10 things you should know about Bitcoin digital currency
Bitcoin Digital currency talk
Bitcoin digital currency is part of every conversation about the future of technology, economics, and the internet. The future of digital currencies remains a controversial topic. After reading these 10 things to know about the confusing world of digital currencies, you should feel confident about joining the conversation.
10 Bitcoin digital currency tips:
1. The difference between virtual, digital, and cryptocurrencies
The reason why virtual currencies are on the increase, is because of trust issues with financial institutions and digital transactions. Not everyone considers virtual currencies “money”, furthermore virtual currencies are independent of traditional banks and could eventually pose competition for them.
First of all, there are three terms that are sometimes used interchangeably that we need to sort out: virtual currency, digital currency, and cryptocurrency.
Virtual currency was defined in 2012 by the European Central Bank as “a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.”
Digital currency operates like traditional currency, but does not have all the same attributes — as in, it doesn’t have legal tender. – The US Department of Treasury said in 2017
Digital currency, however, is a form of virtual currency that we create and store electronically. Some types of digital currencies are cryptocurrencies, but not all of them are.
So that leads us to the more specific definition of a cryptocurrency, which is a subset of digital currencies that uses cryptography for security so that it is extremely difficult to counterfeit. A defining feature of these is the fact they are not issued by any central authority.
2. Where does Bitcoin come from?
Bitcoin is a cryptocurrency, a number associated with a Bitcoin address. In 2008, a programmer (or group of programmers) under the pseudonym Satoshi Nakamoto published a paper describing digital currencies. Then in 2009, it launched software that created the first Bitcoin network and cryptocurrency.
3.Why create Bitcoin digital currency?
Bitcoin was created to take power out of the hands of the government and central bankers, and put it back into the hands of the people.
4. Other types of bitcoin digital currency variants we term “altcoins”
There are other types of digital currencies, though we don’t hear much about them. The next most popular is probably Litecoin, which is accepted by some online retailers. It was inspired by Bitcoin and is nearly identical, but it was created to improve upon Bitcoin by using open source design.
There are many other types of cryptocurrencies, such as Peercoin, Ripple, Mastercoin, and Namecoin. Cryptocurrencies get some flack because they are often replicates of other versions, with no real improvements.
5. Bitcoin digital currency regulations
Who is in charge of the Bitcoin digital currency? Bitcoin and most other digital currency is not in any central control, but the legal position differs in every country. Law enforcement and tax authorities are concerned about the use of this cryptocurrency because of its anonymity and the ease of using it for money laundering and other illegal activities. Many countries are still deciding how they will tax virtual currencies.
6. How to get Bitcoin
There are three ways you can get Bitcoins: buy them on an exchange like ICE3X accept them for products and services, and mine them.
- It’s like mining for gold, just on the computer. You need a Bitcoin wallet and specific software, which is free and open source. The most popular is GUIMiner, which searches for the special number combination to unlock a transaction. The more powerful your PC is, the faster you can mine. In the early days, it was easy to find Bitcoins, and some people found hundreds of thousands of dollars worth of the cryptocurrency using their computers. Now, though, more expensive hardware is required to find them.
- Each Bitcoin block chain is 25 Bitcoin addresses, so it takes a lot of time to find them on your own. The exact amount of time ranges depending on the hardware power, but mining all day could drive your energy bill up and only mine a tiny fraction of a Bitcoin — it may take days to mine enough to purchase anything.
- To tackle that problem, there are now mining pools. Miners around the world can band together to combine the power of their computer systems and then share the profits between participants. The most popular one is Slush’s Pool, where smaller, more steady payouts are given instead of a lump sum.
7. How to store Bitcoins
To start, download a Bitcoin wallet. There are many websites where you can download an app on your phone or computer to store Bitcoins.
To store the Bitcoins, you have four options:
- Desktop wallets leave you responsible for protecting the currency and doing your own backups.
- Mobile wallets allow you to travel with the Bitcoins anywhere, and you are responsible for them. Mobile apps allow you to scan a QR code or tap to pay.
- A Web wallets to send and receive transactions through a third party service provider. Caution: By doing this, you run the risk of losing the Bitcoins, if anything happens on their side or hackers gain entry to their site. Extra backups and secure passwords is your best defence in this case and always a must.
- Hardware Wallets are a special type of bitcoin wallet which stores the user’s private keys in a secure hardware device. They have major advantages over standard software wallets, which is that they store private keys in a secure area of a micro-controller. You cannot transfer it out of the device in plain text. This is the most trusted and secure way to store your bitcoins. Isolate your private keys into the safety of TREZOR and enjoy Bitcoin without risk. The best protection at no cost to your convenience.
8. Where you can use Bitcoin
There are many places you can use Bitcoin to purchase products or services. There’s no real rhyme or reason to the list, which includes big corporations and smaller, independent retailers including bakeries and restaurants. You can also use the currencies to buy flights, train tickets, and hotels. Best thing to do is ask Google, and figure out where you can use your Bitcoins in the country you are in.
9. Where can I learn to trade Bitcoin?
iceCUBED firmly believe that, to get the most out of our platform, education is key. This is why they released the Trading School series.
Here they will take you through, from beginner to advanced, everything you need for a complete Bitcoin and Altcoin trading education. Their aim is to equip you with the training and special skills you need to become a successful trader on iceCUBED and in digital currency markets.
10. The future of cryptocurrency
With businesses jumping on the bandwagon and investors becoming interested in cryptocurrency, look for momentum to grow, but it will take time for the situation to stabilize as governments, the international community, and the people of the internet decide on how the next generation of currency will transition to a digital world.