What is Bitcoin (BTC)? Beginner’s Guide to Bitcoin (BTC)

Bitcoin (BTC) – the first decentralized cryptocurrency – is one of the earliest applications of Blockchain technology.

Bitcoin was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its control code was released as open-source software. In the whitepaper of BTC, the creator only mentioned the word “Bitcoin” twice, because the name is not the most important, but the overall concept.

Units of bitcoin (BTC)

The unit of account of the bitcoin system is a bitcoin. Ticker symbols used to represent bitcoin are BTC and XBT. Small amounts of bitcoin used as alternative units are millibitcoin (mBTC), and satoshi (sat). Named in homage to bitcoin’s creator, a satoshi is the smallest amount within bitcoin representing 0.00000001bitcoins, one hundred millionth of a bitcoin. A millibitcoin equals 0.001 bitcoins; one thousandth of a bitcoin or 100,000 satoshis.

The Basics of Bitcoin

Based on Blockchain technology

It can be said Bitcoin and altcoins are applications of Blockchain technology. 

A blockchain is, in the simplest of terms, a time-stamped series of immutable record of data that is managed by cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain).

So, what is so special about it and why are we saying that it has industry disrupting capabilities?

The blockchain network has no central authority — it is the very definition of a democratized system. Since it is a shared and immutable ledger, the information in it is open for anyone and everyone to see. Hence, anything that is built on the blockchain is by its very nature transparent and everyone involved is accountable for their actions.

Bitcoin blockchain is what makes it possible for us to transact with one another. The network uses distributed consensus to verify and confirm transactions, and consensus is reached via a large global network of high-performance computers (called miners) running the bitcoin software.

Whenever someone sends a transaction it is broadcast instantly to the network and verified by the miners. Miners are constantly working to confirm individual transactions and include them in the next block of transactions in the chain. Once a new block is verified, all the transactions within it are permanently recorded on the blockchain. Rewards are paid out in bitcoin to miners who confirm transactions and verify the next block as a way to incentivize productivity on the network.

Each party who participates in the mining process has an identical up-to-date copy of the blockchain or public ledger, which is a record of all the transactions in bitcoin history. Each party’s copy of the ledger is updated every time a new block is found. (Blockchain.com)

Lightning Network

Currently, each block on the Bitcoin blockchain is able to contain 1 MB of data (Bitcoin Block size: 1 MB). This means that there is a limit to how many transactions can fit in Bitcoin’s blocks. However, this limits the ability of Bitcoin to handle transactions, increasing transaction fees and reducing transaction processing speed.

On August 24, 2017, Segregated Witness (SegWit) was activated. This is a premise for the Lightning Network.

Why do Bitcoins have value?

In recent years, BTC has made great strides. In the spring of 2013, Bitcoin’s value doubled after the Cyprus’s banking crisis.

People began to worry that their money would not be safe at banks, and decided to convert their money to BTC.

When investors from China and other countries realized the potential of this cryptocurrency, its value increased from 100 USD/BTC to 1,200 USD/BTC.

Bitcoin has a fixed supply of 21 million Bitcoins (BTC), which protects it from inflation since its value will increase with greater demand and velocity, because of its scarcity. People can invest in Bitcoin. This will bring benefits to the economy and society. Bitcoin will disrupting money, change the role of government, the way people plan for the future. There were times, the value of 1 BTC reached $19,000.

Decentralised

One of Satoshi Nakamoto’s main objectives when creating Bitcoin was the network’s independence from any governing authorities. It is designed so that every person, business, as well as every machine involved in mining and transaction verification, becomes part of a vast network. Moreover, even if some part of the network goes down, the money will keep moving.

Anonymous

These days banks know virtually everything about their clients: credit history, addresses, phone numbers, spending habits and so on. It is all very different with Bitcoin, as the wallet doesn’t have to be linked to any personally identifying information. And while some people just simply don’t want their finances to be governed and tracked by any kind of an authority, others might argue that drug trade, terrorism and other illegal and dangerous activities will thrive in this relative anonymity.

Transparent

The anonymity of Bitcoin is only relative, as every single BTC transaction that ever happened is stored in the Blockchain. In theory, If your wallet address was publicly used, anyone can tell how much money is in it by carefully studying the blockchain ledger. However, tracing a particular Bitcoin address to a person is still nearly impossible.

