Important Bitcoin Basics and How It All Works

•No Central Command

Bitcoin isn’t owned by anyone. Think of it like Facebook or email. Anyone can use it, there's no single company that is in charge of it. Bitcoin transactions are irreversible. This means that no one or government, including banks can block you from sending or receiving bitcoins with everyone else, anywhere or across the world. With this freedom comes the responsibility of not having any central authority to complain to if something goes wrong. Just like physical cash, don’t let strangers hold your bitcoins for you, and don’t send them to untrustworthy people on the internet.

•Secure Your Wallet

There are multiple types of Bitcoin wallets, but the most important difference is in relation to who is in control of the private keys required to spend the bitcoins. Some Bitcoin “wallets” act more like bank, they are holding the user’s private keys on behalf. If you choose to use one of these services, be aware that you are completely at their mercy regarding the security of your bitcoins. Most wallets, however, allow the user to be in charge of the private keys. This means that nobody in the entire world can access your account without your consent. It also means that no one can help you if you lose access to your private key or otherwise Forget your password. If you decide you want to own a lot of Bitcoin it would be a good idea to divide them among multiple wallets. As the saying goes, don’t put all your eggs in one basket.

•Bitcoin Price

Like everything, Bitcoin’s price is determined by the laws of supply and demand. Because the supply is limited to 21million, Only 20 Percent Of Total Bitcoins Remain To Be Mined. Bitcoin miners passed a significant milestone over the weekend, when they mined the 16.8 millionth bitcoin from the cryptocurrency's planned total of 21 million coins as more people use Bitcoin the increased demand, tally with the fixed supply, will force the price to go up. Because the number of people using Bitcoin in the world is still relatively small, the price of Bitcoin in terms of traditional currency can fluctuate significantly everyday, but will continue to increase as more people start to use it. E.g, in early 2011 one Bitcoin was worth less than one USD, but in 2015 one Bitcoin is worth 100s of USD. In the future, if Bitcoin becomes truly popular, each single Bitcoin will have to be worth at least 100s of 1000s of dollars in order to accommodate this additional demand.

•Bitcoin Exchanges

There are multiple ways to buy Bitcoin, but trusted exchanges are a great way to acquire Bitcoin. Because there are inefficiencies in the conventional banking system, interchange will sometimes have slightly different prices. If the difference is too big, traders will buy low on one an exchange and sell high on another and close the gap. If an interchange constantly has considerably different prices than others, it is a sign of trouble and that interchange should be avoided. As with everything else, do your research and find an exchange you can trust. It’s also a good idea not to use an exchange as a wallet. Move your Bitcoin to your personal wallet so that you have control over your funds at all times.

@bluehearted