~ LUCKY'S CRYPTO GUIDE FOR BEGINNERS ~ PART FOUR - WHAT IS BITCOIN? ~

in cryptocurrency •  last year  (edited)

LUCKY'S CRYPTO GUIDE FOR BEGINNERS

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PART FOUR

WHAT IS BITCOIN?


Welcome and thanks for checking out the fourth installment of my crypto training guide for amateur traders. Lucky's Crypto Guide For Beginners is designed to take an individual with no prior knowledge of cryptocurrency and give them the tools and knowledge necessary to successfully trade or work within the cryptocurrency community. New and seasoned traders alike can take in a plethora of valuable information by subscribing to and reading my crypto training guide. Part Four of my guide provides insight on the most pivotal part of crypto and it answers the very first question anyone completely new to cryptocurrency has ever asked. What is Bitcoin?


WHAT IS BITCOIN?


Bitcoin is the founding father of cryptocurrency and the first cryptocurrency you will likely familiarize yourself with. Bitcoin is a digital (electronic) currency that utilizes an advanced form of encryption (blockchain technology) to verify transactions (withdraws, purchases and deposits) and to generate more currency (digitally "print" or create their currency). Bitcoin is decentralized (defined in Part Two), meaning there is no bank or third party needed or involved to perform a transaction. Bitcoin is stored by you, spent by you, earned by you and DRIVEN by you. To simplify more, Bitcoin is a form of money controlled by holders that is used on the internet or through electronic transactions.

By the book, Bitcoin is defined as

A digital currency in which encryption techniques are used to regulate the generation of units of currency and to verify the transfer of funds, operating independently of a central bank"

Bitcoin started it all. Bitcoin is the grand-daddy of blockchain technology, the key player in crypto exchanging AND the backbone to everything crypto right now. Bitcoin is the first cryptocurrency to have ever been introduced to the world and the technology it is built upon, blockchain technology (explained in Part One), became the foundation of every cryptocurrency in existence. Bitcoin is the reason Steemit exists, the reason Binance exists and literally the reason anything crypto is existent. Bitcoin is simply the most important form of money in existence right now, especially in crypto. Bitcoin can be labelled as "The God Coin".

HOW WAS BITCOIN CREATED?


Bitcoin was created with the intention of giving people such as yourself the ability to accumulate and spend currency online and offline, without needing a bank and without the worry of world government being able to pry into your account. It was designed to provide partial anonymity to us as holders and give us a fool proof method of performing transactions. Bitcoin was introduced to the world in 2008 by an anonymous software developer who uses the pseudonym "Satoshi Nakamoto". Nakamoto personally designed and programmed the famous Bitcoin as well as it's heart, blockchain technology, from the ground up. He gifted the world with amazing advances in modern technology, then seemingly vanished from the crypto world entirely. Where he has gone, nobody knows, but we do know that his creations are changing the world for the better, one day at a time.


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WHY USE BITCOIN INSTEAD OF TRADITIONAL MONEY?


The foundations upon which Bitcoin were built are revolutionary to the world as we know it, to say the very least. The concept of Bitcoin itself is beautiful without knowing all of the fine details. However, these fine details are what make Bitcoin the "Godfather" of all currencies. Bitcoin has a tremendous amount of potential in the world and has been proven to provide a new and improved system for handling transactions and wealth accumulation. This system, blockchain technology, is changing the globe, day in and day out. Here are the fine details, the reasons why you should adopt Bitcoin as a primary form of currency.

~ BITCOIN IS DECENTRALIZED ~

Bitcoin enables a holder (person who owns Bitcoin) to make transactions for any reason, with anyone who has a Bitcoin wallet, without the need for a central authority such as a bank. That means you, as the holder, can spend your money freely without having Big Brother prying into your account, without paying bank fees, without relying on the bank to store assets.....the list goes on. Bitcoin is decentralized (PART TWO), meaning that is it not able to be controlled by any single entity and is more or less controlled only by it's own economy (people who own Bitcoin).

~ BITCOIN IS A DIGITAL CURRENCY ~

Bitcoin is also stored and created electronically, which is par for the course considering that it is a digital currency. Being digital, there is no need for a traditional wallet or safe because there are NO physical copies of Bitcoin. The currency is also not printed in a sense of minting bitcoins, but is created in a process called mining where large groups of computers combine computer power to build new coins (to sum it up). Being digital means someone cannot break into your car and steal a hand-full of Bitcoins from you, simply because they do not physically exist. Where do your Bitcoins go then? You securely store your digital currency inside of a digital "wallet", which is usually a computer program or a piece of hardware like a flash drive. You are given a rather intricate and advanced "password" for your tightly sealed wallet that only you can use to access your funds. The encryption technology behind Bitcoin has made it one of the most secure asset classes in the world, making accounts nearly impossible to hack and your money well protected.