Those who wish to stay anonymous with their transactions can take measures to stay under the radar. There are certain types of wallets that prioritise opaqueness and security, but the simplest measure would be to use multiple addresses and not transfer massive amounts of money to a single wallet.

Fast

The Bitcoin network processes payments almost instantaneously, it normally takes just a few minutes for someone on the other side of the world to receive the money, while normal bank transfers can take several days.

Non-repudiable

Once you send your Bitcoins to someone, there is no way of getting them back, unless the recipient would want to send them back to you. This ensures the reception of a payment, meaning that whoever you’re trading with can’t scam you by claiming that they never got the money.

(CoinTelegraph)

Pros

Freedom

BTC was designed with freedom in mind. Most importantly, freedom from governing authorities controlling the transactions, imposing fees and being in charge of people’s money. When it comes to buying things, cryptocurrency became just as legitimate as fiat currency in recent years, and considering the existence of numerous deep-web markets that only accept Bitcoins, you may be able to buy some things easier with BTC than with any other currency.

High portability

One of the distinct characteristics of money is portability, meaning it should be easy to carry and use. Since Bitcoin is completely digital, practically any sum of money can be carried on a flash drive, or even stored online.

Cryptocurrencies give people freedom to send and receive money with just a scan of a QR-code or a click of an online wallet. It takes little to no time, there are no outrageous fees and the money goes from person to person without any unnecessary intermediates; all you need is Internet access.

Choose your own commission

Another indisputable advantage of the Bitcoin network is a possibility of choosing the transaction fee amount, or choosing not to pay it at all. The transaction fee is received by the miner, after a new block is generated with a successful hash. Usually, the sender pays the full fee, while deducting this fee from the recipient could be considered an incomplete payment.

Transaction fees are completely voluntary and they serve as an incentive for the miners to make sure that the particular transaction will be included in the new block being generated. This incentive also works as an income source for the miners, often bringing them more money than the traditional mining would have, especially considering that the mining activity will stop completely in the future, when the limit of Bitcoins will be reached.

Thus, the cryptocurrency market asks users to chose between the cost and the waiting time. Higher transaction fee would mean quicker processing, while users without any time constraints can save money.

No PCI

PCI stands for Payment Card Industry and it denotes the debit, credit, prepaid, e-purse, ATM and POS cards and associated businesses. It consists of all the organisations that store, process and transmit cardholder data, there are strict security regulations in place and most major card brands are part of it.

While unified rules and regulations can be good for big companies, they might not be taking every person’s needs into consideration. When using Bitcoin, there is no need to comply with PCI standards, which can allow users to branch out into new markets, where credit cards are not available or the fraud levels are unacceptably high.

As a result, users get lower commissions, an opportunity to expand their markets and lower their administrative expenses.

Safety and Control

Bitcoin users are able to control their transactions; no one can withdraw money from your account without you knowing and agreeing to it, like sometimes happens with other ways of payment, and no one can steal your pay information from merchants.

BTC users can also protect their money with backup copies and encryption. Moreover, their identities and personal information are always protected, as none of it needs to be disclosed to make a payment.

Transparent and neutral

Every single transaction as well as every single bit of information about it is always available for everyone in the Blockchain, which can be checked and used in real time. The BTC protocol is encrypted, hence why no human being or an organisation can control or manipulate it. The network is decentralised, so no one will ever fully control it. This is why Bitcoin is always going to be neutral, transparent and predictable.

It can’t be counterfeited

One of the most popular ways of counterfeiting in the digital world is using the same money twice, rendering both transactions fraudulent. It is called a ‘double spend’. To counter this, Bitcoin, just like most other cryptocurrencies, uses Blockchain technology as well as the various consensus mechanisms built into all BTC algorithms.

Cons

Legal questions

Bitcoin’s legal status varies drastically from country to country. In some countries the use and trade of BTC is encouraged, while in others it is banned and outlawed.

There has been a lot of concerns regarding Bitcoin’s appeal to criminals, some news outlets have even stated that its popularity rests entirely on the ability to spend it on illegal goods. Indeed, when the infamous web black market Silk Road was shut down, Bitcoin instantly decreased in value (wired.com).

