How Does Bitcoin Actually Works and How to Make It?
If you have been a bit active on the internet lately, there is no chance you have not heard the term Bitcoin or BTC here and there. Especially that Bitcoin's value has insanely increased in these last few years, it even reached one kilogram of gold's price, and it is expected to even surpass it. Some famous people such as Elon Musk and his company Tesla invested great amounts of money in Bitcoin. Since the richest person in the world (Elon Musk) spent millions on something virtual, you make sure that it is A THING. So what made them do such things? and why is Bitcoin getting all this attention? and what exactly is Bitcoin and how can I make it?
What is Bitcoin? According to the official Bitcoin website, Bitcoin is an innovative payment network and a new kind of money. Bitcoin is often described as a cryptocurrency, a digital currency; there are no physical Bitcoins, it is virtual.Bitcoin is a type of cryptocurrency. They are only kept as some balances kept on a public ledger that everyone has transparent access to. Bitcoins are totally independent of any type of bank or government, and their transactions are verified by a massive amount of computing power. Bitcoin got very popular, it is the most popular cryptocurrency now, and that has triggered the hundreds of other cryptocurrencies to launch, collectively referred to as Altcoins. Bitcoin is commonly abbreviated as "BTC."
The Bitcoin system is a collection of computers that all run Bitcoin's code and store its blockchain. We can say that a blockchain is a collection of blocks and in each block of them, there is a collection of transactions. Since all computers that are running the blockchain contain the same list of blocks and transactions, and can transparently see these new blocks get filled with new bitcoin transactions. Therefore, no one can cheat on this system.Balances of bitcoin tokens are saved using "keys", whether public or private. which are some very long strings of numbers and letters linked using the mathematical encryption algorithm that was used to create them. The public key is to serve the address that is published to the world and where others may send Bitcoins. However, the other key, the private key, is used to be hidden like a secret and only used to authorize Bitcoin transmissions. However, Bitcoin keys should not be confused with a bitcoin wallet, which is a digital or physical device that facilitates the trading of Bitcoin and allows users ownership of coins.
Introduction
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What is Bitcoin? According to the official Bitcoin website, Bitcoin is an innovative payment network and a new kind of money. Bitcoin is often described as a cryptocurrency, a digital currency; there are no physical Bitcoins, it is virtual.Bitcoin is a type of cryptocurrency. They are only kept as some balances kept on a public ledger that everyone has transparent access to. Bitcoins are totally independent of any type of bank or government, and their transactions are verified by a massive amount of computing power. Bitcoin got very popular, it is the most popular cryptocurrency now, and that has triggered the hundreds of other cryptocurrencies to launch, collectively referred to as Altcoins. Bitcoin is commonly abbreviated as "BTC."
The Bitcoin system is a collection of computers that all run Bitcoin's code and store its blockchain. We can say that a blockchain is a collection of blocks and in each block of them, there is a collection of transactions. Since all computers that are running the blockchain contain the same list of blocks and transactions, and can transparently see these new blocks get filled with new bitcoin transactions. Therefore, no one can cheat on this system.Balances of bitcoin tokens are saved using "keys", whether public or private. which are some very long strings of numbers and letters linked using the mathematical encryption algorithm that was used to create them. The public key is to serve the address that is published to the world and where others may send Bitcoins. However, the other key, the private key, is used to be hidden like a secret and only used to authorize Bitcoin transmissions. However, Bitcoin keys should not be confused with a bitcoin wallet, which is a digital or physical device that facilitates the trading of Bitcoin and allows users ownership of coins.How can someone acquire Bitcoins?
There are several ways to get bitcoins, and the following are the most must-know ways:
- Mining:
- Buying and holding:
Buying and holding Bitcoin is also called HODLing. It is one of the most direct and most beginner-friendly trading strategies. You have to get a Bitcoin wallet, buy BTC and wait for the price to go up.
- Trading:
BTC trading is taking advantage of Bitcoin’s highly volatile nature. This method needs a lot of practice and knowledge of the market.
You can trade using these styles :
- Day trading: is basically short and quick trades, trying to get small but fast profits. The method consists of carefully analyzing the market, finding small money-making opportunities, and trade for a small profit. Day traders can make a significant cumulative gain.
- Swing trading: Swing traders will buy Bitcoin when it is cheap, wait long enough until the BTC price raises up, and then sell it. But, their waiting time is not as long as a "hodler" and is not as short as a day trader.
- Arbitrage: Bitcoin arbitrage is similar to what is above. However, instead of looking for money-making opportunities within the same exchange, those who use arbitrage look for opportunities across different platforms. They do buy Bitcoin from an exchange 'A' then sell it at an exchange 'B' for a price that is higher.