~ BITCOIN USE IS SEMI-ANONYMOUS ~

This has become one of the main reasons that some people now invest into Bitcoin and other cryptocurrency. Using Bitcoin offers you, the user, nearly complete anonymity when performing a transaction. How does this work? It's easy. Remember the wallets we were just talking about, right? These become your identification in so many words. Each Bitcoin user has to have their own Bitcoin wallet in order to process transactions. Each wallet has it's own, unique user identification key, with is typically an excruciatingly long series of numbers and letters. There's no ID to show who is who, no address, no name, no social security number even......just a wallet key to identify your account. This is who you become on the blockchain when performing a transaction, your wallet key. This makes it incredibly easy for someone to maintain a very low profile when making transactions and gives many people in this world a solid piece of mind.

~ BITCOIN TRANSACTIONS ARE IMMUTABLE ~

Basically this means that once a transaction has been entered into the blockchain (the place ALL transactions occur in crypto), it cannot be reversed or cancelled. That is where the term immutable comes from, deriving from the fact that it cannot be suppressed once it has begun. This eliminates a great deal of possibility for fraud when using Bitcoin and also ensures transactions are kept not only recorded to the T, but efficiently processed. Though a transaction cannot be cancelled once it has been started, the transaction information itself can be modified typically up to an hour after initially submitting the transaction. This ensures any errors have the ability to be corrected before the transaction is finalized, leaving little room for error in the process.

~ BITCOIN HAS A LIMITED SUPPLY ~

There are only so many Bitcoins circulating digitally in the world today and only a select amount will be made in total. Bitcoin is capping out at 21 million tokens and will not create any tokens beyond that number. In case you cannot tell, Bitcoin supply is tightly monitored and controlled by the Bitcoin algorithm (the coding used to create BTC), only issuing a few coins an hour across the globe. This means quite a few things for a holder of Bitcoin. First, this means inevitably at some point, supply is going to be scarce and supply is going to eventually drop when production of new coins halts. Bitcoin will see insane spikes in growth and value, making it an investor's dream. Secondly, it means that the value of Bitcoin is more effectively driven and cannot be manipulated by mass productions and printings as with traditional FIAT currency. These two reasons are typically enough to convince and investor to consider buying into one of the greatest technological advancements of our time.

~ BITCOIN IS HIGHLY DIVISIBLE ~

This means that a Bitcoin can be broken into incredibly small fractions (or pieces) to handle small transactions (micro-transactions). With Bitcoin comes the Satoshi, named after the pseudonym of Bitcoin's creator. The Satoshi is to Bitcoin roughly what the Penny is to the US Dollar, except Bitcoin can break even smaller than the US Dollar. One single Satoshi is one hundred millionth of a Bitcoin, where as the Penny is one hundredth of a US Dollar. The ability to handle transactions that small means Bitcoin can effectively handle ANY and ALL transaction sizes and types, making it an ideal currency to use on a regular basis.

~ BITCOIN IS THE GATEWAY INTO CRYPTO TRADING ~

Fact is that anyone who wants to effectively trade for profits in the cryptocurrency market is going to have to purchase Bitcoin at some point. For some, it becomes nearly the only currency they use, others prefer other crypto types. Personally, I use a healthy mix, however ALL of my trades and operations revolve around the cost of Bitcoin and volume of Bitcoin I receive. Because Bitcoin is "The God Coin" in the crypto world and the backbone of trading, you can bet your bottom dollar it would be wise to buy into it and get your feet wet.


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HOW DOES A BITCOIN TRANSACTION WORK?

So, as you've learned by now, all transactions in crypto take place in the blockchain (PART ONE) and are open ended, meaning visible to anyone viewing the blockchain. Basically, a transaction takes place when one party decides to send Bitcoin from their wallet to another wallet. The sending party would enter a few lines of code or and use a blockchain based program (in most cases a wallet or exchange) to enter any pertinent information regarding the desired transaction and then send to the receiving party. This begins the transaction.

The information entered by the sender is then submitted to and received in the blockchain, which performs various tasks to validate the transaction. Typically this involves going through tons of transactions and solving advanced equations to determine, so the blockchain works tirelessly to prove the sender has the funds available and that the sender has authority to send in the first place. The blockchain will find the massive amounts of computational power needed to complete these advanced checks for each transaction by using power from within the Bitcoin network, which is in theory the same thing as a P2P network as described in my THIRD ARTICLE. Basically, thousands upon thousands of people like you and I lend our computer's processing power to the network, so they can borrow it to complete these daunting tasks. Once this check is completed, the funds are deposited into the wallet of the receiving party. That my friends is how you describe and explain a Bitcoin transaction.


