A virtual currency
Bitcoin is a virtual currency, which was released in 2008 by the anonymous programmer or group of programmers under the name of Satoshi Nakamoto. Bitcoins are therefore electronic, and therefore are not produced in physical form like DKK, Euro and USD.
Bitcoin is the first well-functioning example of what is called cryptocurrency.
Cryptocurrency is a digital asset that can be used as a means of money exchange. To ensure that these exchanges are secure and can not be hacked, cryptography is used. After the creation of Bitcoin as the first working digital cryptovaluta, there have been many different crypto currencies. Here you can see a list of cryptos.
Click here to view the list of cryptos
One of Bitcoin's most unique factors, compared to conventional currencies, is that Bitcoin is decentralized. Decentralized means that there is no state, bank or other organization that controls Bitcoin. You have 100% control over your Bitcoins.
Bitcoin is based on a peer-to-peer system, and transfers of Bitcoins between two people are therefore conducted directly. There is no bank or other entity to verify the transaction and make sure it is completed. The transactions are verified in the system and listed in the public ledger, which is called blockchain.
What is blockchain?
Bitcoins blockchain ensures that you keep track of all Bitcoin transactions. All Bitcoin transactions will therefore be registered in the block chain. The block chain is thus a distributed database, which independently ensures that the ownership chain of any Bitcoin amount is verified. The block chain is used to keep track of when a specific Bitcoin amount has been used, so it is not possible for it to be used twice. This avoids the famous double-spending problem. Double-spending is one of the challenges that succeeded in solving Satoshi Nakamoto with the creation of the Bitcoin system, based on the block chain. Double-spending is a challenge with digital currencies because they consist of digital files and these digital files can be copied. And as Bitcoin is decentralized, there is no third party to verify that a specific amount has been used. The problem with double-spending is that it devalues the currency so it's less worth compared to other currencies. In addition, the currency credibility will disappear completely. So to avoid double-spending, the block chain ensures that all transactions are kept track. If someone should try to trick the system by duplicating the digital files that Bitcoins consists of, then the block chain will be able to detect if an amount is attempted to be transferred more than once.
What can you use your Bitcoins for?
In the future, more dealers will undoubtedly begin to accept Bitcoin as a means of payment in line with the increasing level of knowledge. Bitcoin is more prevalent as a means of payment in, for example, China and the United States, where several businesses and businesses accept Bitcoins as a means of payment. In addition to using Bitcoins as a means of payment (currently limited), you can also use Bitcoins to store your assets. Many believe that Bitcoins has potential for major price increases, which means that you can see it as an investment at the same time. However, you should be aware that Bitcoin has a history of history that has had large fluctuations. So if you choose to invest in Bitcoins you should be able to handle any fluctuations that may arise without panic.
How do you transfer Bitcoins?
Would you like to send Bitcoins from your wallet to another wallet, then it can happen quite simply. The same applies if you want to pay with Bitcoins in a business or webshop.
When you need to transfer Bitcoins, it happens that you transfer bitcoins from one address (your) to another Bitcoin address (friend / business / your purse number 2).
A Bitcoin address is a long unique text consisting of upper and lowercase letters and numbers. We strongly recommend that you never enter this address manually, but instead copy it and press paste. This will prevent you from pressing something wrong. If you enter a Bitcoin address incorrectly, you risk that the amount will never reach the right recipient. The amount will therefore be lost forever and impossible to get back.
For example, a Bitcoin address may look like this: 4CLbr3LbPzoGMjbb5rySKxUtSNBukzOmd2
Do you want to send 1 Bitcoin to the above Bitcoin address, just log into your Bitcoin wallet and insert the above address that you have copied, enter the amount 1 Bitcoin and press send. As simple as that.
You also have the opportunity to scan QR codes with your mobile wallet, and thus quickly and easily transfer or pay a certain amount of Bitcoins to a friend or business.
Before you read more about Bitcoin, you might ask yourself "What is Bitcoin?". I hope that I've helped you get a better understanding of Bitcoin.