by Susan Paige
If you are a beginner in Bitcoin or any other cryptocurrency and want to learn more about it, you have come to the right place. There are thousands of detailed guides on the web that will tell you each and every detail about the currency, like Bitcoinsentralen, but what we are doing here is summing things up for you.
So, let’s get started.
What is Bitcoin?
Bitcoin is a kind of digital money that you can store, exchange, and make payments with, similar to simple money. Apart from it being a digital currency, a key difference between Bitcoin and normal currency is that Bitcoin is decentralized and an opt-in currency.
It means that unlike fiat money that is issued by central banks of the state, consequently making citizens forced to use the money of the state to make payments, Bitcoin is controlled by the will or “consensus” of its users, who may or may not choose to make payments with it.
It is a headless system without intermediaries that gives controls in the hands of the people globally. No banks, government, or financial institutions are going to monitor the transactions you are making with Bitcoin.
Why is Bitcoin Valuable?
So the big question is: If Bitcoin is decentralized with no intermediaries controlling it, what gives it value.
Well, there are two reasons why Bitcoin has value. One, a large group of people collectively agree that it has a value. And two, people find it useful to store and exchange.
Historically, people have used basically everything as money before the currency was actually invented, but the most valuable form of money is gold. Why? Because people have collectively agreed on gold’s rarity, value, durability, and visibility.
Bitcoin is similar to gold in nature. Just like gold, it has a limited supply, it is divisible, and it’s durable. Moreover, Bitcoin has other features that are just what people need in the current era, which are ease of sending and receiving and ability to verify its authenticity.
What is a Bitcoin Wallet and How Do You Create One?
A Bitcoin wallet is a tool for Bitcoin holders to interact with the Bitcoin network. A wallet allows you to buy, sell, send, receive Bitcoin. A Bitcoin wallet can be easily created just by downloading an app and registering yourself.
How to Buy and Sell Bitcoin?
There are applications that allow you store, buy, sell, send, receive, and trade Bitcoin with people. Bitcoin Wallet is one such app. And Bitcoin.com is a website that allows you to buy and sell Bitcoin.
To send Bitcoin, all you have to do is choose the amount you want to send and send it to the receiver’s Bitcoin address. In order to receive Bitcoin, you just have to provide the sender with your Bitcoin address.
What is Bitcoin Exchange and How Does it Work?
A Bitcoin exchange is the procedure of trading Bitcoin against the local currencies, such as the US dollar. Exchange also allows you to trade your Bitcoin for other goods and services and other cryptocurrencies, like Ethereum.
You can either trade your Bitcoin with other peers or to a large centralized exchange service, which is similar to a stock account.
What is a Bitcoin Debit Card?
Bitcoin debit cards are a convenient way to store and spend your Bitcoin. Bitcoin debit cards, also known as crypto debit cards, act like simple prepaid cards, except they can be loaded with Bitcoin or any other cryptocurrency and can be used to make online and in-store purchases from dealers and merchants that don’t accept cryptocurrencies.
These debit cards, when you purchase something, would deduct a fiat currency equivalent from your Bitcoin amount and transfer it to a seller’s account.
These cards can also be used at Bitcoin ATMs to exchange the amount of Bitcoin for the fiat currency.
What Are Tax Implications of Bitcoin?
Tax implications vary from country to country and region to region. Whether you are only investing in Bitcoin or using it as a payment method against goods and services, you need to be aware of the tax laws in your region.
Some regions have laws that exempt the users from tax implications, others have tax laws that monitor every transaction.
So, that was all the basics you needed to know to understand what Bitcoin is and how it works. Now, you can make an informed decision.