Bitcoin for dummies

Recently, we often encounter the term Bitcoin. What is it, what it is, why, how, when, and what? Read on and learn more!

What is Bitcoin?

Bitcoin is an Internet-based open-source cryptomain, provided through P2P (peer-to-peer) networks. Now we're going to translate this, because besides those internet sites, nobody with glasses and pimples probably does not understand anything.

Internet = works only on the Internet.
Decentralized = without a central point, a weaker article that no one ever turns off and stops. Bitcoin is public, can not be falsified, and anyone can verify a payment or balance on the account.
Open-source = open source code; everyone can look (who understands), how it's programmed and how it works in detail.
Cryptomena = monetary name based on mathematical principles.
P2P (peer-to-peer) = many peers that communicate with each other to ensure decentralization. Do you know torrents? They work similarly, just here you do not get your favorite movie or series, but the complete history of all payments (boring, what?).

Glossary of other terms:

Bitcoin - with large B, the name for the entire network and its functionality (protocol)
"Is Bitcoin a revolution and will change the world?"
bitcoin - with small B, Bitcoin currency unit, BTC shortcut
"Ferko has two bitches."
Bitcoin Address - is the account number in the Bitcoin world
"Send me the taxi for the taxi."
Private key - is a long string of numbers and letters that allows you to prove ownership of bitcoins over the entire network. Each address is derived from one private key.
"I lost all private keys, I'm out of business."
Bitcoin wallet - A file containing private keys and addresses that uses the app to send and receive payments.
"I reinstalled my computer and forgot to back up my wallet. I'll jump on the train or drop the gas - I'll see! "
Miner - a banner or a digger, is a person who draws on new bitcoins while verifying transactions. It can also be referred to as a specialized bithole mining machine.
"Today will be a meeting of miners and we will try to set up our own trade unions!", "Yesterday, my miner has burned down. :-( But I've already ordered a new and more powerful. "
Blockchain - a block of blocks (not a lottery lottery), it contains all transactions in the Bitcoin network, ie bitchon transfers between addresses. Blockchain can not be falsified for block sequencing.
"I found in the blockchaine that Jozko had transferred 10 bitcoins to the public account of Al-Qaeda - that would be a prospect!"
Block - A block of transactions blocked by the miner to get new bitches.
"Ferko's transaction has not yet been put into any block.", "Jozko has a block, probably buying something pretty or at least paying for the burned electricity to his miner."

Virtual currency, digital curreny or cryptocurrency?

It's a word-book, but when I see the term "virtual currency" - it's breaking my life.

A virtual currency is a currency where the publisher follows the property - such as the Tesco Club Card body or the Alzac. That's why Bitcoin has never been and will not be a virtual currency.
A digital name is a name that exists only in electronic form. But Bitcoin is not an officially recognized name, but if someone recognizes it as a menu, it will be a digital name.
Cryptomena is a currency based on mathematical principles. Bitcoin is now cryptomed today.
How did Bitcoin originate?

Bitcoin has designed and implemented someone called Satoshi Nakamoto and launched it in 2009. Satoshi is only a pseudonym, because he would have to be mad to not know where everything would go and that several countries would have an eminent interest (and just the interview and the autograph would probably not work).

Over time, many enthusiasts have joined together for a good thing - they have begun to pay bits of bitterness among themselves, and to make improvements, programs, services, and other things to do with Bitcoin's development and to bring it to the attention of ordinary people. At the beginning bitcoin had very little value, literally a few cents. That's how the story came when a guy in 2010 said that Bitcoin had no future and decided to buy a pizza worth up to $ 25 per 10,000 BTC. The most expensive pizza in the history of mankind is worth about 3.5 million euros today.

Is Bitcoin a Scam?

Bitcoin is no pyramid game. Although it is true that whoever bought at the beginning is now a pig in the yoke, and it is true that his creator owns about one million bitcoins - now about half a billion dollars (now, by the way, you know why Satoshi Nakamoto is a pseudonym , but I would like to welcome all the envy - he would not even appear in the list of the richest people in the world, who regularly writes Forbes magazine). Bitcoin, on the other hand, is a stable, secure payment system that is absolutely transparent.

