WHAT IS BITCOIN?
Bitcoin is a digital currency you can use for personal transactions or business at high speed and low cost.
WHY USE BITCOIN?
Bitcoin is a digital currency that is designed for global commerce in the modern age, with the ease of a credit card but without the high fees. By taking advantage of Internet as rails for the fast and friction-less, value can be transferred for cents. Any amount, from $1 to $5,000,000 costs cents to transfer.
Bitcoin can be used at the same value anywhere in the world where Bitcoins are authorized, thus becoming the first truly global currency. Not only can you send your bitcoins worldwide, but also use it as a method of payment globally for any stores or vendors that accept bitcoin as a form of payment.
The nature of Bitcoin means that, compared to other financial tools, your identity is safer from theft. Your level of privacy is up to you and your discretion. Bitcoin has no central point to target because it is a decentralized network of nodes working together, which is why the bitcoin network has not been successfully hacked thus far.
WHERE IS IT HEADED?
Since its creation, Bitcoin has evolved from a mathematical proof of concept to a rapidly expanding economy worth billions of dollars. Bitcoin is now being used in transactions between millions of people and thousands of businesses around the world and will only increase in volume. Bitcoin is headed to worldwide adoption and financial revolution.
Bitcoin’s usefulness spans many categories. In it’s simplest form it’s a digital currency, but the system itself is what allows people around the world to conduct trade quickly and at low cost. This is because all of the expensive infrastructure that financial institutions need is replaced by outsourcing that power to the Bitcoin network.
Because of its ease and low cost, Bitcoin has now grown in acceptance as a medium of exchange. Bitcoin’s inherent value is in its speed, low cost, and security features. While still in its infancy, Bitcoin can already be used to buy everything from a cup of coffee to a vacation package, and low fees make it more economical than using a credit card processor.
One of the biggest hurdles in international travel is changing currency and then losing out on exchange rates and processing fees. With Bitcoin growing around the world, it’s becoming a more viable way to travel without even carrying cash. The more shops and services that accept Bitcoin, the more we can focus on the travel experience itself, and save money as well.
WHO CREATED IT?
On October 21, 2008 a developer named Satoshi Nakamoto published the Bitcoin Protocol which outlined the theory of a decentralized currency. This was followed in January 2009 by the release of the open-source Bitcoin software, and the mining of the first Bitcoins.
HOW BITCOIN WORKS
Most currencies are created and controlled by a central authority that ultimately has power over prices. Bitcoin is decentralized and generated through open-source software, so the system is transparent, priced on the free market, and belongs to no one person or organization.
Financial systems take a lot of power to run. With Bitcoin, individuals and groups willing to dedicate computer processing power to support the network are rewarded with Bitcoins. This process is known as mining, and it’s how every Bitcoin comes into existence.
All newly mined Bitcoins, along with every transaction, are publicly recorded and verified through the network. This record is known as the Blockchain and is one of the features that helps keep the system secure from fraud and abuse. Bitcoins cannot be duplicated or forged.
HOW IS IT CREATED?
All newly mined Bitcoins, along with every transaction, are publicly recorded. This record is known as the blockchain. While the blockchain records transaction details, it does not record any personal identifying information about the senders or recipients. The blockchain is a critical feature to maintain the transparency of the Bitcoin system, and make counterfeiting or double spending impossible.
There are several ways to store and manage your Bitcoins. An online web wallet is an easy way to get started with storing Bitcoin, and more and more wallets are offering the ability to buy Bitcoin in your local currency.
You can acquire Bitcoins by buying or trading for them from local vendors like SecuraCoin Agents, or accepting them for your business instead of cash or credit. There are also Bitcoin ATMs now becoming available.
Bitcoin connects you to people all around the world to buy and sell Bitcoins. Exchanges offer both a web wallet for storage and management, with deposits taking a few days to settle.
There are a range of ways to acquire bitcoins, which vary from country to country. Exchanges, brokers, ATMs and individuals all offer bitcoins for sale or trade. Services are out there where you can find people to trade with for fees from 7%-25% or more. In the countries where they are authorized, exchanges have a more involved registration process, but make buying and selling easier. Once your identity has been verified, you can send funds from your real world bank account to your exchange of choice, and then buy/sell at your convenience. The downside is you do not see your deposits reflected in your accounts for a few days, and there have been exchanges closing with customer funds lost.
A wallet is where you send, receive, and store your Bitcoins. A web wallet is like having an account you can manage through a third party (such as an exchange), and a local wallet is like storing your funds at home in a safe (or under the mattress).
In the real world, your unique wallet ID is a string of digits that may look like this:
You can use a wallet shortener to make your wallet address easier to use, or even generate a QR code that can be easily scanned.
Desktop wallets are the most private after printed offline storage methods, as they store your bitcoins on your own computer and allow you to control the security level. However, that also means that you need to install software than can take up a lot space since you always have to download and update the Blockchain as it updates itself.
Web wallets hold the Blockchain information so you don’t have to, are easy to use for transactions, and are a way to keep your Bitcoins in another location for safety. They are, however, less private, and it is best to use services with security features such as Yubikeys and Google Authenticator to protect your account.
BITCOIN USAGE TIPS
VOLATILITY: The price of bitcoin can be volatile as the economy is still in its infancy.
IRREVERSIBLE: Much like cash, Bitcoin payments are irreversible.
SECURITY: It is very important with Bitcoin to use all methods available to protect your wallets and accounts.
PSEUDONYMITY: Bitcoin is not “anonymous” as all transactions are stored publicly and permanently, but your identity remains private until you chose to reveal it during an exchange (pseudoanonymity).
TAXES: Bitcoins are taxable since most governments consider anything with value to be subject to taxes, though this is typically only after you sell your Bitcoins (capital gains).
Much has been said about the buying and selling of Bitcoins, but how else can they be used? Here are some easy ways to use your Bitcoin:
BUY & SELL: To buy and sell goods and services from a growing number of websites, visit online retailers and brick and mortar business that accept bitcoin payments.
TRADE: Trade with people from most countries around the world anytime, anywhere.
SEND FUNDS: Send funds to friends or family in most countries in the world without incurring big fees or exchange rates.
SPECULATE: For the bolder among us, you can speculate on Bitcoin prices.