To finish your confusion about the bitcoin, I’ll explain bitcoin briefly and efficiently.
What is bitcoin? Bitcoin is a digital or virtual currency. It’s not like our local bank’s currency which is stored physically in the bank’s safe.
So, it means that bitcoin isn’t some sort of paper money?
Yes, correct! It’s not paper money and it’s not being controlled by bank or the government. It’s decentralized which means it’s not owned/controlled by someone specific.
As I said that it’s not controlled by someone, so how does it works? And who verify or manage the transaction which occur through bitcoin?
Before we further go into topic make sure you understand the following.
or watch the complete video (Recommended) below.
You will learn the following in this article:
- What is Bitcoin?
- How bitcoin works?
- What is bitcoin mining?
- What is bitcoin wallet?
- and much more!
How bitcoin works?
It’s a good question, let me answer: So bitcoin transactions are transparent and cannot be traced by anyone.
The Next Question: Bitcoin is verified by a group of CPU power which run a free software and that process is known as mining.
What is bitcoin mining?
You must have heard about mining? If not, mining is a simple process in which a computer is being run by a software which verifies all these transactions occurring using bitcoin.
But why would someone run their computer for free to verify bitcoin transaction?
The plain answer to the question is that one who mines bitcoin get rewarded in form of bitcoins to their bitcoin wallet.
What is bitcoin wallet?
Now let’s talk about bitcoin wallet, it’s not like your traditional wallet which can be kept in your pocket. Instead it is a digital string which stores all your coins.
The string looks something like this: 327WYfUiZmNnxiJnoUgv8DRkr9QwMRJsRp
If you want someone to send money to your bitcoin wallet, you have to send them this address. You will get this address once you create bitcoin wallet.
You can create bitcoin wallet in Pakistan and bitcoin wallet in India. To get better understanding watch the above video about making bitcoin account in Pakistan.
With Bitcoin wallet you can send and receive money with lower fees than local banks. Bitcoin is held in digital form and are not printed like dollar and rupees and other currencies which are used by traditional banks.
Who founded bitcoin? Idea behind bitcoin.
Bitcoin was formed in 2008, as the idea which was presented by it’s so called founder “Satoshi Nakamoto”. He’s not verified and he is a software developer and here what Google tell us about the founder of bitcoin.
As you see, his information and identity haven’t been verified yet. His birth date and place has a small tag of being (claimed).
So, from where Mr.Satoshi Nakamoto idea of bitcoin came?
I found this whitepaper of him in PDF on the internet and I’ll share the whitepaper (PDF File) with you which shows the idea Satoshi Nakamoto related to bitcoin.
Download the PDF Bitcoin Founder White Paper here.
At the end of the article, I add some keynotes which you can remember to have better understanding about bitcoin. And I also want tell you that even if bitcoin transactions are not traceable, Law enforcement has found various methods to identity the sender and receiver of bitcoin.
Is bitcoin legal in Pakistan? If no, why it’s banned.
Although bitcoin is legal in many countries but unfortunately bitcoin is banned in some area such as Pakistan. It’s banned because it may cause money laundering as it can be traced by anyone.
If you have more questions about bitcoin, I’ll list few topics and you can watch videos on my YouTube channel to get more knowledge about bitcoin.
- Buying of Bitcoin
- Selling of Bitcoin
- Mining of Bitcoin
- Bitcoin & Block-chain
How bitcoin value works?
I know you must have one last question about How bitcoin is valued?
So, it’s not like our traditional central bank which can issue as much currency as they need.
Bitcoin is digital and can’t be lost as it’s not paper money.
And Bitcoin cannot be manipulated by central banks which the consumer has to bear the cost as the value decreases.
The supply of bitcoin is controlled by algorithm. And every hour tickle of bitcoin is produced until it reach it’s limit which is 21 (twenty one) million. And this makes bitcoin an interesting asset to keep. If bitcoin demand increase and the supply remain same the value of bitcoin increases.
So, if a bitcoin which buys bitcoin in huge amount and gets to keep it and still some other companies are looking to buy more bitcoin the value of the bitcoin increases.
- Bitcoin’s early launch was in 2008 while officially it was launched in 2009.
- The idea behind bitcoin was from the whitepaper issued by Satoshi Nakamoto.
- Bitcoin is not like paper money, it’s digital money.
- Bitcoin’s value changes with the increase or decrease in supply and demand.
- It was the first Cryptocurrency which raise and other Alt-coin were emerged from bitcoin.