What is Bitcoin? How Does Bitcoin Work? Everything You Need to Know 2024

Every country has its own currency like India has rupees, Europe has euro, etc. Every kind of 'give-&-take' happens through it. Like all, we can feel & see this sort of currency through our eyes in our own homeland. The government of every country or the banks have total control of their currency. Bitcoin is also a currency, but it is a digital currency. It's first decentralized cryptocurrency. It is created by people & operated electronically only through computers, i.e., the internet. It depends upon an open-source software by using that it is entirely decentralized.
Bitcoin Meaning —
Every kind of 'give-&-take' happens through the currency of that nation. The government of every country or the banks have total control over it. But have you ever heard about a hidden currency which can't be seen but that has turned the most valuable these days. Yes, I am talking about BITCOIN. It is a mode of digital currency. It's a fact that most of the people couldn't have heard this, but those who have heard about it, most of them don't know what Bitcoin really is? & how does Bitcoin work? What is bitcoin currency trading? How they make money bitcoin trading? So today I am gonna explain Bitcoin today here on this page. FYI the avg. value of 1 Bitcoin these days is around Rs.2,50,000. But it is a different thing that it is hidden, no one can see Bitcoin as it is a digital currency.

Bitcoin is the first decentralized cryptocurrency, created by the people & operated electronically only through the computers, i.e., with the help of the internet. It depends upon open source software, and it's not printed just like the rupees & dollars on any kind of material.

The most important feature of bitcoin is no one controls it; neither the government nor bank. It can be used anywhere, anytime. Anybody in the world can transfer the fund or money to others through bitcoin without the help of any third-party channel. Those who want to send money, they can send it from their Bitcoin wallet to other person's Bitcoin wallet. There is no any third party involved in the deal - treated as bitcoin currency trading. It takes place between two persons through computers or the internet in a computer coding (digital) language. When a person transfers Bitcoin to another, it shows codes. It's totally encrypted. To do these funds transfer process, they are charged only 2 cents, i.e., Rs.1.68 & that is so less. Lots of people are using bitcoin instead of regular currency. We have to make use of banks for our daily economic deals. But Bitcoin is a kind of financial service over which there is no control of any government, bank or agency. The give-&-take takes place directly between two persons & it is totally encrypted; so this is a fast & a secure way of economic exchange. When a person transfers bitcoin to your bitcoin wallet, there will be no notes or any kind of currency used; it comes as some digital codes & that codes show the transferred amount to your Bitcoin wallet.

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Quick Bitcoin Wiki

Before 5 years the value of 1 bitcoin was only Rs.6. & now it has increased to Rs.45000. It first started on 3 January 2009 by a programmer known as Satoshi Nakamoto. But still, nobody knows everything about him. There is no clear evidence about the founder. When Satoshi Nakamoto started bitcoin, he had no motive to convert it into currency. He wanted to prove that there can be a financial exchange & bitcoin currency trading without any involvement of any third party channel like government or bank. He wanted to show, it can be possible to exchange between two persons directly.

The first time it was attempted to give 10,000 bitcoins to pay the bill for pizza on 22 may 2010 which means it was costing less than 10 cents at that time & now it has raised in multiple of thousands. More & more people are trying to buy it since it came into focus; therefore the value of bitcoin is rising day after day.

Check out; 10 Legal Ways to Make Money & Earn Extra Cash Online

How does Bitcoin work? Let's explain it with a simple bitcoin mining example.

Suppose people are buying gold every month at regular price in the market, but suddenly the production of gold from next month is reduced to half & the no. of buyers is still the same. Then because of the shortage, the value of gold will increase. Consider if this starts happening every month then obviously the gold price will go much higher. The same thing happens with bitcoin. People know that the no. of bitcoin is decreasing; therefore its value is increasing. The value of 1 bitcoin in 2015 in India was Rs.14,000, in May 2016 it was Rs.30,000 & recently it is around Rs.10,45,000. According to this until this year, it will be somewhere around Rs.18,68,000. It's like mining of gold, and hence the name Bitcoin Mining.

The reason is as that of lots of big companies have started to invest in bitcoin stock trading, because they suppose that bitcoin is a future economy & the value of today's notes will be decreased. Till today there are around 8 billion mobile phones in the world while the population of the world is around 7 billion. There are 2 billion people who don't have bank accounts it means, all those users who have mobile phones start using bitcoins then it will be the biggest banking system in which there will be no entree of government or any banking organizations.

Bitcoin data mining - How does it work & from where it comes? How they make money bitcoin trading?

How a Bitcoin transaction works - The give-&-take takes place through the peer-to-peer technique that means the currency is exchanged from one computer to another. This give-&-take is made secured by thousands of peoples working through their computer networks. And those who keep an eye on this new bitcoin exchange or say a trade so that there shouldn't be any misuse & those who do it successfully get some bitcoins as a reward, and this is called as Bitcoin mining. And the peoples who work like bank clerk to verify this give & take happening through code language are called Bitcoin miners.

