What is Bitcoin?
Bitcoin is a digital currency that was invented in 2009 by an unknown person or group. It is, however, still unclear who created the currency and what the true identity of Satoshi Nakamoto is.
This lack of identity has lead to many conspiracy theories about Bitcoin and its creator. This includes the possibility that it was created by a CIA agent.
The first thing you should know about Bitcoin is that it’s not like other currencies and there’s no centralized issuer like a government or bank behind it.
Bitcoin is a form of digital currency, created and held electronically. It does not exist as a physical form.
Bitcoin is a type of cryptocurrency, which is an encrypted digital currency that uses complex mathematical equations to verify and secure each bitcoin transaction.
Bitcoin was created by an anonymous programmer or group of programmers under the name Satoshi Nakamoto and released as open-source software in 2009.
Bitcoin mining refers to the process by which transactions are verified and added to the public ledger, known as blockchain, and also the means through which new bitcoin are released. Anyone can become a bitcoin miner by running software with specialized hardware.
# How Bitcoin Mining Works
# What Is Bitcoin Mining For
Bitcoin mining is the process of adding transaction records to Bitcoin’s public ledger called the blockchain. This process is done as a competitive challenge and as a reward for security providers. Bitcoin mining uses cryptographic hash functions to generate new Bitcoins and to verify transactions.
The process of mining bitcoin mines involves solving equations that are computationally expensive and time-consuming. Mining can be done on any computer but it requires specialized hardware such as an ASIC (application-specific integrated circuit) and a high power consumption due to its use of computing power.
Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the blockchain.
If we want to know what bitcoin mining is or how it works, we should not start with what bitcoin is. Instead, it would be better if we started with why people would want to mine bitcoins in the first place.
Bitcoin mining is the process of adding transaction records to Bitcoin’s public ledger, known as the blockchain. Bitcoin miners also confirm transactions by including them in a new block that is then broadcast to other nodes
Whenever someone sends money (creates a transaction) and their send is truthful, there’s a hash created. A hash is like a secret word that you can only remember if you combine a few other words you always know. By combining some of the information about a recently solved math problem and some information about the current transaction, you can ensure that no one can fake our transaction again – not even yourself. Each transaction is contained within some notes about that recently solved math problem – these notes are called “blocks”.
When we hash the blocks and the transactions together, it creates a chain with links that are impossible to replace without going back and doing all of the math problems again and convincing all of the other people that your new, replacement work is the real work. This is virtually impossible, so transactions and blocks are not able to be faked or undone.
When someone new wants to join in so that they can use the money, too, they request a copy of all of the notes — the blockchain — and thus have their own copy of the public ledger. They can look at everyone’s transactions and add their own to the mix, as long as they adhere to the rules we’ve all agreed on.
If they want to get some money to spend for themselves, they can try to solve math problems (mining), exchange some valuable item to someone already in the group in exchange for some money (exchanges or stores), or do something to help someone in the group so that they can earn the money, like mowing their lawn or cleaning their room.
It used to be really easy to do the math problems, but it’s getting harder and harder daily. Soon, the amount given to someone when they solve a problem will halve! They’ll get only 25 coins instead of 50 coins. There are some good reasons behind this, but they’re a little hard to explain to a five year old. So, people are looking to buy into the group’s money or do something in exchange for money they can spend within the group.
How I explained Bitcoin to my kids, in a basic way.
A currency needs two things: to be easily transportable, and to be rare. Bitcoin is easily transportable because you can send it from computer to computer, and rare because to make more you have to solve increasingly hard math problems.
Thus Bitcoin can be used as a store of value, or as a currency.
Best Sites To Purchase Bitcoin in The UK
Binance, why binance you ask?
They cheapest place to buy Bitcoin on the market directly with your debit card is Binance, it has much lower card fees compared to coinbase and others.
The trading fee for Binance is 0.10 %, while with Coinbase its up to 3.99% !
So if at some point you want to trade you Bitcoin for an alt coin which you would like, for example ADA, DOGE etc
Then binance is the best place on the market with the cheapest fees.
Binance is beginner friendly and I will go step by step for you, how to buy your first amount of Bitcoin.
So to conclude Binance is cheaper, has more alt coins to trade into as it is bigger than coinbase, plus it is very easy to get started.
