Before explaining “Bitcoin for dummies” let’s begin with defining currency
The first step to explain Bitcoin for dummies would be setting currency as “money currently being used.” European euros, South African Rands, US dollars, and the Japanese Yen are known as “fiat currencies,” all of which are government created. “Fiat just means that they are officially authorized.
Well, what about “crypto”?
Crypto is short for “cryptography,” which is a computer technology used to secure and hide data, among other things. Cryptocurrency is known as electronic money that is designed with the technology to:
- Control when and how it is made
- Protect transactions between peers
- Hide and protect the identities of its users.
Now, what does this have to do with bitcoin for dummies?
Bitcoin has received quite a lot of attention and speculation, both good and bad since it started becoming popular. Bitcoin for dummies is expected to answer numerous questions as to where it originated from, how it works, what it is exactly. Is it money on the internet? Is it a new preferred currency? This gradually becoming a new way of life? The answer to these questions is YES it is all this and then some. Understanding bitcoin for dummies can be quite confusing, so let’s take it to step by step.
So, how can we make bitcoin and a more understandable topic? By writing bitcoin for dummies.
After all, bitcoin for dummies is just a simple way of describing a more complex subject.
The best way to understand Bitcoin is to think of it as intangible money. Therefore, it is known as a cryptocurrency, a kind of digital cash, or electronic cash. Bitcoin was invented and released as software in the year 2009 by an anonymous person or group of people that go by the name Satoshi Nakamoto.
Because we are trying to simplify bitcoin for dummies without going into more detail about mining bitcoin, here is a simple breakdown: various users have their computers verifying transactions in a peer to peer network. These users receive a reward of new bitcoins equivalent to the capacity of the computing power that they donate to the system.
How to acquire a bitcoin? – Bitcoin for dummies
To use bitcoin, you actually need to own some bitcoins at some point. Unfortunately, buying bitcoin is not as simple as going to the nearest ATM and inserting your card. There are a few steps to follow to get yourself some bitcoin, these are as follows:
- Right off the bat, because it is an online transaction and security measures must be taken, you need to make sure that you are using a legitimate platform or that the person you are purchasing from is real.
- Make sure to use an exchange like GEMINI or to purchase. Make a registration with your details on this trusted exchange, then make a deposit of your local currency such as USD and then go on to buy the bitcoin at the current exchange rate.
- Buy the same procedure directly in person.
- Always remember that as soon as you purchase your bitcoin transfer them to a location that you know is within your control. DO NOT keep your Bitcoins on an exchange long-term.
- You can also trade CFDs on brokers by depositing FIAT and withdrawing Bitcoin! But be smart and read how to do it first!
Besides the basics of digital currencies or cryptocurrencies, always make sure you understand the risk/reward ratio.
Invest in Bitcoin after you’ve done your due diligence. Always follow reviews, news, articles, and guides such as bitcoin for dummies to enhance your blockchain knowledge.
Such investments require an extensive understanding of how blockchain technology will impact the future of finance.
NEVER invest in something you don’t understand.
ALWAYS invest only money that you’re comfortable losing in a worst-case scenario.