To complete this process of bitcoin currency trading, they have to solve a mathematical problem. The miner who resolves this issue in less time gets 12 & half bitcoins & in this way, the bitcoins come into the digital market. The whole process is created in such a way that after a stated period of time the no. of bitcoins gets reduced to half. In the beginning, 50 bitcoins were taken out from one block. After every 4 years, the no. of bitcoins per block gets reduced to half. Therefore after 125 years from now, i.e., till 2140, the creation of new bitcoins will be stopped. According to the calculation, till this time there will be 2,10,00,000 (2crore 10 lakh) bitcoins in the digital market & it will end in future one day. That's why the people are hurrying to buy this.

Blockchain

Everything is different in this world. Different countries, different people, cultures, food, etc. but the one thing that holds them all together is MONEY. It is required for all our needs. Everyone work for money. But have you ever thought that what it really is? As it is merely a piece of paper. It's nothing but a PROMISE that government has made. But when we deposit this money in the bank, it shows money on our account only by digits, but it doesn't actually exist there. The bank circulates this money all over as a part of an economy. Moreover, the fact is that, if 3% of the people withdraw their own money from the bank at the same time, then there will be no money in the banks because they have become a part of a big economy. The government & banks have control over this economy. If there is something wrong with banks/ government & it sinks then all your money will sink also. But Bitcoin is an attempt to remove this risk of banks & government.

Since the bitcoin currency trading is digital, the question is; can it be pirated like films? Then the answer is NO. It is not possible. And that is the specialty of this digital currency. Bitcoin is sent in blockchains divided into general public/people. The record of every bitcoin is kept in the blockchain. That means the details of every bitcoin transaction or a new bitcoin exchange happened in the world, anytime, anywhere, are always available in the blockchain. The users who keep an eye on this give & take and secure it are also rewarded with Bitcoin since every transaction is verified. Nobody knows how much dollars are there in the world, but the no. of bitcoins is fixed which are to be produced till the next 125 years.

The use of bitcoin is increasing in remittances areas. Remittances mean people working in another country sends money to their native country. Generally, these funds transfer happens through a bank or money transfer agencies. For doing this, they charge 5% - 30% fees. It works parallel to regular currency & its use is increasing. Many prominent companies in the world are accepting bitcoin currency trading for payment. You can use it to buy anything. Recently the government of India has stopped the old Rs.500 & Rs. 1000 notes & they have requested to exchange these notes with new ones. Therefore everybody is staying in line to exchange the notes, but the important thing to remember here is, if they could have bitcoin, then there was no need to be in line. So such a case doesn't exist with Bitcoin as there is no one who has to control it.

Bitcoins - Pros & Cons | Benefits and Risks | Advantages and Disadvantages

What's the point of bitcoin to use it for daily payments - There are considerably few benefits that make the Bitcoin a one of a kind digital currency differs from others. As we know, nothing is perfect, bitcoin currency trading does have its disadvantages and some risks of paying with Bitcoin, so Bitcoin is also not a perfect currency now. But it must have many advantages and benefits of paying with other than that of real coins which do not provide to its holders.

Because of the decentralization of the Bitcoin network, it is self-governing and free from government influence, sudden shutdowns, currency change, or global economic complexities. And it is the reason why bitcoin market graph is growing as the preferred currency for many countries and their users.

Advantages of Paying With Bitcoins

What makes Bitcoins so winning and why more and more users and businesses accepting this mode of the payment system? Below are the quick benefits of using Bitcoins.

1. You can buy things, book rooms in hotel electronically.
2. It's fast than bank & secure.
3. When we deposit money in the bank, it shows a balance on our account, but it's not actually there. Banks make use of it for their financial deals & if the bank sinks then all our money will sink. However, it's not the case with the bitcoin currency trading.
4. No fees/ commissions offered for transfer of money from one country to another. It is mostly used in the remittances field where people working in another country send money to their native country. Normally the transfer is done through banks or a third party like money transfer agencies. They offer fees from 5% - 30% for money transfer.
5. It keeps record through the internet so it can diminish the effect of black money & bring more transparency.

The Minor Disadvantages of Bitcoin

Along with these advantages, it has drawbacks. The benefits of becoming a member of the Bitcoin system are pretty useful. Despite this, it is not perfect and has few points with some negative signs that you need to be kept in your mind.

1. There is ups & downs in Bitcoin value as there is no one's control over it.
2. Many bad peoples are using it for illegal works & that is dangerous. Therefore the government or banks of every country are not in the mood to permit it.

Bottom Line

While you getting all about the Bitcoins and learning to pay all your deals with Bitcoins, I recommend you always check your bitcoin transactions even if you are dealing with a small amount or dealing with a larger trade. This guarantees you are pleased with the bitcoin system and stops you from any mistakes.

In the end, I would like to say once you have yourself a bitcoin & become part of the Bitcoin community don't forget to share your experience with us. Various users share their opinion that this bitcoin system is a new trend of financial and economical technology and choosing this new cryptocurrency as a daily deal payment option is nothing but brightening our future.