It should be remembered that there are a lot of fraudsters and hackers in the world of Bitcoin - for the simple reason: Bitcoin is decentralized, no one has the power to remit funds sent out, and it is quite difficult to find the owner of the account where bitcoins came. Therefore, they are often the subject of BitTorrent owner theft or a poorly secured Internet service bill.

So beware of who you send your bitches, and do not find the cheaters who promise huge revenue.

What are the benefits of Bitcoin?

Speed ​​- Bitcoin payments are irrecoverably credited to the payee's account for up to 30 minutes. Common bank transfers take several days.
Transparency - Bitcoin has the advantage that you can track the movements on your address and even receive payments without opening your wallet.
Decentralization - no one can turn it off and no one can forbid you to send bitcoins from one address to another. If Bitcoin works, Bitcoin will also work. You can see the list of peers (online computers that contain the entire history of transactions).
Low transaction fees - nothing is free. When you pay for your non-contact card for rosés and parsley salad, it does not mean that if you leave your money, it's free. For the transaction, the bank pulls the trader and he then transfers the cost to the merchandise. Payment by bitcoins costs about 7 cents for a fast transaction, they can also be sent for free, only a credit to the address (account) can last for the whole day. The total amount does not matter, so you can buy a house and pay for a transfer of 7 cents.
Bitcoin deltability - 1 bitcoin (BTC) can be divided into eight decimal places. This means that you can send 1 satoshi (BTC base unit), which is 0.00000001 BTC (currently around € 0.00000371). So if 1 BTC once costs € 10,000, the smallest unit will be € 0,0001. We still have enough reserve for microtransactions. We know a few bitcoin units, namely:
1 BTC (bitcoin) = 1 BTC
1 mBTC (mil bitcoin) = 0.001 BTC
1 uBTC (micro bitcoin) = 0.000 001 BTC
1 satoshi = 0.00000001 BTC

Bit-Anonymous Money - The Bitcoin network contains no names, birth numbers, only the number of bitcoins and the data from where the bitcoins left and where they came, or the optional transaction description. And why almost anonymous? Anonymous is probably like the cash of money we know today. Bitcoins, for example, they often buy on exchanges where they ask for AML data (money laundering data) and are therefore directly linked to vendor / purchaser documents. That is why various "bitcoin" "washing machines" work, which convert bitcoin transfers at the same value to one another and nobody knows who they actually sent.
Full control of your finances - do you have control over your money? What if someone decides to freeze your bank account? In Cyprus, they could tell you ... Whether you want to pay a beer bill, or buy drugs and counterfeit documents, nobody stops you - no institution will ask you who you sent the money, how much money and no approval of the transaction by banks and laws they do not concern you. Well maybe hey, but who's worried when it works?
Deflationary currency - banks issue money as on a running belt, and it is long ago that money is built on the value of gold as it used to be. The more money is in circulation, the higher the inflation and the lower the value of money. Bitcoin, however, has in its rules that there will be 21,000,000 BTC in circulation and no more - so in the long run (if anything is not serious) its value will increase. The problem is only in loans, so tip to finish: bitcoins do not borrow.

What are the disadvantages of Bitcoin?

