what is bitcoin

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What is Bitcoin? Is it legal in India? How to earn Bitcoin?

In this article we will learn what is Bitcoin, how does it work? If you look at its images, it looks like a golden coin. Most people who do not know about cryptocurrency consider it a golden coin. But this is not the case at all, Bitcoin is a kind of digital currency as opposed to a traditional currency. Which does not have any physical form. That is, it is only used on the Internet.

Just as a rupee is worth 1. Bitcoin also has its own value. Overall, it is also a kind of currency. But there is a lot of difference between common currency and Bitcoin which we will go into in detail. Under this, we will understand what is bitcoin? How does it work? And how to buy bitcoins. Let’s first understand what is bitcoin?

What is Bitcoin?

Bitcoin is a form of electronic cash, called cryptocurrency. It is electronically created on a computer. That is, Bitcoin has no physical existence like a note or a dollar, but rather it is stored online in the Bitcoin wallet. That is why it is also called virtual currency.

Like the common currency, it is not operated by any bank or government but is a decentralized digital currency. For example, when you conduct a transaction from account A to account B, then an intermediate (bank or government) is needed to make that transaction successful.

This does not happen in the context of bitcoin, rather it uses peer-to-peer technology. That is, all the members on the network are connected to each other so that no middleman is needed while conducting the transaction. So BTC is completely open-source, everyone can use it.

Its transactions are verified by network nodes through cryptography. After that, the details of those transactions are stored in a decentralized ledger system called Blockchain. This whole process is defined as Bitcoin Mining.

Miners who do this mining process receive Bitcoin as a reward. In this way, new bitcoin comes into the market. It is a fixed asset i.e. only 21 million bitcoin can be created and 80% of it has been mined so far. We can exchange it with other currencies, products, and services.

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Who created Bitcoin and why?

Bitcoin was released in 2009 by a person named Satoshi Nakamoto. However, the identity verification of the person of this name has not been done yet. There is also news that it can be a group of people and not just a person. But a question that must arise in your mind is why this was created?

This mystery arises when you look at a proposal published by Santoshi Nakamoto. Its title is as follows, the complete information about bitcoin is given under the post “Bitcoin: A Peer-to-Peer Electronic Cash System”. In one of its paragraphs, the purpose behind creating Bitcoin seems to be.

He has written that the basic problem with conventional currency is that we have to depend on the banking system for it. They also believe that our money on banks is not completely safe and they cheat us a lot in the name of the scheme. If we look at history, this is also true. Many such incidents have happened.

What is the value of 1 Bitcoin?

The value of 1 BTC (it is the nickname of bitcoin) is currently ₹ 6,00,482.87, equivalent to about six lakh Indian rupees. However, its value fluctuates continuously. In December 2017, it touched its highest price ever – ₹ 1,259,942. Maybe, your question is who determines the value of Bitcoin?

There are many factors behind influencing the value of bitcoin. The most prominent among them is the supply and demand for BTC. The higher it is, the more its price will increase. It is also dependent on the cost incurred in the mining process to some extent. Apart from this, there are many factors that determine the price of 1 BTC.

How to invest in bitcoin

Anyone who is interested in cryptocurrency can start investing in Bitcoin. However, it is not so easy for a common man. Investing in BTC means buying it and making a profit by selling it when its price is high. But you must be thinking that the price is very high.

It is not necessary that you buy 1 BTC directly. You can also purchase its smallest units. Just as there are 100 paise in a rupee, similarly 100 million Santoshi make one BTC. So you can buy these small units gradually and make a BTC.

There are several things an investor needs in order to start investing in bitcoin:

  • To get your KYC verified, submit a PAN card and valid address proof for this.
  • Select Bitcoin Wallet. These are the software that helps you store and sell Bitcoin. Zebpay, UnoCoin, and Coinbase are the best BTC wallet.
  • After choosing one of the Wallets, you have to create your account by signing up in them so that you can use them.
  • Connect your wallet to a bank account, debit card, or credit card.
  • Finally, you purchase Bitcoin. You can start it by buying a small unit of this.

