How Bitcoin Works


Bitcoins are a decentralized form of cryptocurrency. This means that they are not regulated by the government financial or institution. With Bitcoin, you don’t need a traditional bank with a long list of paperwork such as an ID just for you to establish what’s known as a bitcoin wallet. This bitcoin wallet is used to access your bitcoins and bitcoins to other people.

How To Create An Account

You can get a bitcoin wallet from a bitcoin broker such as Blockchain or Coinbase. Anytime you create a wallet through a certified broker; you will be given a bitcoin address which consists of a series of letters and numbers.


How Bitcoin Work As An Anonymous Payment Processor

You can do three things with bitcoins. You can send money, make a purchase or use it as an investment. A lot of merchants are now accepting bitcoins as a mode of payment. When making use of bitcoins instead of cash, you are simply making your purchase anonymously. This is also the same as sending money because you do not have to submit a mountain of payment before you establish a bitcoin anonymous. With bitcoin, you can send money to someone else anonymously.

How Bitcoin Work As An Investment

Bitcoin prices fluctuate from time to time. A clear example of fluctuation in the price of bitcoin was during the start of 2013 when the average price of a bitcoin was approximately $400, but as the year gradually rounds up, bitcoin price rose to over $1000. This implies that if you had two bitcoins worth $800 at the start of 2013 and you kept it as an investment by the end of 2013, the two bitcoins would have been more than $2000 instead of $800. A lot of people store bitcoins because they believe the coin will one day rise to an unexpected value as it is today.

Bitcoin Casino and Poker Sites

Because of the anonymity of bitcoin, a lot of gambling sites has taken up bitcoin as a payment method. Both bitcoin poker sites and bitcoin casinos are coming to life and offering their players to play with bitcoin, make deposits and withdraw directly to their bitcoin wallet. With this, there is no problem with taxes and governments will have absolutely no control. A very good example of this is the regular Nevada casino where all your transactions are anonymous and there is no need for you to register anywhere.

How To Send Bitcoin

For you to send payments to individuals or make payments online, you need your bitcoin address, your private key, and the receiver’s bitcoin address. Through your bitcoin wallet, you will put three pieces of information, which include: input, balance and output. The Input refers to your address, balance refers to the total amount of bitcoins you want to send and the output is the recipient’s address.

How to Buy Bitcoins?

Purchasing this coin is quite simple. If you are interested in bitcoin, then you must know how to buy some bitcoins too. Most people think that it is quite difficult to deal with bitcoins, but the truth is that getting bitcoins is very easy and simple. This process is even easier and simpler than opening a bank account.

You need to learn how to use the wallet software for you to purchase bitcoins successfully. During this process, you will have to learn how to receive and send money so that you can actually buy bitcoins. The first thing to do is to get a wallet. You can get a wallet by registering yourself with any exchange that hosts a wallet. After you’ve learned all the processes involved and now a professional on your own, you will need more wallets. It is best to have a wallet on your personal PC in order to understand bitcoins because some experimental exchanges will be involved.

One of the popular methods of buying bitcoins is to purchase them from an exchange. A lot of websites are in the business of exchanging bitcoins for cash or bank transfer. Most of these exchanges do not actually sell the bitcoins themselves. Some actually pair a bitcoin seller with a buyer. They make sure the transaction is smooth and might at times ask you to provide some personal information before the exchange can actually take place.


You can also get bitcoin when you mine. The bitcoins that exist today were mined through the Bitcoin Mining Network. Mining involves a very high risk, it’s difficulty increases with time and it becomes almost impossible for people to make profits.

That’s not all about bitcoin. The coin can also be purchased from a private broker. You can buy bitcoins from brokers but this comes with some drawbacks. This type of exchange is going to be anonymous because you don’t even have any information about the broker except for his wallet address. But you’ll still have to make the transaction. This type of transaction is a risk of getting ripped off if the bitcoin exchanges disappear. You might end up losing all your coin.