BITCOIN : The Digital Currency of Future

Know Your Bitcoin(BTC)!

Everybody wants to hold Bitcoin today. The decentralized cryptocurrency is a part of almost everyone's portfolio. However most of us just invest in it by copying and listening to others without actually knowing what the buzzword cryptocurrency is. 

Welcome to Web 3.0 which is Cryptocurrency and Blockchain !

In this article, we will discover what Bitcoin is? How to mine the Bitcoin and other cryptocurrencies? How and where to store cryptos? And other interesting facts you were not aware of. Let us begin with it.

What is Bitcoin?

Courtesy of unsplash.com

Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. 

Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.

Bitcoin is #1 cryptocurrency with Market Cap =  $1,160,413,670,075 

NOTE: Market Capitalization keeps on changing and hence the rank as well.

Advantages of Bitcoin:

• Fast peer-to-peer transactions
• Worldwide payments
• Low processing fees

Small History

Bitcoin’s original inventor(Father of Bitcoin) is known under a pseudonym, Satoshi Nakamoto. As of 2021, the true identity of the person or organization that is behind the alias remains unknown.

On October 31, 2008, Nakamoto published Bitcoin’s whitepaper, which described in detail how a peer-to-peer, online currency could be implemented.

Just two months later, on January 3, 2009, Nakamoto mined the first block on the Bitcoin network, known as the genesis block, thus launching the world’s first cryptocurrency.

1st Bitcoin Transaction:

The first known Bitcoin commercial transaction occurred on May 22, 2010, when programmer Laszlo Hanyecz traded 10,000 Bitcoins for two pizzas. At Bitcoin price today on 2nd November 2021, those pizzas would be worth an astonishing $615 million. 

This event is now known as “Bitcoin Pizza Day.” In July 2010, Bitcoin first started trading, with the Bitcoin price ranging from $0.0008 to $0.08 at that time.

Blockchain In Nutshell

Bitcoin is based on the technology called Blockchain. Blockchain is decentralized records meaning there is no central party that controls the transactions. Each block in a blockchain contains the answer of unique cryptographic puzzle, solving this puzzle means adding a new block to the chain and the process is known as mining.

Bitcoin miners create a new block by solving a proof of work problem that is chained through cryptographic proof to the previous block.

Hence the overall security of the bitcoin is quite impressive. Cyber wrongdoers will have to see information in every block of blockchain which is not possible.

Smart contract: Bitcoin can be used as a smart contract(process of automating frequent tasks).

Investment Vs Trading 

Investment(HODL) is the best option in cryptocurrencies unless you are a full-time professional trader. Due to its high volatile nature trading in crypto must be done with proper knowledge and concentration.

Cryptocurrency market remains open 24x7 for trading. Even if you are investing in any crypto, you should be careful and should not invest more than 10% of your portfolio or as per your risk taking factors.

If you are looking for an investment in Bitcoin, some trading firms like Bitbns also provide SIP route in Bitcoin investment. 

There is no need to buy whole Bitcoin(Unless you afford it), you can buy it in small partial chunks as well.

Elon Musk tweets: Events like these makes Bitcoin prices highly volatile, giving price a bullish or bearish end. One fine day he tweets Bitcoin causes global warming due to its mining concept used(proof of work), breakdowns prices. (NOTE: He books handsome profit before tweeting)

Another day, a tweet notification pops up saying Tesla will accept Bitcoin as payment for Tesla car purchase, sending Bitcoin prices to the moon(Term used for strong bullish move). He did the same thing with Dodgecoin as well.

Concept of Mining

Hardware Mining

Bitcoin uses SHA-256 proof of work scheme which is introduced by it(Team) for mining. Proof of work require resource intensive hardware to mine it which emits energy thus produces harm to the environment. 

Proof of stake is another type(consensus or model) of mining any crypto where you don't create new coins but stake already created ones and for staking them you receive rewards in your wallet.

Mining requires a wallet that you can create, backup and encrypt. Wallet contains the address in case you need to send or receive Bitcoin or any crypto. 

Wallet can be a hardware wallet and software wallet(like smartphone app: Coinbase wallet). HOT WALLETS are directly connected to the cloud and provides plethora of  features compared to COLD WALLETS(Hardware Wallets).

