What is Cryptocurrency?

How Does Bitcoin Work? – A Short Guide

While the personality of founder Satoshi Nakamoto continues to be covered in mystery, his blockchain technology and crypto coin have taken the world by storm. Their legacy is here to stay. Everybody is talking about them but many have troubles comprehending how does Bitcoin work. The truth is that it is a very complex mechanism, driven by sophisticated programming and coding.

The first cryptocurrency is generated via a process called crypto mining. Other Altcoins have also adopted scrypt mining which is a little bit different. But let’s focus on the main technology behind crypto tokens for now.

Miners are usually computer geeks with highly-advanced technical skills. The main task is to solve mathematical puzzles and equations. In the beginning, they had to do this manually but specifically-designed hardware started doing it instead of humans as the years progressed.

People who acquire Bitcoins via crypto mining invest mainly in software, hardware, and electricity bills. In fact, many have switched from it to crypto trading as the latter can prove to be much more remunerative.

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Whenever a particular number of math equations is solved, a new block is formed, generating a unit of the crypto coin. Everyone who participated in the process receives a fraction of the token as a reward for the job that they have done. This is called the proof-of-work method.

Did You Know?

Official statistics show that about 1,000 people own 40% of the Bitcoins that are currently in circulation. This number will most likely increase in the future. The bitcoin millionaires are between 35 and 200, as one of the youngest is Erik Finman, 19 year old, with over $4.4 millions. Bitcoin trading will become more and more remunerative as its limited supply nears exhaustion so start investing now!

The Most Important Thing in Bitcoin Trading – Crypto Wallets

Every experienced Bitcoin advisor will tell users how crucial it is for one to open a secure and safe Bitcoin wallet. They are not like real-life wallets whose intention is to store paper exchanges and the respective coins that go along with them. Crypto wallets function on a whole different level.

The actual cryptocurrency is not stored along with them. Just the private keys that give its owner the right to transfer or exchange it. The public address is the exact digital location of the Bitcoin wallet. Users send the number of crypto coins that they wish to it and the receiver can do whatever he deems necessary with them.

The most important thing is to not let anyone else know of the private key. Losing it or having it stolen means that the individual can no longer control what happens with the crypto tokens he or she has acquired. It is best to keep it secret even from everyone that is not a relative or loved one.

Digital transactions from one crypto wallet to the other are not the everyday transfer of funds that one might imagine. It is more like a transfer of virtual value. As most users would have learned by now, digital coins do not have a physical form and representation. They have only intrinsic value.

But it is not hard at all to exchange a Bitcoin for one of the major fiat currencies. There are lots of completely legit and genuine cryptocurrency exchange platforms that operate applying the official cryptocurrency exchange rates. Users can simply register for one of them and get the equivalent.

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Transfers between two distinct Bitcoin wallets becomes possible when the private key matches the public address. Otherwise, it would not be complete. The most important thing is to keep it secure and safe.

The best methods for doing this are:

  • Start by Carefully Choosing a Strong Seed & Secure Bitcoin Wallet Password;
  • Never Forget to Use & Activate the 2FA (Two-Factor Authentication Key);
  • Don’t Let the Phishing Attacks Get a Hold of Your Private Key;
  • Avoid Opening E-Mails That Come From Dubious Companies & Individuals;
  • Forget About Clicking On Random Links On Social Media;
  • Never Download Unknown Files;
  • Don’t Open Your Personal Bitcoin Trading Account Using Public Wi-Fi Networks;
  • Always Use a Nickname & Password That Have No Relation to Your Real-Life Persona;
  • Forget About Giving Personal Information to People You’ve Just Met;
  • Open Only Cold Storage (Offline) Bitcoin Wallets & Not Ones That Require Non-Stop Internet Connectivity;

Learning to Work With Bitcoin is Fun & Easy!

Bitcoin trading may seem like the mission impossible at first. But as long as one has the will and keeps an open mind, this is not hard at all. The most important steps are the Bitcoin wallet security measures which must be undertaken right from the very beginning. After that, the process becomes much more easy-going and even – fun!

Find the BEST Crypto Tool

Investment solutions get released every day. But that does not mean each is good for your trading ambitions. You need secure and proven to work platforms if you want good returns on your investments. We have found the best among the best and we strongly recommend them. Visit the industry leader if you are eager to start trading.

 

To start making investments, do the following:

1. Go to the Official Website of the Platform

2. Complete the Sign-up Process

3. Start Trading


Jamie Portiss

Hello users, My name is Jamie Portiss. Let me tell a little bit more about myself. I am a Financial Analyst by profession. Having worked my entire life in the financial services sector, I have managed to build a solid investment portfolio. It all began with a Bachelor’s Degree in Finance and right after graduating from university, I began working as a Junior Financial Analyst at a startup company, dealing with financial solutions. I want to bestow our know-how and understanding of the virtual markets (the cryptocurrency exchange, Bitcoin trading, and Altcoin investment spheres, in particular) with users. All that it takes is to do it the right way!

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