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What is Bitcoin? Things to know about Bitcoin

The cryptocurrencies market is flourishing like anything. The reason for this is:

  • A steady supply of Initial Coin Offerings
  • A rising number of funds that trade cryptocurrencies
  • A sustained interest of investors from all over the world

Though cryptocurrency market is booming all over the world still majority of us lack knowledge and are wary to jump into this. In this article, we will try to list out as many facts as possible which will answer the majority of questions people have in their mind.

What is Bitcoin?

Bitcoin is the first example of cryptocurrency. A cryptocurrency is a form of digital money where encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds without a regulating authority. 

Bitcoin was first introduced in 2009 by the mysterious mister Santoshi Nakamoto (true identity of the person is yet to be verified). Bitcoin is the worlds first digital decentralized currency and payment network. The system is peer to peer without any intermediary such as a bank.

Why would one use Bitcoin?

The answer to this is: As a global digital currency you can send bitcoin to anyone, anywhere in the world without worrying about cross-border remittance fees. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms. Moreover, you can spend bitcoins to buy goods and services all over the world. A growing number of businesses / Service providers are gradually accepting payments in Bitcoins.

How to get started with Bitcoin?

The process has 3 simple step:

Step 1: Download the Bitcoin Wallet: A Bitcoin Wallet is an app or a software program that allows you to send, receive, and store Bitcoins. You will have a unique address which you can share in order to receive Bitcoin from others. Many Bitcoin wallets require you to upload Pan Card and Bank details before you could use the service.

Step 2: Add Bitcoin to your wallet: Bitcoin wallet providers also offer a trading platform to buy or sell Bitcoin. So, in short, wallet providers act as an exchange for Bitcoin. You can buy the account from the funds present in your Bank account or credit card.

Step 3: Ready to use: Once you have the Bitcoin in your wallet, you are ready to send to anyone or ready to buy good and services across the world with minimal fees. One need not to worry about cross-border remittance fees.

Presently, a few big names that accept Bitcoins include :

  • Overstock.com
  • Expedia
  • WordPress
  • Newegg (an online retailer of items including computer hardware and consumer electronics)
  • Save the children
  • Microsoft (One can buy content on Xbox using Bitcoin)
  • Reddit
  • Dell etc.

Is buying Bitcoin legal in India?

The Government of India has neither declared Bitcoin transactions legal or illegal. However, the RBI always reminds the users of Bitcoin regarding the associated risks. Since there is no intermediary under all this transaction so any user, holder, investor, trader, etc dealing with Virtual currencies will be doing so at their own risk.

Risks associated with Bitcoin?

  • It is very volatile than any other type of asset
  • It is not owned by anyone means you cant hold responsible if any unfortunate mishap happens
  • Fake Wallet provides and exchanges are growing a lot and this will be huge risk for any novice
  • It’s not a full proof currency because it still in its infant stage
  • The trading of drugs and weapons are also happening in Bitcoin
  • Fear of getting hacked

Trustworthy Bitcoin Wallet providers:

  1. Unocoin Bitcoin Wallet
  2. ZEBPAY
  3. CoinSecure
  4. Coinbase
  5. Blockchain Bitcoin Wallet (I will be discussing in detail about these wallet providers in my next article)

 

Things to know about Bitcoin:

  • Noone owns the Bitcoin network
  • There are more than 900 cryptocurrencies available over the internet. Among them, Bitcoin is the largest blockchain network and number one in terms of market capitalization. It’s become the de facto standard for cryptocurrencies
  • According to research there are approximately 6 million users using cryptocurrency wallet, majority using Bitcoin
  • As of August 2017, there were around 16.5 million Bitcoins in circulation
  • The 1 Bitcoin price (as on 27.11.2017) is around 715000 INR. But you do not have to buy an entire Bitcoin. It can be divided into small parts. The smallest divisible Bitcoin amount is the hundred millionth and is called a “Satoshi”, named after the founder.
  • Bitcoin transaction happens in Bitcoin wallet. Anyone can see how many Bitcoins are held on a particular address but no one will be able to find out who owns that address
  • A Bitcoin address is a long string of 27-34 numbers and letters that works like an email address
  • Bitcoins transactions cannot be reversed or refunded. One should only deal with business or people one trusts
  • Over the past few years, despite the lack of regulations in the Indian digital currency industry, a few Bitcoin exchanges have sprung up and started operating with self-regulated trading platforms with strict KYC and anti-money laundering systems in place. Example: Unicoin, Zebpay, and Coinsecure etc.