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Everything you need to know about Bitcoin and how it works

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You must have heard about the term Bitcoin in various instances. Some people might mention that they bought something with it or some people might mention that they have a huge collection of bitcoins. So now, you might wonder what is bitcoin? Well, in this blog you will get all your bitcoins related answers and you will be able to understand the concept in a much better way.

Before we get started, a fun fact is that Bitcoins are currently more valuable than gold. One single bitcoin values to more than three thousand Australian dollars. This the reason why it is not too late to start mining bitcoins of your own.

Moving on let’s get into the gist of it,

To begin with, what is Bitcoin?

Bitcoin was created back in 2009. it is a decentralized digital currency with no central authority and you can use bitcoins in most countries. Bitcoin can be used to purchase everything that includes online shopping to buying a million dollar mansion. It is maintained and secured by a peer-to-peer network. This means that each transaction that takes places is verified by each node from the network.

The blockchain which is kind of a ledger for bitcoin maintains the records of what bitcoin is owned by who. Every time a new transaction takes place it is sent to the network and mined into the blockchain. When you own bitcoin you have the right to unlock and spend those funds. Bitcoin is one of the most revolutionizing cryptocurrencies that exist today.

What are the benefits of bitcoin?

People have associated plenty of benefits with bitcoins. As bitcoins are extremely valuable as compared to gold they are also easily transferable. It is possible to make payment anywhere in the world at a much low transaction fee. The number of companies that accept bitcoins as payment is increasing day by day. However, bitcoin is still very new in the market as compared to any other forms of payment. This is why it still sees high volatility.

Most users of bitcoin are investors and traders who need to make huge payments at once. There have been a significant amount of investments made just to make bitcoin easier for smaller payments. Australia has a thriving market for bitcoins. The governor of RBA made bitcoin legal in 2013. the Australian government treats bitcoins just like money and it is no longer the subject to double taxation when it is spent. This means that you don’t have to include all bitcoin-derived income in your tax return.

How to get your first bitcoins?

It is ideal to start off by buying only a small fraction of bitcoin. It could be as small as 10$ worth. Some people are put off by the high prices of bitcoin which is why they start by investing in a small amount. The two main ways you can obtain bitcoins are: buy them from an exchange or you could receive them for goods and services.

Setting up a bitcoin account is very to the point process and just requires a few forms of identification. Once your account is set up you are just a few clicks away from buying and selling bitcoins. Once you purchase bitcoins using Australian currency they will be available in your account so that you can easily send them wherever you want.

Where can you store your bitcoins?

Storing your bitcoins in a secure wallet is the most important part. There are several wallet options that you can consider. However, the choice of the wallet should solely depend upon the thew type of investment you are making. It Is recommended not to keep your bitcoins on an exchange. For smaller amounts, it is advisable to use mobile apps such as Mycelium for android phones and Xapo for iPhones. These apps store private keys to your funds on your phone.

When one wants to send bitcoins it can be very inconvenient to type long bitcoin addresses to authenticate the transactions. This is when these apps can come in handy. These apps use QR codes which scan and send and receive this information. Bitcoins can also be stored on a laptop or computer using software like Bitcoin Core which provides an added benefit of running your own node to contribute to the security of the network.

Where can you spend your bitcoins?

This blog must have cleared most of your doubts starting from what bitcoin cash is. There are a lot of retailers that accept bitcoins both online as well as offline. From buying a cupcake to booking a luxurious holiday bitcoins are quick and easy to use. The payment made via bitcoins is hassle-free as it involves no third parties. Bitcoin is still young but its underlying blockchain technology is going beyond currencies and also changing a lot of industries.

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