ; upon verification, they give immediate permission to operate. After registering and making a FIAT deposit , you can purchase the amount of Bitcoin you want.
After knowing how the purchase of Bitcoins is made , you must know the payment methods . Currently, there are 3 ways to pay for Bitcoins :
Buy Bitcoin with bank transfer
You can make a SEPA bank transfer (which is generally free in all banks), to the number indicated in the exchange office.
It is important to put in the concept of transfer, what is indicated to you, to allow them to locate your transaction and recognize you as a user.
Buy Bitcoin with a credit card
Generally, exchange houses have a specific section for it. Although paying with a credit card involves charging an additional percentage , sometimes it is comfortable to do so for your ease.
Buy Bitcoin with Paypal
It is possible to use the Paypal platform in some exchange houses, for the purchase of Bitcoins , but it is not very common, due to the high commissions it charges per transaction.
In addition, what also happens with this platform, is that you have the option of making the payments reversible . This fact causes problems for the exchange houses , which serve as intermediaries for buying and selling Bitcoin .
Reversing the sending of cryptocurrencies is a complicated process for exchange houses. For this reason, it is a payment platform that is not widely used or recommended for such purchases.
What are Bitcoin for?
The Bitcoin can be used for purchases or sales of items from individuals and businesses, provided they accept Bitcoins as payment. This cryptocurrency differs from fiat currencies, because there is no physical currency to represent it.
Bitcoin is always presented in digital currency and its system works as a payment network without inactivity . In other words, its platform can be used for transactions at any time and it does not matter to whom or where the money is sent.
With this cryptocurrency you can do the following:
- Purchase anonymously.
- Transactions (send and receive it) through its platform and anywhere.
- The Bitcoins can be used to save money, as if it were a bank account, but with some differences.
- The Bitcoins offer an alternative way to get profits from future investments. There are those who solve complex mathematical puzzles, using computer equipment to win Bitcoin .
Can you make money with Bitcoin?
The Bitcoin network is a platform that allows its users to earn money . The most common method since the beginning of Bitcoin has always been to acquire them and then sell them, when their value has increased . But things have changed, as there are now new ways to do it.
Generally the first step to make money with Bitcoin, is obtaining the first currency . But currently, each user can earn money the way they want.
The most used methods to make money with Bitcoin are:
Cash in Bitcoin and resell them
To earn money with Bitcoin , the user can receive payments through the Bitcoin network , for any service or product that it offers. In addition, these payments can be anonymous and encrypted , which gives an advantage in any business.
To be able to charge through Bitcoin , you need to have a payment platform supported by your network. This platform helps the user to collect Bitcoins on a blog or website, and then convert them to an existing rate.
Bitcoin gives the option of having its own address , which is made up of a 16-digit code. Its objective is to allow payments from anywhere.
To change the Bitcoins obtained to a preferential currency, with a reliable exchange service, the Bitcoin money must be in a Bitcoins portfolio .
Buy Bitcoins and retain them
This method is the most common , which has been done since Bitcoin started , and is currently known as trading.
The trading of Bitcoin , is only investing in investing in this cryptocurrency, when its price is low and hold them up to increase.
What it takes to make money with this method is to have a Bitcoin wallet (virtual or physical) and a good provider of Bitcoins or money exchange , to make the investment.
After acquiring Bitcoin at an exchange house or from a provider , all that remains is for the user to wait and observe the behavior of Bitcoin .
Get Bitcoins with mining
This last method allows you to obtain Bitcoins without paying for them.
To make money with mining , you must have specialized software . The definition and process for mining Bitcoins are explained further in the next section.
What are Bitcoin miners?
In traditional fiat currency systems , states and governments can print as many notes as they wish, in light of any action to be taken. But this does not happen in Bitcoin , for 3 simple reasons:
- Only 21 million Bitcoin cryptocurrencies can be created and it is not something that can be modified.
- The amount of coins that can be released, as a reward for the work done, is limited in your software .
- This amount decreases by half every 210,000 blocks, due to a process called halving (which will be explained later).
