What exactly is Bitcoin?
Simply Cryptocurrency #2
Before I decide to dig into Bitcoin, let me give a definition of what cryptocurrency is. According to Investopedia, cryptocurrency is "a digital or virtual currency that uses cryptography (programming/coding) for security."hence, it is virtual (intangible). The security required in cryptocurrency is important, as it keeps hackers from having to create counterfeit funds. One can simply refer to cryprocurrency as "computer-money." The most successful cryptocurrency project to date available to public is.......... yep...........you most certainly guessed it right, "Bitcoin".
Just like any other currency e.g (Rand, Dollar, Pound) Bitcoin is just another currency and what makes it so special, is that it is the first "decentralized" cryptocurrency
- What does this "decentralized" mean?
Decentralized in this case means that there is no government controlling the Bitcoin network, but it is rather "kept-alive" by Bitcoin users. It further means that, e.g there is no physical building that one can report to, should there be any issue whatsoever. There are though, public campaigns made by the Bitcoin community that can assist individuals with any issue they face, with one of them called Bitcoin Talk
As I have mentioned in my previous article, as Rand is to Cent and Dollar is to Penny, Bitcoin is to Satoshi. With Bitcoin though, 100,000,000 (100 million) Satoshi makes one Bitcoin. Units of Bitcoin are different (weird) when compared with our traditional money.
1 Satoshi -------> 0.00000001 ฿
1,000,000 Satoshi -------> 0.01000000 ฿
100,000,000 Satoshi -------> 1.00000000 ฿ -------> 1฿
1฿ with "Luno" exchange to ZAR is around R14.164 (2017/02/14)
NB: You do not have to buy one full Bitcoin.
- Cool, let us say that "I want in", what can I do to join?
You should get a "wallet". A wallet is can be obtained as software which keeps your Bitcoins. There are Bitcoin wallets for Windows, iOS, Linux and Android. There are also companies that open a wallet for you, such as Luno (formerly Bit X), Ice 3x, Coinbase, Blockchain and more. A clear definition by Investopedia defines a Bitcoin wallet as a "software program where Bitcoins are stored. To be technically accurate, Bitcoins are not stored anywhere; there is a private key (secret number) for every Bitcoin address that is saved in the Bitcoin wallet of the person who owns the balance."
A typical wallet looks like: 17JVsjVfnabRD7h2s2iJRjsH1JzM6RGdev (my Bitcoin wallet, donate if you can)
Weird? maybe. A wallet can also be stored onto your computer via a Bitcoin Wallet programme, which is not bad, unless your computer crashes, then it is a problem.
I use Luno as it is linked with my bank account and I cannot really complain about them, although, I had not converted my funds from Bitcoin back to ZAR, as there are many things that I have done with Bitcoin (I will take you onto my past EXPERIENCES as I release more articles).
- Why would I want to get Bitcoin?
What makes Bitcoin an interesting venture is the growth rate in which it experiences overtime (it is although volatile), making it a risky, but rewarding investment. According to the past, the below graph shows such growth, although, personally, it needs patience, especially with financial analysis predicting a great future with Bitcoin. I will also introduce Bitcoin trading over sometime and I will also be reviewing trading platforms. Bitcoin has the potential to save us from the uncertain future of the South African Rand (ZAR)
Image by exchangeconversions.com
Below is a graphical representation as to why I have a massive interest in Bitcoin, I mean pictures are worth 1000 words right?
Link to Bitcoinzar.co.za for extra exciting info based on Bitcoin in South Africa
Just like any other venture, NEVER risk more than what you are prepared to lose. Next Article (SimplyCryptocurrency #3) will be an extension of this article and will also touch on the origin of Bitcoin.
Sthumacher Experience
About Sthumacher Experience:
He is just a young student keeping his fellow South Africans in mind of global events. He believes that anything he keeps his mind to computer related, he can do. He is not a “programming-geek” or anything like that though, but he is aiming for legendary, to become a 21st century renaissance man. “I am learning myself, let all my work be more of like a joint venture for all of us. Information should be as easy as possible for all of us to understand. let us enjoy the EXPERIENCE”
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