What is Bitcoin? How to get and earn Bitcoin?
What is Bitcoin?
Bitcoin is a modern digital currency, also called cryptocurrency, which can be exchanged for goods, items and services from merchants that accept bitcoin as payment. With Bitcoin cryptocurrency, owners can buy, sell and exchange goods, items or services without any intermediary from a central financial authority or bank.
Bitcoin is one of today’s most famous virtual currencies, whose value has skyrocketed since its launch in 2009. Satoshi Nakamoto, the alias of bitcoin’s creator, has stated that bitcoin is meant to be used as an electronic payment system that is based on cryptographic proof, not trust. Some holders buy Bitcoin as an investment, wanting it to rise in value, while individuals and businesses use or accept payments as currency. For example, many payment systems, such as PayPal, now support Bitcoin transactions, and a country like El Salvador has adopted Bitcoin as its currency.
Bitcoin transactions are made by digitally exchanging anonymous, heavily encrypted hash codes in a peer-to-peer network (P2P). The P2P network controls and verifies bitcoin transfers between users. Each user’s bitcoins are stored in a program called a digital wallet, which also stores all the addresses from which the user sends and receives bitcoins, as well as a private key known only to the user.
Bitcoin is controversial in many countries because it can be used to anonymously transfer illicit funds or hide unreported income from the IRS. Bitcoin policy now requires that transactions involving traditional, government-backed currencies be tied to an identifier.
By design, bitcoin’s creators limit the supply of BTC to 21 million coins, of which 18.77 million are already mined. This makes bitcoin scarce and curbs the inflation that could occur with an unlimited supply of the cryptocurrency.
How does Bitcoin work?
The Bitcoin cryptocurrency was created based on a distributed digital record called blockchain. Blockchain is like a type of public ledger, a digital system for recording transactions and related data in multiple locations at the same time. Blocks in blockchain are blocks containing data about each transaction, including the date, time, value, buyer and seller, and an identification code for each exchange.
Blockchain is designed in such a way that it is extremely difficult, if not impossible, to hack or tamper with the data stored in the system, making it secure and immutable. Each computer on the blockchain network has its own copy of the ledger to prevent single points of failure. If one block is changed, all other blocks in the distributed ledger must be changed. Blockchain is a decentralized technology, meaning it is not controlled by any one entity. In addition, identification codes make it difficult for fraudulent blockchain production.
How Blockchain works and types of wallets
Bitcoin is stored in a digital wallet application on your computer or smartphone. Cryptocurrency wallets are one of the best ways to keep bitcoin secure. There are also several types of wallets:
- Software wallets allow users to store bitcoin on a computer or cell phone for everyday use. Most Bitcoin needs to be stored in a separate standalone wallet. This protects most of the user’s BTC from malware trying to intercept the password used to access the wallet.
- Standalone wallets are wallet software that is installed on a USB or other secure drive or storage medium that is disconnected from the internet, allowing it to be physically secure. Hardware wallets, another type of standalone wallet, are physical devices, such as a flash drive, on which the user’s private keys are stored. Even when connected to another device, the private keys are never exposed because the signed transactions are performed on the device. Multi-signature wallets require two or more private keys to authorize transactions. This greatly reduces the likelihood of accessing the wallet if it is lost or stolen. One key is stored in a secure location as a backup, another is stored on the user’s mobile device, and a third key can be stored with the multi-signature provider.
Users can send Bitcoin to others by transferring bitcoins from wallet to wallet. Bitcoin can be sent by initiating a transfer request from a bitcoin address in a customer’s wallet to a bitcoin address or alphanumeric string in a merchant’s wallet. Sellers can choose the amount of the transfer in either bitcoins or local currency. There is a small fee for each bitcoin transaction, which is paid to the bitcoin miner. This fee can vary depending on factors, including how quickly the bitcoin transaction needs to be confirmed. The higher the transaction fee, the quicker the transaction will be confirmed.
Ways to earn and get Bitcoin
There are various ways to get and earn Bitcoin, which can be divided into paid and free. Paid methods include buying this cryptocurrency on exchanges, in various exchanges or from people.
There are also various ways to get bitcoin cryptocurrency for free, which we will talk about below:
- Cryptocurrency cranes or bitcoin cranes are specialized sites and services that allow users to earn some amounts of cryptocurrency in exchange for performing simple tasks, such as clicking a button, clicking on an ad, watching a short video, etc. Although these actions seem too simple, keep in mind that accumulating a significant amount of cryptocurrency can take some time with bitcoin cranes. Rewards go along with the difficulty of the task; the easier the task, the smaller the reward, and vice versa. One of the most popular bitcoin cranes is Freebitcoin, which allows you to earn up to $200 hourly just by clicking the button once an hour. This service also offers many different bonuses, including free lotteries and various prizes.
- Blockchain games. Play-to-earn (or P2E) crypto games involve earning cryptocurrency in some form by playing games. Typically, this is earning in-game currency by completing quests, winning battles, and other types of challenges. Also, many games allow you to get NFT-objects, which can be worth a lot of money, and selling them is not too difficult.
- Mining. Although mining is not suitable for everyone, it is a reliable way to get free Bitcoin. Simply put, mining is the process of creating new Bitcoins. In exchange for authenticating a Bitcoin public ledger, miners are rewarded with new Bitcoins. The process of verifying the authenticity of a ledger requires enormous computing power. It involves solving complex mathematical problems that only computing technology can do. Thus, at the cost of equipment and electricity, miners contribute to the accuracy of the Bitcoin network while creating and earning rewards in Bitcoin. You can mine on your own computers as well as on special devices that are created specifically for mining. The more powerful the mining device, the more and faster you will earn income.
Why is Bitcoin so valuable?
Bitcoin has a value similar to other currencies because other people are willing to exchange it for goods, services, and existing currencies. However, since bitcoin’s emergence in 2009, its price has risen, fallen, and risen exponentially again. Many consider these fluctuations to be volatile. In the stock market, the price has risen and fallen due to many factors, including companies accepting or withdrawing support for the currency and even what celebrities say about it.
Bitcoin’s value, however, is determined by other sources. For example, for a currency to be accepted, it must have a certain scarcity, divisibility, transportability, durability and must not be easily counterfeited. Bitcoin has the following traits:
- The number of BTC is limited to 21 million;
- It is divided up to eight decimal places. The smallest unit, satoshi, is equivalent to 0.00000001 bitcoin.
- Bitcoin is stored in digital wallets, making it easily transportable.
- Bitcoin has no physical form, so it cannot be destroyed. However, it can be compromised if the hardware, software or cryptographic key to the corresponding wallet is lost.
- Bitcoin is also protected from possible forgeries by blockchain and cryptographic keys.
But the main value of bitcoin is that its exchange rate is constantly growing, which is a great way to earn and store money.