Step 1: Create your account on Binance
Once you click through the link to register on Binance you will see an image below on your screen.
In this guide we are looking to buy Bitcoin, and the cheapest way to do it on the market, and we have just made a binance account.
Once you have registered you are done with this step and ready to move on.
Step 2: Verify Your Binance Account
Next up you just need to verify your account, once you have yourself an account.
To do this go into the email account and confirm the confirmation email that you have recieved.
I would reccomend setting up KYC on your account once you are inside it, and logged in.
This will give you added protection and safety against scammers.
So make sure you give a working mobile number, so that when you log in, transfer money there will be a confirmation text with a code!
Its very important, to do this, plus also make sure you use the name that is on your ID because you may need to at some point upload your ID to increase your limits if you want to deposit and buy more.
Step 3: Buy the Bitcoin Directly From Binance
In this last step all we have to do is either use your debit card or to do a bank deposit, in this guide we are going to go with the debit card as its simple and quick to get started.
In the homepage on the platform, click on buy crypto, then like the image below like on credit/debit card.
So click on it and you will be going to this next page
Now with your debit card just choose the amount you want to spend, and you and use any fiat currency, but since this guide is UK based you can select to use GBP and its as simple as that.
Just choose the amount and press continue, and it is like buying something from any online shop at this point.
All done you have just bought bitcoin, at one the cheapest rates available.
Why Buy Bitcoin?
Digital. Real. Estate.
It’s permissionless, immutable digital money. Wanna send $50m to someone in Egypt? Done. No filling out forms, no wire transfer fees, no multi-day wait for the money transfer.
On top of the sharp technical advantage bitcoin has over fiat, it’s finite supply creates a “number go up” dynamic. As more and more private and institutional hodlers keep adding to their BTC positions, that growing demand (without many sellers) eventually causes prices to surge. Greyscale alone buys most, if not all of the BTC that is mined each day.
But why buy BTC?
- Because you want to buy something over the Internet, and not use a credit card, for example
- Because you have savings, and you don’t want them to be:
- Hyperinflated until they’re worthless
- Confiscated by kleptocratic government
- Nailed down to a particular country
- Because you work in one country, but need to send money “home” to another
- Because you understand Bitcoin, what it actually is, the basics of how it works, and the reasons it was invented (the fatal flaws found in flimsy fiat currency systems). Because of your understanding you know that in the long term, the price of Bitcoin is going up, up, up and so that makes it a good investment for you
Why is Bitcoin even valuable?
- Bitcoin has the highest liquidity, making it one of the best cryptocurrency to buy for beginners. In other words – you will have no trouble buying or selling BTC – there will always be someone to match your order in the foreseeable future.
- Transparency – if you like your funds not to be easily controlled by governments, banks, or companies, BTC is right for you. Things like inflation, an unknown quantity of printed money, etc.
- Potential profits – yes, it’s a bit questionable, but the facts are there. It is a great opportunity to make some funds.
- Scarcity – there will only ever be mined 21 million Bitcoins altogether. No more. This is one of the permanent rules. So the value here could go really high, but the opposite could be true as well.
- Digital Gold – Bitcoin is very desirable and scarce and since it is an uncorrelated asset class your portfolio is better hedged to be a safer way of finding alpha
- Insurance – If your bank account or credit cards get lost or stolen or account is frozen Bitcoin is a great alternative to store value
- Censorship Resistance– You can make donations to organizations like defense distributed or wikileaks even if their payment processors and banks are shutoff due to unethical political pressure
- Sovereignty – As a Business you can accept value even if you are deplatformed or banned from banking
- Micro transactions microtxs are simply not possible with fiat , where you can do so with my BTC lightning wallet
- Security SSS and multisig with CLTV and other scripts allow for novel methods to secure ones wealth
- Privacy with electronic fiat you have no privacy unlike with Bitcoin transactions where you am given a choice between privacy or transparency with each wallet
- Global You can travel the world , rent hotels and buy plane tickets and withdraw local currency easily without fears of credit card fraud. You can send payments to employees in foreign countries easily
- Interesting and fun It is fascinating mixture of technology, game theory, security, mathematics, politics, and economics that never bores me