Level of recognition

Bitcoin is recognised and is perfectly legal in a lot of countries, however some of the world’s governments still don’t have any regulations regarding BTC, while others have outright banned it.

The majority of businesses, no matter how big or small, are still completely oblivious to it. It is nearly impossible to abandon all other currencies and start using BTC exclusively.

Lost keys

A key is a unique alphanumeric password necessary to access a Bitcoin wallet. Losing that key essentially means losing your wallet. However, most current wallets have backup and restore mechanisms, but obviously the user needs to set them up before being able to use them.

Volatility

The price of Bitcoins has had its ups and downs, going through various cycles of skyrocketing and plummeting, referred to by some as bubbles and busts. Throughout its history BTC has been conquering new heights, only to sustain a massive drop straight after. Its value is unpredictable, it changes rapidly and drastically, which can cause significant financial damage to an imprudent investor.

Continuous development

The future of Bitcoin is rather unclear. Currently, governments and banks are not able to control BTC, it’s almost unregulated. However, the bigger and more popular it gets, the more world governments will try to take it under control. A regulated and governed Bitcoin would be an entirely different sort of currency.

(CoinTelegraph)

Criteria when choosing a Bitcoin Wallet

Not only BTC but other crypto wallets also need the following factors to ensure the security and good for users.

  • Private key: Defined as a password for you to login to your crypto wallet. And of course, make sure that only you know your private key.
  • Easy to use: Has a friendly interface, especially fast speed.
  • Development community: There is an active development community and long-term support.
  • Backup and security: This is a necessary function when customers want to protect their accounts better and more flexible.
  • Compatibility: The wallet must be programmed to be compatible with the current popular operating systems such as Windows, Linux, mac, Android, iOs.

Make sure the crypto wallet you choose meets the above criteria before selecting. If it does not meet the above requirements, you should consider more carefully.

The best Bitcoin wallets

There are 2 types of crypto wallet used to store cryptocurrency: cold wallet and hot wallet. We will rely on this classification to list the best Bitcoin wallets for you.

  • Hot wallet: Binance, Bittrex, Poloniex, Kraken, Bitfinex, Coinbase.com, Blockchain.com, Tiktakbtc, Exodus, BitBay, BitcoinCore, etc.
  • Cold wallet: BitAdress (Paper Wallet), Ledger Nano S, Trezor và KeepKey, etc.

Go to the Tiktakbtc website: https://tiktakbtc.net/en/ and click Login on the top right side.

If you do not have an account at Tiktakbtc, please enter this link: How to Register and Update the account information at Tiktakbtc

1. Deposit

Step 1: Click Wallet, click Deposit or you can click DEPOSIT button (green button)

Step 2: Choose Bitcoin(BTC)

Step 3: You are going to see your address. You can copy your address or scan QR code to send the amount of bitcoin from others to your wallet at Tiktakbtc.

2. Withdraw

Step 1: Click Wallet, click Withdraw or you can click WITHDRAW button (yellow button)

Step 2: Choose Bitcoin (BTC)

Step 3: Insert properly the information about: your addressquantityfee (you can freely choose levels of fee: medium fee or high fee. If you choose high fee, your transaction will be processed more quickly.

After all, click WITHDRAW.

There is a withdrawal notification, insert Google Authenticator code (or not), then click WITHDRAW.

3. Buy

Step 1: Click Exchange, click Buy/Sell

Step 2: Choose BTC/VNDT

Step 3: Enter the number of BTC that you want to purchase. Then, click CONTINUE.

There is a confirmation. You will confirm and enter Google Authenticator (or not), then click Buy to finish.

4. Sell

Step 1: Click Exchange, click Buy/Sell

Step 2: Choose BTC/VNDT

Step 3: Enter the number of BTC that you want to sell and then you click CONTINUE.

There is a confirmation. You will confirm and enter Google Authenticator (or not), then click Sell to finish.

If you have any questions in using services of Tiktakbtc, please feel free to contact with us through: https://support.tiktakbtc.net/We are already to support you anytime.

Good luck!

The article is still being developed by Tiktakbtc in order to provide customers with the best information!

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