What is Bitcoin?

by Franco on August 6, 2017

What is Bitcoin?

BTC, short for Bitcoin, is a decentralized virtual currency that was invented by Satoshi Nakamoto. The anonymous inventor or group published a white paper in 2008 as a proof of concept, then released it as open-source prototype software in 2009.

BITCOIN BASICS: How Does Bitcoin Work?

Bitcoin appears to be like “magic money” but it’s completely built by cryptography and mathematics. Bitcoin uses peer-to-peer technology to operate without a central authority or banking institution; managing transactions and issuing new BTC, also known as mining, is carried out collectively by the network. Bitcoin has many unique characteristics compared to traditional credit cards such as international payments, low transaction fees, irreversible transactions for merchants, and security through encryption.

BITCOIN MINING: How is Bitcoin Created?

Bitcoins are only created as a reward for proof of work involving cryptographic hashes called mining. Users offer their computing power to verify and record payments in to a public ledger, known as the blockchain. Bitcoin that is already mined is in circulation and can be exchanged for goods and services.

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There will only ever be 21 million bitcoins in existence, with the final fractions of bitcoin being redeemed by miners in the year 2140. If this great bitcoin experiment succeeds and people still use it after that point, BTC miners will be supported exclusively by numerous small transaction fees – which are required to let your transactions be included swiftly into the blockchain.

However, these coins can be divisible into smaller units, unlike regular currencies bitcoins are divisible by up to 10^8, which means that over time people will have the ability to use tiny little fractions of bitcoin to buy things. The smallest divisible unit of a bitcoin is aptly named a ‘Satoshi’.

How is Bitcoin Price Calculated?

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The price of bitcoin is determined by its supply and demand. When demand for bitcoin increases, the price increases, and when demand falls, the price falls. There is only a limited number of BTC in circulation and new bitcoins are created at a predictably diminished rate. Demand must follow this level of inflation to keep the price stable.

Why Do People Trust Bitcoin?

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Unlike centralized fiat payment systems, Bitcoin is fully open-source and decentralized. Transactions can be verified independently at any time. Bitcoin payments can be made instantly and directly without an intermediary.

The whole system is protected by a combination of elliptic curve cryptography and hashing on the sha256 curve. Together these mechanisms sufficiently provide large enough random key-space that cannot be attacked by hackers or gamed through mathematics.

Who Controls the Bitcoin Network?

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No organization or individual wields total control of the entire network. The Bitcoin network has no dependence on a central authority nor single administrator. Managing transactions and issuing new bitcoins are carried out collectively on the above mentioned blockchain.

The Bitcoin protocol itself cannot be modified without the cooperation of nearly all its users to aggregately run updated software.

What are the Characteristics that Make Bitcoin Different Than Conventional Money?

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Bitcoin has several features that make it different than government backed currencies:

** The very Decentralized nature of Bitcoin sets it above from conventional money that is issued by a central bank or federal agency.

** It is very easy to setup Bitcoin Software and Take Payments- Unlike a conventional bank account, you can set up a bitcoin address in seconds without any fees or documentation.

** The anonymous nature of Bitcoin sets it apart from conventional money. A bank account has links to your real name and other personally identifying information.

** Transparency on the blockchain makes it different to conventional money. All bitcoin transactions and newly issued bitcoins are recorded in public view and can be seen in real-time.

** Ease of transferring money- you can send and receive money anywhere in the world within minutes, as soon you broadcast the transaction, it gets confirmed and spread to the other peers within the network.

** You can choose your own fees while spending your bitcoin. Paying high transaction fees can encourage very fast conformation on the bitcoin network. However, Fees are unrelated to the amount transferred, so it’s possible to send 10,000 BTC with no fee, and just wait a bit longer for them to be confirmed (Up to three days.)

** Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This offers strong protection against identity theft compared to checks or credit cards.

How Can One Buy Bitcoin?

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The first step of bitcoin is to just buy it. “Investing” in bitcoin is extremely simple. All you have to do, for starters, is create a bitcoin wallet and buy some at an exchange like Coinbase.

NOTICE TO AFFILIATE MARKETERS: No matter which bitcoin affiliate marketing program you wish to join and promote, the very first thing you’ll be taught to do in order to buy the products or participate is to (1) Get a bitcoin wallet and, (2) Buy some bitcoin.

To do that, you’ll need to turn some of your cash into bitcoin.

The Two Steps to Buying Bitcoin for the First Time:

  1. Get a bitcoin wallet.
  2. Buy bitcoin.

That’s what I did when I bought bitcoin for the first time.

I created a free account at Coinbase.

I linked my Coinbase account to my regular bank account.

I clicked to buy some bitcoin and it was sent via “ACH” from my bank to my Coinbase bitcoin wallet.

Once you have your bitcoin in a bitcoin wallet, you get your bitcoin wallet ID. With your bitcoin wallet ID, it acts just like your email address in that anyone can send you bitcoin to your bitcoin wallet ID and you can send bitcoin from your bitcoin wallet ID to any other bitcoin wallet ID.

What is a Blockchain Wallet?

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Many people prefer to keep their bitcoin securely stored independent of any exchange like Coinbase. For that purpose, they create a free wallet at a site like Blockchain. Blockchain’s wallet is safe, secure and accessible from both your desktop and via smart phone app. I use blockchain wallet from my phone to send and receive bitcoin all the time. It’s my most convenient (and fast) way to receive commissions from affiliate programs that pay in bitcoin or to receive bitcoin sent to me from customers or any other person for any reason.

 

Bitcoin Affiliate Marketing: How to Use Affiliate Marketing to Accumulate Bitcoin

As a full time affiliate marketer online, one of the very first questions I had as I found out more about the cryptocurrency and bitcoin community is if there were any affiliate programs that were transacting in bitcoin and paying commissions in bitcoin.

I knew the bitcoin concept, as developers created platforms and tools to allow more people to transact and use it, would be a huge trend in the micro business niche of affiliate marketing and in the “home based online business” community.

I love bitcoin. I love affiliate marketing. I love trading cryptocurrencies. Here is the affiliate marketing program I use that  merged these all together. I use the service and trade alerts and I also promote it for referral commissions. All commissions are paid out in bitcoin direct to my bitcoin wallet. It’s a great way to accumulate bitcoin and only $50!

CryptoFundRaiser – Bitcoin Education. Learn how to trade cryptocurrency. Get real time trading alerts and chart reading education. Learn how professionals trade. Live member online events. Affiliate Program pays out with leverage for referrals and sales in bitcoin. I also use this simple program (no monthly fees) to merge our affiliate marketing skills and accumulate bitcoin.

Don’t like direct sales or affiliate “recruiting” programs? Here’s a way you can put your money and/or bitcoin to work for you:

BitConnectPassive Daily Income in Bitcoin. Bitcoin community with its own cryptocurrency, $BCC (bitconnect coin) which is used to transact all business inside program. Earn daily interest on loans you make to the company. They trade. They profit. They pay you daily interest on your loan. You also get your principle back in 299 days. BitConnect also has a simple affiliate program which is optional and not necessary to make money.

 

Click here to learn more about Bitconnect

BITCOIN BASICS: Cryptocurrency 101 for Beginners

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Click here to learn more about the basics of Bitcoin.

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