Bitcoin is a decentralized digital currency, that is based on peer-to-peer network, that is not handled by a central authority such as a central bank or government. Created in 2008 by Satoshi Nakamoto, Bitcoin is now created by miners who run software on special hardware and listens to transactions on the network and confirm them to create a cryptocurrency. This helps to secure the network of the currency while gathering bitcoins in exchange.
Users explain that it allows for secure transactions over the internet due to the blockchain technology that records cryptocurrency transactions in a public manner. By far, bitcoin is the best-known digital asset with the largest volume of trade. A great benefit of bitcoin is that it is exchanged without intermediaries and is trusted in financial institutions.
The motive of bitcoin is to replace the need for traditional payment methods and process different transactions without needing any third parties.
How it works is through a process of mining the cryptocurrency. Essentially, bitcoin is generated by “mining” by spending computing power to handle transactions. This allows anyone, anywhere to become a miner and receive a reward for their mining services.
Key features of Bitcoin every entrepreneur must know
Every entrepreneur, whether a business owner of goods and services or looking to generate bitcoins as a business, needs to understand what Bitcoin is about.
- Value: Bitcoin is used by the individuals as a means of purchasing goods and services instead of money or traditional currencies.
- Security: Bitcoin does not require the sharing of personal data
- Visibility: All bitcoin transactions are available on the Bitcoin blockchain and visible to all.
- Supply: The supply of bitcoin is limited and also predictable.
How can an entrepreneur earn Bitcoin?
Here is how Bitcoin works:
- Transactions made by Bitcoin are not confirmed until they are updated in the general Bitcoin transaction ledger or data centre. This process is known as the blockchain.
- This can be easily updated and controlled by anyone in the public, that is why it is known as a decentralized public ledger.
- People can get help with specialized software and hardware that can help them to update the ledger.
- The right computer will identify the solution that can help to take an action that is pending on bitcoin transactions that can be gathered into a block.
- Once an action is taken, the response will be processed and sent to the bitcoin network.
- The bitcoin network will check to see whether the answer is right or not. If the answer is right, it will be updated to the bitcoin transaction ledger with the name of the block. This cycle is then repeated over and over. It is known as the blockchain.
- The computer which recognizes the correct number will be given an award of Bitcoins and also the fees of transaction.
While anyone from the public can become a miner, it is not easy and requires an understanding of networks and access to specialised computers.
Where can one keep Bitcoins?
The owners of bitcoin usually keep their coins using digital wallets. As this is a digital currency, bitcoins are not physically held; rather they are kept on a platform with a private digital key that permits the access of the person who holds the wallets key. The online address of the bitcoin is the public key.
There are different forms of the wallets that bitcoins can be stored in.
- Hardware Wallet
These are USB like crypto currency gadgets that store your Bitcoins and private keys and are kept offline to avoid hacking.
- Desktop Wallets
Cryptocurrency wallet applications that can be easily downloaded and installed on your PC.
- Mobile Wallets
Mobile wallet app downloaded to your phone.
- Online Wallets
Cloud based wallets and can be operated by many computers at a time. A Cryptocurrency exchange is known to be the common online wallet.
Bitcoin and it’s future:
The cryptocurrency market is very volatile and cannot be predicted. The recent value of Bitcoin went down by nearly 70%, which is one of the largest losses it has seen. This means that Bitcoin owners saw the value of their currency go down, while the payment of mining and receiving bitcoins has been halved. Additionally, the threat of hacking is always looming, making it difficult to let go of regular cash and bank transactions.
Nowadays, bitcoin is still used as payments all over the world on many well-known websites. As an entrepreneur, knowing what the bitcoin market is like, and learning how to handle it, whether as a form of accepted payment in your business or as a miner, make sure you have sufficient information to be able to keep up with its changing value day by day.