So really, what is Bitcoin? Bitcoin is the future of currency as we know it. It is the future of business. It is the future of trading. Bitcoin is the future of technology. It is here to stay and it is surely built to last. Bitcoin is crypto!

That concludes the fourth installment of my crypto training guide. Trust me, I could have kept going and possibly overwhelmed you, but my goal is to teach you a comfortable amount of knowledge at one time, to ensure that you learn at the most effective rate. This article covered from top to bottom what Bitcoin is, what it stands for and how it can help you as a holder. I hope that this article finds the eyes of thousands of viewers, simply because the entire world needs to be educated about cryptocurrency so we can all utilize it's application. Please, share this with people you know and even people you do not. Knowledge is power!

I want to thank @davemccoy , @markkennard , @steemthat , @cryptkeeper17 , @newbieresteemday and @newbiegames for helping me out here lately. The community I have found with all of you is a thing of beauty and I intend on doing everything in my power to help others just as you guys have helped me. Thank you all for the sound advice and support with my work! I'm hoping to work with you guys from here on out!


Follow me @terminallyill to read more thought provoking material on crypto, life, music and more!


Read PART ONE, PART TWO and PART THREE of my Crypto Guide For Beginners.


Check out my original hip-hop music and instrumentals on Dtube HERE.


Read about Atari joining the blockchain HERE or about getting free money to invest HERE.


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I think that at now I will come to read all your post. It is so precious to learn when you begin here you seems to come into a very closed world and it's difficult to understand; thanks to explain. I need it ^^

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I'm glad that I was able to help you. Please stay in touch on Steemit as I will be releasing new parts to this series on almost a daily basis. I received your email to get you subscribed to my mailing list as well, thank you for joining :) You were the first participant!

If you ever have any questions about anything crypto, please ask. Chances are that I can answer it. If not, I'll be driven to learn about it myself and possibly do an article on it. WIN ~ WIN situation!

Thanks again!

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I am very happy to have found your blog because I need explanations and it will be very useful for me. I'll pay attention with all new posts you made.

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Thank you for your support @marie2018 :) I hope I can answer any questions you have from here on out.

I’ve sent you an email to sign up so I can be alerted when new tutorials com out. Thanks @terminallyill

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Thank you for signing up @markkennard. Expect the newest release soon, you will certainly be alerted of it :) Thanks for getting on board and for all of your help on here!

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No problem @terminallyill. I don’t know much about dtube but if you post a video on there do you earn money from them. If so it would be good do do a video for each post saying the same stuff as you’ve written and put it in the post. Then you’ll earn there too

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That is a very interesting idea. I believe I'm going to go ahead and start preparing to do this!

Always tag your posts with newbieresteemday as that will get it a lot of attention and if you had tagged this post with newbieresteemday and steembasicincome then it would have been eligible for my contest to win 2 shares in steembasicincome here
https://steemit.com/steembasicincome/@markkennard/2-steembasicincome-shares-giveaway
You could edit the post and change the tags and as long as you resteem my contest you will be eligible to win.

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Thank you for the tip @markkennard. I went ahead and edited the tags on here and just resteemed your post :) Thank you for keeping up with me, I'll make sure the release of Part Five has those tags in it from the very beginning.

I just did a piece on you by the way.

https://steemit.com/steemit/@terminallyill/how-one-strong-link-can-support-the-steemit-chain

Stellar post @terminallyill. I feel I am doing something incredibly well when being mentioned with @davemccoy @markkennard @newbieresteemday @newbiegames! You keeping pretty good company, that mixed with your knowledge and talent you are bringing early on are quite big assets on here as well. Keep up the great work it will be a lot of fun seeing you grow and turn into a success!

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I honestly can't thank you enough @cryptkeeper17 for plugging me into the right crowd and for being a follower of my work. The motivation you guys blessed me with is priceless, let alone the exposure and confidence in my work. I'm hoping the group of us can accomplish big things on Steemit and work together to grow the entire community. I do want to talk to you regarding your curation trail, if you have a chance?

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Wow you're too kind. I would be in no position if it were not for guys like @davemccoy, who pushed the hell out of me with his work ethic. I had the fortune of knowing him the day he started because I started the day before and was chatting with anyone who would say hi. Then after a while I noticed he was everywhere I was going, and started chatting with him about he was doing, he set his stuff up and took off, of course it was only a matter of time. then you got @markkennard who is sharp as heck, picking up everything lightning quick, and also cut out of what @davemccoy did early on as well. So yeah, it's very easy for me to pass on what I can because I have also been lucky as heck to be around these same people. Thanks for the kind words, but just keep doing what you're doing, ask a question anytime, and if you think you didn't get the answer you wanted, keep asking, lol.

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Man, that's awesome to have been able to start with those guys! That's one heck of an honor I'd imagine. How long have you been using Steemit?