The Bitcoin world is abuzz with both excitement and curiosity… and the opportunity for upside potential to skyrocket. Everyone from everyday Joes to reputable experts is betting on Bitcoin’s success.

It’s been a wild 10 years since Bitcoin’s release. Most notably, we’ve seen headlines of people who fortuitously purchased bitcoins early on turn into kid-millionaires. With the immense potential of new cryptocurrencies, our attention often turns to Bitcoin as a quintessential example of what’s to come.

We’ve designed this guide to teach you about Bitcoin so that you’re up to speed and ready to join the crypto-world.

What is Bitcoin?

Released as an open-source software in 2009, Bitcoin is often credited as the world’s first cryptocurrency and is best defined as a digital currency that only exists electronically.

Bitcoin is decentralized, meaning it doesn’t have a central issuing authority or political institution that controls the amount of bitcoin in circulation. But the Bitcoin platform is far from anarchy.

The whole process is pretty simple and organized: Bitcoin holders are able to transfer bitcoins via a peer-to-peer network. These transfers are tracked on the “blockchain,” commonly referred to as a giant ledger. This ledger records every bitcoin transaction ever made. Each “block” in the blockchain is built up of a data structure based on encrypted Merkle Trees. This is particularly useful for detecting fraud or corrupted files. If a single file in a chain is corrupt or fraudulent, the blockchain prevents it from damaging the rest of the ledger.

Instead of relying on a government to print new currency, Bitcoin’s blockchain programming handles when bitcoins are made and how many are produced. It also keeps track of where bitcoins are and ensures the transactions are accurate.

There are currently about 17 million bitcoins in circulation. There isn’t a central regulatory agency or government controlling the supply of bitcoins, meaning the supply is controlled by design. The total supply to ever be created is capped at 21 million bitcoins.

This cap raises an argument that Bitcoin could have problems scaling. However, since Bitcoin is essentially infinitesimally divisible (meaning users can transfer as little as 0.00000001 bitcoins), this doesn’t really create a scaling issue. The magic number of 21 million is arbitrary.

It’s believed that Bitcoin was designed to become a deflationary currency to combat the government’s use of inflation as a hidden taxation to redistribute earned wealth. Many people praise Bitcoin for empowering the people by overthrowing the currency printing powers of transient politicians.

How Does Bitcoin Work?

One of Bitcoin’s most appealing features is its ruthless verification process, which greatly minimizes the risk of fraud. Since Bitcoin is decentralized, volunteers—referred to as “miners”—constantly verify and update the blockchain. Once a specific amount of transactions are verified, another block is added to the blockchain and business continues per usual.

Bitcoin Wallets: How to Store Your Bitcoins

So, you’ve got this digital currency. You can’t really chuck it in your pocket. Let’s go through some useful definitions before we jump into storing cryptos:

1. Exchange platform: where you trade money for cryptocurrencies such as Bitcoin, Ethereum, or Litecoin. You can also trade one cryptocurrency for another.
2. Wallet platform: essentially a bank account where your cryptocurrencies are kept.
3. Hard wallet: an “offline” wallet that is not linked to a network.
4. Public Cryptographic Key: your account number. Similar to how someone would send money to your bank account via your account number, your public cryptographic key is the information you give to someone to receive cryptos.

Now that we’ve got that out of the way, we can discuss Bitcoin wallet better.

Why use Bitcoin?

Bitcoin is often hailed as the future of the monetary world for a variety of reasons.

• It’s decentralized and brings power back to the people.
  • Launched just a year after the 2008 financial crises, Bitcoin has attracted many people who see the current financial system as unsustainable. This factor has won the hearts of those who view politicians and government with suspicion. It’s no surprise there is a huge community of ideologists actively building, buying, and working in the cryptocurrency world.
• Freedom. 
  • The concept that one could carry millions or billions of dollars in Bitcoin across borders, pay for anything at any time, and not have to wait on extended bank delays is a major selling point.
• Security. 
  • Bitcoin payments don’t necessarily need to be tied to one’s personal information. Since personal information is left out of the transactions, users aren’t as exposed to threats such as identity theft. Bitcoin can also be backed up and encrypted to ensure the security of your money.
• Low Transaction Fees
  • Banks and companies like PayPal charge to send and receive money. Bitcoin replaces the 2.5% “transaction fee” with one that’s only a fraction of that.

The Immutable Ledger. Bitcoin’s blockchain public ledger is objective. People trust it to be fair because it is based on pure mathematics, rather than the human error and corruption of questionable politicians.