While the time comes when the 21 million Bitcoins are finished being issued , new coins are in circulation every 10 minutes. These coins are obtained by the miners, in compensation for the work they do.
But what is the work that miners do and what do they do? The miners are responsible for validating and generating the blocks, which make up the ledger belonging to the blockchain network . In this network, all transactions made are recorded.
Therefore, they are responsible for processing transactions and securing the network , using truly specialized hardware.
And the work done, for which they get the reward, is based on solving math problems that arise every 10 minutes. To mine Bitcoins , it is necessary to be the first to solve this problem.
These problems are based on random calculations , which seek to be solved in order to obtain the validation of the block .
The person who solves it will take the reward , as long as the answer is correct and approved by the rest of the members of the network .
Miners not only earn new coins that are put into circulation, they also earn transaction fees for their validation work. How much do you earn for mining bitcois? In the code it is established.
Within the Bitcoin code , it was established that when a block was validated, a number of new coins would be obtained in circulation.
Currently, the figure obtained is 12.5 Bitcoins , but soon (from this year 2020), the amount will be reduced to 6.25 Bitcoins .
And how much is a Bitcoin worth that comes from the mining process ? It still has the same value , which depends on the supply and demand conditions at that moment.
What is Bitcoin halving?
Halving can be defined as an automated process that halves the Bitcoins that miners receive as a reward. This, by creating a block.
What is Bitcoin halving for?
To incentivize mining through work tests, it was established that, with each block created , a certain amount of Bitcoins are put into circulation . This quantity decreases automatically and by half every 210,000 blocks.
The halving limits emission of Bitcoins directed to miners . This escalation mechanism was created to control said emission , so Bitcoins are not immediately distributed.
This fact allows for new Bitcoins to be in circulation. It is a presumable process of initial democratization, so that the distribution of Bitcoin does not end in a few hands.
As Bitcoin is a deflationary currency , which implies that its supply is increasingly limited and difficult to extract, such as gold , for example, Satoshi Nakamoto decided to regulate its supply , reducing the amount of Bitcoin that miners could extract (with the halving).
Every 210,000 blocks is halved, a fact that occurs approximately every 4 years , based on current conditions.
When Bitcoin was launched in early 2009, the fee to mine a block was 50 BTC . This fee was halved ( 25 BTC ) on November 28, 2012, after mining the 210,000 block .
Halving is expected to continue working until the cycle ends (reaching 21 million Bitcoins created) and to continue rewarding miners for their work.
When that happens, since there is no halving , the miner will only receive the transaction fees . But this will happen, according to calculations made, in the year 2140; when the last block ( 6,930,000 ) is reached .
Bitcoin is legal?
In terms of legality, Bitcoin has always been in the middle, on whether it is legal or not (in most countries). But there is a minority group, which does not give legality to its use.
There are few countries that have not had empathy with Bitcoin, to the extent of declaring it illegal. But that does not mean that Bitcoin is a legal currency .
The legality of a cryptocurrency is simply based on the protection of the people or businesses that use it.
Contrary to Bitcoin , what was known until a few years ago, were fiat currencies , created, controlled and released by a single entity.
The person who tried to buy the currency, keep it or sell it , would be committing a serious crime.
When Bitcoin appeared, it generated a paradigm for all people, being a completely decentralized currency , implying not being controlled by anyone.
In addition, anyone with a good computer and the appropriate software can create coins just by being an active part of the community, which goes against the established, for the fiat currencies corresponding to any country.
As Bitcoin is being generalized, the competent agencies in charge of enforcing the law are trying to understand and fit this concept and, in turn, the regulations and legal frameworks .
Knowing if Bitcoin is legal is something that depends on who the person is, their location in the world and what they do with the currency.
Although it is not a legal currency in many countries, sending and receiving payments is generally still allowed .
Based on some statements, it can be stated that Bitcoin is legal in : the United States, China, Japan, Colombia, Spain, Germany and Sweden. In some of these statements, trust in Bitcoin has been demonstrated and others simply accept Bitcoin in order to regulate it.
Bitcoin may be legal in the future , as its acceptance by businesses and people continues to increase.