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What is Bitcoin

What is Bitcoin

What is Bitcoin? Hi, welcome to Cryptogloria. Your cryptocurrency channel This time well talk about Bitcoin. Bitcoin is a type of cryptocurrency. And its main feature is it was the first cryptocurrency.

Thats why its the most famous one. We will now define and explain what a cryptocurrency is. A cryptocurrency is a digital asset designed for transactions. Its main advantages when compared to banks, debit cards or other kinds of traditional payment systems… …is theres no company or government interfering or managing it. An advantage we get with this is we can make big exchanges with short times.

We can also use this currency in trading. Sure, you could use cryptocurrencies as invesments, as money transfers… …and there are also other cryptocurrencies that can deal with much more sofisticated transactions. For instance, it could transfer money from one place to another only if an event is triggered. Such as, the dollar appreciating a certain amount or if some goverment has issued new bonds. The very first step to use Bitcoin is to create a wallet.

There are different kinds of wallets. You could download an app to your PC or cell phone. And manage our currency from there. We could have 0.5 Bitcoins, for instance. Theres no need to have a whole Bitcoin if you want to start investing.

Exactly, often people ask How much is a Bitcoin? And currently Sep.2017 its oscillating 4200 USD. So the first thing they say is Thats way too much!

I cant spend 4200 in Bitcoin! Theres no problem. You can buy 0.1 BTC Bitcoin or 0.001 BTC or whatever we might need.

We can buy 1 worth of Bitcoin and keep it stored. As Esteban said, currently the exchange rate is about 4100 per Bitcoin. But it wasnt always like that. At the beginning in year…

Was it 2010 when it was released? It was in 2008. In 2008, when it just came out, Bitcoin was around a penny. Or even less.

It didnt have value, it was a new concept. A lot of people didnt understand it. Id wager most of us werent aware what we could use Bitcoin in.

Precisely because theres no government or company behind it. So it was like Why would I buy this? This doesnt have any kind of value. Exactly. In fact, theres a story about some pizza, right?

I think it was the first time purchase in Bitcoin. Or at least, the first widely known. And its famous… …because they paid 10, 000 Bitcoins for 2 pizzas. 10, 000 Bitcoins…

Crunch the numbers: each Bitcoin is currently at 4100. That delivery guy is in Miami Beach now. If that delivery guy isnt managing the world from the shades, he mustve spent everything in cruises and other hedonistic pleasures. What we want to say is that its a very promising currency as a long term investment.

Now its September 2017. Just two months ago Bitcoin was 2100. Yeah, just a little more than a month ago it was that much.

In less than a month it went up more than 100 its worth. Its quite common for an investment to duplicate in just a couple of months. This volatility also has the disadvantage we dont know whats going to happen. If you buy at 4000 theres no guarantee Bitcoin will appreciate any more. It might as well be worth 2000, 1000 or there could be a crisis.

Nobody knows. Its volatile thats why we always need to invest what we are willing to lose. On top of being volatile, its growing at huge steps. Some businesses in the US accept Bitcoin as payment. If you see it long term then its not that advisable to pay with Bitcoins, since a hamburger is a fraction of a Bitcoin.

And that business could double its worth in just a month. But its also like a virtuous circle, since when more people get to use Bitcoins for every day transactions… …then the public will understand Bitcoin could be useful as a replacement of a payment system and that will make its value go up. So, depending on what we want to do we could spend it or not, and that will make its price to fluctuate.

What we want to say is Bitcoin is the future. Bitcoin or cryptocurrencies in general. I wouldnt particularly say Bitcoin is the future. It might or might not be.

What is Bitcoin

But yes, cryptocurrencies will be the future. And no matter what, Bitcoin will always be the cryptocurrencies father. Yes, its father, that is, the first cryptocurrency was Bitcoin. Therefore it will always have the markets focus. In this article were talking about Bitcoin but be aware there are many cryptocurrencies, not just Bitcoin.

Lets remember there are around 1000 currencies. Ethereum, Neo, Zcash, Monero, etc. And when you see this article there will probably be 100 new cryptocurrencies. Surely while were talking theres someone creating a new cryptocurrency. Thats why its impossible to invest in all of them.

For now, the most known is Bitcoin. There are 2 or 3 that are arising though. In this article we will talk only about Bitcoin. And thats what we mean, the one which we all started or will start with.

A typical question is regarding wallets. What is a Bitcoin wallet? We said it could be an app we can download to a computer or a cell phone.

We can also register on some Internet sites and they will keep those wallets for us. A question some might be asking. Is it as safe to store a wallet on the Cloud as it is on my own PC? Most of the time the biggest security hazard is us: the users.

Not as much the operating system or the cell phone. Generally the user needs to maximize cautions in order not to get hacked and have his Bitcoins stolen. If the password is weak, it wont matter if its a computer or a Web site.

You need to use hard to guess passwords. With no relation to our date of birth, for instance. I see that both have pros and cons. For instance, in our computer… …it will always be much safer than what is called the Cloud or a digital platform. But if we keep them in our computer and we lose our passwords, goodbye money!

Whereas if it is stored in the Cloud, we have a recovery system in case we forget our password, such as a security key. Or a code that is sent tou our mailbox or even some authentication with our cell phone. There are many ways to recover it, but the security of a Web site is never the same. It can get hacked. Exactly.

On the other hand, if we have them stored in our computer and our hard disk breaks down, Farewell! Theres no money to recover. Unless we have a backup, which is really important, of course.

Its important to always to a backup of our wallets. Another thing worth mentioning is technically… …our wallets are nowhere. Wallets are just a password that allows us to access the Bitcoin network. And in this way we can get, transfer and use our Bitcoins. Theyre not physically stored in our computers.

What is actually stored is a password. Or a passphrase, which is like a very long password. And that will allow us to access our money. I also wanted to mention theres a third kind of wallet, which is a paper wallet.

This is just a piece of paper with the wallet code. A string of numbers and letters. And we can write that down with pen or pencil and thus access our money. There are different systems and we will get deeper into them afterwards.

For instance, I use my computer but a lot of people might prefer a Web site. Now theres something our viewers might be asking when comparing money to Bitcoin. I know theres more virtual money than real money in the world. For example, someone stores 100 million in a bank but I know that bank… …creates, say, 10 billion, and most of that money is actually virtual. Bitcoin has a cap on the total amount of circulating currency.

Its not possible to create 30 billion Bitcoins. I think the limit is 24 millions Actually 21 millions There are currently 16 millions but isnt the theoretical cap of 24? The thing is there were splits but well see that later. The current real circulating amount of Bitcoins is 16 and a half millions. Well later explain there are many different systems to obtain Bitcoin, such as mining.

We ask you to see our next articles. I hope you like it. In the next articles well see where we can buy Bitcoins. For instance, where they accept them, if trading is profitable…

If you want to buy another cryptocurrency in order to invest, about 80 will only take Bitcoin for that transaction. Wed like you to leave comments with your inquiries and doubts. And any question regarding this topic, which is wide. We tried to be as short as possible but we know there are always more things to talk about. Thats why wed love it if you can help us by leaving doubts and questions in the comments.

Please, criticism is always welcome. Thank you. See you next time.

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