Bitcoin has consistently maintained its first rank for many years. For many people, Bitcoin means cryptocurrency, and they don’t know much about other cryptocurrencies. Bitcoin is always in the news due to its staggering price. As per recent news, one Bitcoin is equivalent to 39,036.40 USD.
If you plan to become a crypto trader, you should have some basic knowledge of Bitcoin and how they work and trade. In this Bitcoin for beginners article, you will gain some important knowledge regarding it. Read on to know.
What is Bitcoin?
Bitcoin is the first decentralised digital currency that came into existence. A digital currency does not have any physical form, and everything about Bitcoin is computerised. You can send and receive crypto coins to anyone with a crypto wallet. However, you will need a computer/device with an internet connection to transfer or receive crypto coins.
Like all cryptocurrencies, every Bitcoin has a unique private and public key. The private key and public reside with the owner. You can keep them in your crypto wallet or any folder on your computer. The crypto key is a 256-bit that is needed for crypto transactions. Bitcoin is encrypted by a technology known as cryptography, and it is not possible to duplicate or create fake bitcoins.
How are Bitcoins Transactions Done?
One important thing you will learn in the Bitcoin for beginners article is how their transactions are done. The information is important, especially if you plan to trade them in the near future. The transaction is done at an exchange with validators working in the background. The exchange lists the price, and you can express your interest in buying them. The exchange will facilitate the purchase by bringing buyer and seller to one place known as a desk. Once you transfer money to the seller, they send bitcoins to your crypto wallet.
How are Bitcoins Made?
Bitcoins are created by a process known as ‘mining’. It refers to a complicated process where the miners have to solve a computational puzzle to mint a new Bitcoin. The miner who successfully solves them gets the new Bitcoin. Next, the minting process needs to be verified by another miner. Finally, the newly created Bitcoin is added to circulation after successful verification.
Can a User Create an Infinite Number of Bitcoins?
The answer is ‘No’. Satoshi Nakamoto, the founder of Bitcoin, has placed a limit on the total number of bitcoins that can be created. Crypto experts mention that only 21 million bitcoins can be mined, and more than 18 million are already mined. In simple words, more than 90% of Bitcoin are already mined, and only 10% remain to be mined.
Where Can You Buy and Sell Bitcoins?
Crypto exchange is the best place to trade them. You need to register at the best crypto exchange by creating an account. As a part of the registration process, you have to enter personal information like name, email address, phone number and provide a government ID to verify your identity.
After creating an account, you can fund the crypto account with your checking account and wire transfer funds to your crypto account to buy them. Then, when the price of bitcoins rises, you can sell them to make a profit and get the profit converted into fiat currencies and transfer it to your checking account.
The crypto exchange lists the prices for various crypto coins. You can exchange your bitcoins for other coins like buying Ether, Dogecoin or other popular crypto coins available at a comparatively lower price.
Now that you have enough knowledge about Bitcoins, you can go ahead and try your luck in crypto trading at an exchange.
