December 04, 2020

What is Bitcoin and How Does it Work?

By Sona Mathews

Every Bitcoin defines as a computer file, which you need to store in a digital wallet. A digital wallet is software one can install on a mobile phone or computer.

Other users of bitcoins can send and receive bitcoins to and from your digital wallet.

One of the best things about Bitcoin is that every transaction you make in the system is being monitored by blockchain, which is basically a public list.

What is Bitcoin and How Does it Work? eAskme
What is Bitcoin and How Does it Work? eAskme

Other people are at: Frequently Asked Questions About Bitcoin

This means that tracing bitcoin history is possible.

This means that other users of this crypto are not allowed to undo-in the transactions, making copies of the transactions, or spending the bitcoins they do not own.

How Do Individuals Make Bitcoins?

Well, creating bitcoins is possible in three different ways:

  • You can purchase bitcoin with your fiat currency, such as US Dollars
  • You can sell your belongings and require your buyer to pay using bitcoins
  • Create your own bitcoin from a specialized computer.

How Does New Bitcoins are Established?

Considering that we are living in a technology-based generation, experts had created several specialized computers that allow individuals to create new bitcoins.

Individuals should create process transactions on their computers for the benefit of everybody to allow the Bitcoin network to work.

These specialized computers are intended to give the bitcoin miners access to different mathematical problems. The miners who can solve the complicated mathematical equation quickly will be rewarded with a bitcoin they can keep.

Mining is the process used by individuals to create bitcoins with the use of a specialized computer. But keep in mind that mathematical problems get more difficult in every stage of mining.

This is the reason behind the possible stopping of generating bitcoins.

If you are planning to mine bitcoins now, you might need to wait for several years before you receive one bitcoin.

In connection to that, you might spend a lot of money to pay your electricity bills to run your computer.

There is also a chance that the money you spend on electricity might be higher than the possible value of a single bitcoin.

Why Are Bitcoins Very Valuable?

Bitcoins are considered to be a valuable asset. This is simply because its followers think that they are special.

A lot of things out there, aside from money, are considered by people as a valuable asset, including diamonds and gold.

Bitcoins are considered to be valuable since a lot of individuals want to exchange these assets with physical services, cash, and products.

Why Individuals are Dreaming to Have Even a Single Bitcoin?

Some individuals are dreaming to have a bitcoin considering the fact that it is not under the control of a bank or government.

Furthermore, they are still allowed to use their bitcoins without being known. Even though the entire transactions are being monitored, no one can get your “account number” unless you give them.

Does Bitcoin Secure?

As we mentioned earlier, each transaction you make in the Bitcoin network is monitored publicly. This means that other bitcoin users find it hard to spend cryptos owned by others, make fake ones, or copy bitcoins.

Keep in mind that deleting your bitcoins and losing all your bitcoins in your digital wallet is quite possible.

Aside from that, there are also thefts that are recorded when trading or mining a bitcoin using a website.

Take note that the price of a bitcoin increases and decreases unpredictably for the past years from its creation way back in 2009. Not only that but different individuals think that turning your fiat currency into a single bitcoin is an unsafe move.

If you still have questions? Share via comments.

If you want to know more.....Stay tuned with us to stay updated.

If you find this article interesting, do share it with your friends and family.

Find this post helpful, don’t forget to share it!

Other Handpicked Guides for You;

Don't forget to like us FB and join the eAskme newsletter to stay tuned with us.

Other People Are Reading!