One thing that you have to keep in mind is that it is a risky investment. So get as much information about it as possible. If you do not want to take a big risk, then invest in its small units. Use such cryptocurrency exchange that is more secure.

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What is Bitcoin Mining?

This is the process by which new bitcoins are generated. Understand this, when you conduct its transactions, it is the work of verified bitcoin miners. Although there can be no one but many miners for mining. The BTC is given as a reward, which will first add the record of that transaction to the Bitcoins public ledger (Blockchain).

Bitcoin Mining is done by some specialized computers. Miners use their computing power to verify those transactions. Mining is an important process, not only to generate new bitcoin but also the bitcoin network remains secure.

How to do bitcoin mining?

It is often heard that people are earning crores through bitcoin mining. The matter is true but this process is not easy at all because for this you need many resources which are quite expensive. That is, it does not work for a common individual. Let us still tell you how to do bitcoin mining.

  • To start Bitcoin mining you will need Bitcoin mining hardware. However, earlier this work was possible by computer CPU or high-speed video processor card. But today it is not possible.
  • In this process, power consumption is more than you think. So if you want to do bitcoin mining then this process consumes more electricity.
  • After the uppers step, you have to download the special program for BTC mining. For example, CGMiner, BitMinter, and BFGMiner are the most famous.
  • Now you have to join the Bitcoin mining pool. This is a group of BTC miners who work to solve a block and share its rewards among themselves.
  • In the end, you will have to set a BTC wallet where you will get a unique address so that you will be able to get the bitcoin received in reward.

Is Bitcoin legal?

Yes, Bitcoin is legal in India at the moment. In April 2018, the Reserve Bank of India had banned cryptocurrency trading. That is, at that time no Indian banks or other financial institutions provided any kind of facility on these virtual currencies. However, in most developed countries there was a ban on cryptocurrency then.

How does it work

As we learned, this is a digital currency that exists only online. With this, it is decentralized, that is, nobody owns it. So how does it work? Understand that gold is an asset, just like BTC is also a digital asset that has its own value. We store it in the Bitcoin wallet.

Using this wallet, we can buy and sell BTC. Each wallet has a public key and a private key. The public key is that unique address with the help of which you receive BTC. The private key acts as a digital signature.

Whenever you send bitcoins, computer nodes with the help of this private key verify that transaction. Just like when you sign a deposit or sending money to the bank. Miners work from here. The process and verify each BTC transaction and add them to a block. We call it a public ledger.

After this, the miners publish that block in the BTC network. This connects the transaction with the previous blocks in the blockchain. In return for mining, those miners receive some BTC as a reward. The new bitcoin market comes in this way.

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Bitcoin Future

Those who invest in cryptocurrency are often worried about its future. This is because it is not a fixed asset, its value constantly changes. BTC is also a cryptocurrency, which uses an advanced encryption technique called cryptography.

Seeing its value growth, it seems that in the coming times, digital currencies will replace today’s conventional currencies. But sometimes it seems that it will not last long. So what is the answer to this confusion? If you listen to economic analytics, then they say there will be a big change in crypto soon.

That is because it has many features that can benefit everyone. If working on its drawbacks and making it more secure. Which makes it easy for people to use it. So definitely its future is better.

Conclusion

In this article you learned what is Bitcoin, how does it work? Under which we gave you complete information about this. By reading this post, you can understand it well, you can learn to invest in it. If you are interested in finance, then it is more important for you. Also, we should not forget that BTC is an unpredictable and unstable currency, that is, it is a high-risk asset.

So hopefully, from this post, you must have learned a lot. If there is any question or suggestion related to it, please tell in the comment. Finally, if the post is informative, then share it with your colleagues on social media like Facebook, Twitter, Instagram.

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