Understanding Bitcoin: A Beginner’s Guide

C: express.co.uk
C: express.co.uk

I first encountered the word bitcoin when I was surfing online for an online job in 2014 and I came across a website in the internet. It was not that clear then how it really works. All I knew is that I can use this program to collect Satoshis (the smallest unit of the bitcoin cryptocurrency) which can later on be converted to cash. Skeptical as I was, the curiosity pushed me to try it. After weeks of collecting, I finally received my first payout. It wasn’t that big, but it was real money. Nevertheless, it proved bitcoin was legit.

Bitcoin has come a long way and in a span of a few years, the value of it has skyrocketed and turned people into digital millionaires. But how does it really work?

Definition of Terms

Bitcoin (BTC) – is a form of digital currency created by a certain Satoshi Nakamoto in 2009 to provide an electronic payment system where users can transfer funds instantly with low transaction fees.

Satoshi – is the smallest unit of the bitcoin currency (0.00000001 BTC) and named after the creator of Bitcoin.

Bitcoin Wallet – this is a software program where Bitcoins can be stored. Think of it as a physical wallet but digital. Users need to register to be able to be given a Bitcoin Wallet address that one can use to receive and send bitcoins.

Blockchain – it is an incorruptible, decentralized digital ledger for all cryptcourrency transactions.

Bitcoin Faucets – These are websites or applications offering satoshis as reward for completing a certain task.

Cryptocurrency – it is a form of digital money wherein mathematical theories and in-depth computer knowledge was applied and encrypted to secure vital information, communications and money digitally. A popular example is the bitcoin, etherium and litecoin.

Cryptocurrency trading – Similar to the Stock Market, cryptocurrencies can also be traded and converted to US Dollars and vice versa.

The Evolution of Bitcoin

When Satoshi Nakamoto invented Bitcoin, he never intended to make a digital currency. He invented the program with the concept of a Peer-to-Peer Electronic Cash System eliminating the need for a middleman and lowering transaction fees. Building the decentralized digital cash system gave birth to cryptocurrencies. As people take notice of this brilliant system, trading followed. From its original value of $1 to 1 Bitcoin (BTC) in 2011, its worth is now a whopping $10,833 as of this writing. It even reached a peak of $19,000 last December 2017. The success of bitcoin influenced the proliferation of new cryptocurrencies such as Etherium, Litecoins and many more.

Obtaining Bitcoins

Collecting bitcoin starts with the registration for a bitcoin wallet. Searching the internet may yield hundreds in results but do take note to always check for legitimacy of the website before signing up. In the Philippines, the first financial service platform for bitcoin is the Coins.ph. Upon registration, users should verify the needed information and submit Identification cards for approval. When approved, one can now use the system to either send or receive bitcoins and avail services such as paying bills and buying load in an instant.

As mentioned above, one can obtain bitcoins through collecting Satoshis online. Several websites and mobile applications reward users with a certain amount of Satoshis after completing a task. Payout request can be made when they reach the minimum payout set by the company. But since this is just free, patience is a must since time is the investment in collecting. Waiting time for claiming varies from 5 minutes to an hour.

One can also buy bitcoin by depositing money to your Coins.ph account and converting it to bitcoin. Once converted, the amount invested may change depending on the value on the Bitcoin market. If you are a risk-taker and would like to try cryptocurrency trading, look for legitimate bitcoin trading platforms that offer sensible returns.

Tips

When venturing into the world of bitcoin, it is advisable to read up on how the system fully works, its upsides and its downsides. Preferably, start small and invest only what you can afford to lose. Bitcoin is a good income generating program when played right. But the risk of losing some or maybe all of your money is also possible. Always double or triple check when joining websites due to the proliferation of scam sites that offers a hundred percent or more returns per day. Not only will your money vanish, but the possibility of hacking your vital information is probable. Again, invest only what you can afford to lose.

Sheryl Ann Datukon

Nurse. Breastfeeding mom. Writer. Loves to travel and do photography. One who simply lives life to the fullest.