What is a Bitcoin and How it differs from other Currencies?

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This Topic Includes Answers to the Following Questions

What Exactly Bitcoin Means?
What are the Pros and Cons of Bitcoin Currency?
How to Send and Receive Bitcoins?
How to Confirm the Transaction of Bitcoin Payment?

Definition of Bitcoin:

what is a bitcoin

In simple sense, Bitcoin is one type of Digital Currency and also a Payment System which is classified under Crypto-Currency. Bitcoin was introduced on 31st of October in the year of 2008 and released as Open-Source in the year of 2009. Bitcoin was invented by unidentified programmer or group of programmers under the name of Satoshi Nakamoto.

This Bitcoin System is Peer-to-Peer (P2P) and transactions take place in between the users directly without an Intermediary.

Usage of Bitcoin Currency and Bitcoin Payment System across the globe:

Bitcoin Usage Around the World

Advantages and Disadvantages of Bitcoin Currency:

If you come across the Pros (Advantages) and Cons (Disadvantages) of Bitcoin then you will find more advantages than its disadvantages.

Pros:

  • Easy to purchase Bitcoins.
  • No limits for Bitcoins. Anyone can buy any number of Bitcoins they want. The Best way to store a lump-sum amount of money in terms of Bitcoins.
  • Transactions take place with an ease and within seconds.
  • Trading with Bitcoins is easy. The Bitcoin rates fluctuate within minutes.
  • Privacy is at high extent. There is no need of any kind of personal details or bank account details for Bitcoin transactions.
  • Transaction ID will be provided after the confirmation of transaction which serves as Proof for your Transaction.
  • Bitcoins can be used for purchasing items at the Online Stores/vendors offering the Bitcoin Payment System.

Cons:

  • Confirmation of Transaction needs time and it is usually in between 30 minutes to 1 hour. You need to wait for Transaction Confirmation to get Transaction ID.
  • There are no Intermediates acting in between the Transactions, I mean to say is “Refunds” doesn’t works here. You have to request the seller to re-transfer / refund the bitcoins to your Wallet Bitcoin Address.
  • Doesn’t comes under or operated by any Government. The transactions are peer-to-peer i.e., in between users only.

Buying / Selling / Receiving Bitcoins:

In order to buy, sell or receive a Bitcoin, what you need is a “Bitcoin Wallet Address“. There are numerous sites from where you can get your own Bitcoin Wallet Address. Most widely used websites for Bitcoins are Local Bitcoins and Coin Base.

The Below Graph represents the growth and usage of Bitcoins Wallet Addresses for every quarter.

New Bitcoin Wallet Address Added Every Quarter

You have to create an account on their sites so as to get your own Bitcoin Wallet Address. From then you can share your Wallet Address to your Friends or Public so as to receive or collect Bitcoins from them.

In the Similar Way, If you want to buy bitcoins, then the seller will ask your Wallet Address for transferring Bitcoins to your Waller. The same procedure takes place during selling, you need to transfer the Bitcoin to the Buyer Wallet Address upon the transaction confirmation.

Do you know how Bitcoin Wallet Address Looks Like: It is a 32-Digits String mixed up with Letters and Numbers. It is not possible to remember Bitcoin Wallet Address of anyone. Thus you have to just copy down the Wallet addresses depending on the needs.

Confirmation of Bitcoin Transactions:

Bitcoin Transaction takes place usually within seconds but you won’t get the transaction confirmation at the very next second. The Bitcoin Transaction Confirmation requires nearly 30 minutes to 1 hour of time.

Do you know why it takes time for Confirmation: Bitcoin transactions are made by digitally exchanging heavily encrypted hash codes across a peer-to-peer (P2P) network. The P2P network monitors and verifies the transfer of Bitcoins between users. Monitoring and Verification of Transaction requires a lot of time. Moreover some hundreds to thousands of Bitcoin transaction occurs within second all over the world.

Thus this process usually requires time. Bitcoin transactions were recorded in a public distributed ledger called the Blockchain, which uses bitcoin as its unit of account. Thus you can verify and confirm the transaction at any time by using the sites providing Blockchain Info. You can get even the Transaction ID from such Blockchain Info providing sites.

One of the best site providing information on Bitcoin Transactions is Block Chain Info.

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