Hardware wallets are considered to be more secure than software ones. Hardware wallets includes: Trezor & Ledger(Available on Amazon or https://www.ledger.com)

Below is procedure to install and use hardware wallet for storing crypto:

1. Purchase a hardware wallet(Ledger Nano S is good). 
2. Plug in your Nano S with the USB cable to a machine with internet and follow the on-screen instructions.
3. You can choose to make a new wallet or import a wallet.
4. Choose a PIN code. Make sure you remember the PIN always because three wrong PIN entries will reset your Nano S.
5. Backup your recovery phrase. A recovery phrase is a 24 word mnemonic phrase designed to recover your device if you forget your PIN or if your Nano S is lost or stolen. Keep your “recovery sheet” in a safe place. (Ideally, stored in a safe)
6. Install the Ledger apps on your computer to use your device and access your wallet. There are Chrome extensions available.

You can import Bitcoin to your wallets to and fro with the help of wallet addresses.

For mining you will need to join a pool of miners by giving some share as a fee. Selection of pool should be done with proper observation as fee % differ pool to pool which depends on number of miners in particular pool.

Hardware mining set up requires a high amount of dedicated GPU and coolers for lowering the heat emissions. You can also get minimum requirement of resources for mining on official Bitcoin site. China used to be a leading country for mining Bitcoin, now US has highest mining farms.

Courtesy of pixabay.com

Cloud Mining

Bitcoin cloud mining is easier to perform, you can do it using your personal laptop or desktop as well. You don't need to buy the costly hardware for mining Bitcoin on cloud.

There are plenty of sites that allows for mining of Bitcoin and other cryptocurrencies. I have used https://unmineable.com for mining. You have to download a rig software on the site documentation, download a wallet as per crypto(few wallets does not support the mining; like for Dogecoin mining: Dogecoin Core is supported and not Multidoge) you want to mine and you can start mining using a command.

You can do it using CPU as well, if you have dedicated GPU in the machine, it will speed up the mining process generating higher batches of crypto. We will see this in details in next article.

Browser Mining

You can also mine few cryptocurrencies via web browser with releasing hashing rate by spending the minimum processing power of your machine.

You don't even have to download a wallet. As soon as you go on website of that crypto, it will automatically create a wallet for you on a browser and start mining with auto selection of pool. You just need to move the slider for selecting right compute power for mining.(Eg: Webdollar)

Hash Rate is a unit that measures the processing power of the Bitcoin network. We will definitely look into it in more details in an upcoming post. Stay tuned.

By Lens of Govt

Courtesy of unsplash.com

Government of India will be working on regulating(taxation) the cryptocurrency. The crypto party in India just got bigger this week as 105 million Indians own cryptocurrency which is 7.90% of India’s total population.

Positive bull cycles, global regulatory support, big influencers like Elon Musk and investment awareness plus education are the main reasons for the spurt, says CEO of BuyUcoin.

The level of advertising and marketing of crypto firms has also seen rising in recent or current weeks. Crypto can also be seen as hedge against equity markets. 

In United States, a new crypto ETF called ProShares Bitcoin Strategy ETF (BITO) has been started trading at New York Stock Exchange. Its the key moment in ongoing rollout of cryptocurrency in the world.

Developers community & Whitepaper

You cannot ignore the whitepaper released by the team and also larger the developers community of any cryptocurrency the better it is. 

Interesting Facts:

Courtesy of pixabay.com

• 1st Digital Currency Of World 

• #1 Rank(MCap)

• Maximum Supply = 21,000,000(21Million)

• Time To Reach $1Trillion MCap = 12 Years

• The Smallest Unit = 0.00000001 BTC

• All Time High = $66,930.39(Brokerages suggests targets beyond $100,000)

• Official Site: Bitcoin.org

If you want to know more or want to contribute, please add it in comment section. Hope you learned something new from this article.

NOTE: Referral link for starting SIP in Bitcoin https://ref.bitdroplet.com/1159246 

References:

Coinmarketcap.com

Economictimes.com 

Coinbase.com

Bitbns.com