Course volatility - one bitcoin has one Bitcoin value. Unlike the central banks that take care of the stability of their exchange rate, the bitcoin price is formed on the stock exchanges where it is traded. The evolution of the bitcoin value is constantly changing. The most common course development is bitcoin control reports in large countries such as the US, China, Russia, or the European Union, as well as service problems that are built on bitcoine (the most common exchange). All this is not a technical problem of bitcoin, but external influences. Summary and underlined - if you buy bitches for 500 € today, they can be worth € 50 or € 5,000 a month. Movement of the price of bitcoin on the world stock exchanges does not make any difference.
Technological skills - for a computer illiterate who can not even use internet banking, the problem is to pay for bitches. You need a bit of awareness about BitComet functionality and about computer security. There are services and applications that try to get as close as possible to ordinary people, but how-such awareness must be. Otherwise, funny situations arise when someone wants to send bitcoons to their bank account number,
Viruses and security illiteracy - Bitcoin works on the Internet, and there are also evil (often hated) people who are more skillful than others and are endeavoring to enrich them. Today there are viruses that steal bitcoins or abuse the computational power of ordinary people to exploit cryptomenias. Viruses can be prevented, not only by antivirus (the efficiency of which may be inadequate). One of the protections is, for example, the use of offline solutions (such as good old printed private key cards) or technology solutions that prevent any virus from stealing your bitcoins, but you can dispose of them and use them (eg the Bitcoin Czech Treasure) without any problems. So if you mean Bitcoin seriously, take a look at how to create an offline or paper wallet. What is not connected to the Internet will not steal you. Also worth mentioning are racketeering viruses (so-called Ransomware) that can encrypt all the data on the computer (photos, documents), and for decryption they require payment in bitcoins as a ransom. If the owner of the infected computer fails to pay, the decryption password is deleted from the attacker's servers, and all data is irreparably lost.
Centralization - People are impractical and they think they can be safe if they put their bitcoons in an internet bank. A mistake has happened and many times it happens that services that keep bitcoins for any purpose have been robbed of hackers. Sometimes the hackers are not even behind, and the so- samookradnutie - when the owner suffices that robbers hacked him, but he was robbing himself (something known in Slovakia). Therefore, do not keep your bitcoons out of your power - for example, on stock exchanges. The Exchange is not a wallet!
Bitcoin irreversibility - If bitcoins are sent to a bad address, they are irretrievably lost. If you are sent to the fraudsters account, you will never get to them - no one will return them. In the case of trade between people, so-called " escrow services, when a third party joins the store. He will receive the bitcoons from the buyer and send it to the seller only when the buyer confirms that the deal went well.
How do bitcoins emerge?

Money is printed by central / national banks. Bitcoins are not pressed, bitcoins are being mined. Mining of bitcoins is a separate article, but in a nutshell it can be said that it is the power of the Bitcoin network. Some commonly used processors and graphics cards were used for mining. Today, unfortunately, only expensive equipment designed for mining bitcoins is today. But these digital miners also control bitcoin transactions and put them into a blockchain, and they are actually replacing banks. They also come with all transaction fees, so if all the bitches are used once (around 2140), they will live out of them.

Can you make money on Bitcoine?

Yes and no. The simplest is to buy bitcoins at a good price and sell them even better. There are also many traders on stock exchanges that use growth and a drop in the current rate so they try to trade every day.

I do not recommend pulling bitcoins, and I say this from my personal experience. The Bitcoin network's performance is steadily rising, expensive devices mostly do not lose weight - and so only manufacturers of these devices often pack. Drawing cryptomeni is more of a passion, and some gain is just a nice part.

Another way is to provide a variety of online services for bitcoin customers such as exchanges, exchange offices, etc., where a small percentage of their use gets into the owner's pocket. Why not, besides online services, you also offer offline?

Where to buy and sell bitcoin?

Selling a higher amount through a bank account may be a problem with regard to possible frauds, such as when somebody agrees to buy more expensive goods and raises your bank account. You will send him bitcoins, and the authorities will accuse you of fraud as the owner of the misused bank account, and at least they will receive the money they have credited - but no sentbacks will be returned. So be careful.

What is the future of Bitcoin?

Great. Bitcoin is a very interesting young technology that has addressed millions of people. New services are being created every day, and retailers who accept this menu are getting up. Countries around the world are addressing its regulation of taxes, accounting and other unpleasant but, unfortunately, necessary things around trading.

And what will his price be? One bitcoin will always cost one bitcoin. If I knew the evolution of the exchange rate to the euro, I'm a millionaire - in the long run, but its price rises.