Bitcoin, the now infamous cryptocurrency, has defied doomsayers to continue its meteoric rise in value. By the time of writing this article, 1 Bitcoin is equivalent to $10,630.
Here is what Bitcoin is all about and how to use it.
What it is
Bitcoin is a virtual currency that can be used to make online, and now offline, purchases. Initially it was mostly associated with the Dark Web; where it was used to purchase drugs, weapons and other contraband.
Nonetheless, it broke into the mainstream tech world in 2013 and can now be used to make legal purchases.
As it continues to grow in popularity, we are now seeing Bitcoin being used to make purchases in offline stores as well.
Stores in some countries such as China are now accepting payment in terms of Bitcoin. In South Korea, the largest underground mall has partnered with a local cryptocurrency exchange to enable stores accept Bitcoin.
How to acquire and use Bitcoins
Before you can acquire Bitcoins, you will need to sign up with wallet software such as My Wallet or Coinbase. You can then acquire Bitcoins by trading money, goods and services with people who have them or through mining.
Mining involves getting rewarded with a small part of a Bitcoin for running complex software used to perform mathematical equations.
You can use your Bitcoins to buy, say a virtual game. Once you make the purchase request, information regarding the transaction is sent to miners on the Bitcoin network.
The miners then use software to run computations to solve a puzzle derived from combining data from recent transactions.
Once a miner finds the unique number that unlocks the puzzle, he bundles the transaction to a confirmed batch called a block.
This process is meant to prevent a user from spending the same Bitcoin again, more like you wouldn’t be able to spend a physical coin again after using it to make a purchase.
The information from Bitcoin transactions is contained in an incorruptible digital ledger known as the blockchain.
The blockchain is duplicated thousands of times on a network of numerous computers; hence cannot be controlled by a single individual.
Information on the blockchain is updated across the network in real-time. This means it cannot fail and hackers cannot manipulate it.
Most people are still sceptical over Bitcoin, with others terming its meteoric rise a bubble.
Whether a bubble or not, Bitcoin won’t be going anywhere soon, given banks are now acknowledging cryptocurrencies and more stores are accepting them as payment.
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