In the ever-evolving landscape of cryptocurrency, one name stands out as the pioneer that sparked a revolution: Bitcoin. Since its inception in 2008 by an individual or group using the pseudonym Satoshi Nakamoto, Bitcoin has grown to become the world's foremost digital currency, celebrated for its autonomy, security, and potential as a store of value.
Often referred to as 'digital gold’, Bitcoin has captivated the financial world. In this comprehensive beginner's guide, we delve into its fundamentals.
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BEGINNER'S GUIDE TO BITCOIN
What Is Bitcoin & How Does It Work?
Bitcoin is the world’s most widely accepted cryptocurrency, allowing for secure and seamless peer-to-peer transactions.
BEGINNER
How to Buy, Store & Send Bitcoin?
From secure Bitcoin wallets to the how the process of sending and receiving BTC actually works – this article explains the how tos of Bitcoin.
What Is Bitcoin Halving?
About every four years, the amount of Bitcoin rewards is halved. Here is how this has affected Bitcoin price.
About every four years, the amount of Bitcoin rewards is halved. Here is how this has affected Bitcoin price.
What Is Bitcoin Worth?
The price of BTC has experienced highs and lows since it launched in 2009. Here’s why Bitcoin is also known as digital gold and holds value.
The price of BTC has experienced highs and lows since it launched in 2009. Here’s why Bitcoin is also known as digital gold and holds value.
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BTC
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What is Bitcoin?
- Bitcoin (BTC) is a peer-to-peer (P2P) digital currency system conceived in 2008 by an anonymous person or group with the moniker Satoshi Nakamoto.
- Using the Proof of Work (PoW) consensus mechanism, the network rewards miners for maintaining the system.
- Bitcoin is the first fully autonomous and self-sustaining payment network, where no single party can intervene in or terminate it.
- Since the inception of Bitcoin, hundreds of thousands of altcoins have been created, each offering its own use cases and benefits.
- Bitcoin is also referred to as ‘digital gold’ by some, as only a finite supply of Bitcoin exists and can be mined.
Learn more about the world’s biggest cryptocurrency in this beginner’s guide to Bitcoin.
Who Created Bitcoin?
Bitcoin was created by an individual or group of individuals using the pseudonym Satoshi Nakamoto. The true identity of Satoshi Nakamoto remains unknown; there has been much speculation and investigation over the years, but no conclusive evidence has surfaced regarding Nakamoto’s true identity.
The Bitcoin White Paper
Nakamoto published the Bitcoin white paper, titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’, in 2008, and released the first version of the Bitcoin software in 2009. Work continued on the project, communicating with the early Bitcoin community, before Nakamoto eventually disappeared from public view in 2010.
Read the Bitcoin white paper here, written by Satoshi Nakamoto.
How Does Bitcoin Work?
Bitcoin uses blockchain technology, and one of blockchain’s main features is the way it records data, which is:
Bitcoin was the first application to utilise blockchain technology (even though the term ‘blockchain’ was introduced after Bitcoin). There are two main stakeholders in the Bitcoin system: regular users, who can access the system to make transactions, and miners, who work behind the scenes to power and maintain the network.
- Immutable
- Transparent
- Decentralised
Bitcoin was the first application to utilise blockchain technology (even though the term ‘blockchain’ was introduced after Bitcoin). There are two main stakeholders in the Bitcoin system: regular users, who can access the system to make transactions, and miners, who work behind the scenes to power and maintain the network.
Miners run computers, called ‘nodes’, with a lot of processing power in order to store data, handle and broadcast transactions, and solve a complex mathematical puzzle in order to mine new ‘blocks’ on the blockchain, which contain recent transactions. Every time someone sends a transaction to the Bitcoin network, miners pick up the transaction and complete the steps above behind the scenes.
Miners do not volunteer to maintain this decentralised network for free, however. They are incentivised to do so by receiving mining rewards and transaction fees upon completing the equation and validating transactions. Their reward for creating new blocks comes in the form of newly minted Bitcoin, which is why the process is called mining.
Miners do not volunteer to maintain this decentralised network for free, however. They are incentivised to do so by receiving mining rewards and transaction fees upon completing the equation and validating transactions. Their reward for creating new blocks comes in the form of newly minted Bitcoin, which is why the process is called mining.
To gain a deeper understanding of the technological aspects of Bitcoin, check out this introduction to how Bitcoin works.
“Every informed person needs to know about Bitcoin because it might be one of the world’s most important developments.”
— Leon Luow
What is Bitcoin Worth?
The current price of Bitcoin in US$ is:
BTC
=
$0.000000 USD
However, BTC has experienced highs and lows since it launched in 2009. Bitcoin hit the US$100 mark in 2013, four years after going public. In 2021, BTC surged to its current all-time high (ATH) price of over US$68,789. Since then, it has mainly traded above US$20,000. Its most recent low was in November 2022, when it traded around US$17,600 for most of the month.
Learn more about Bitcoin price, its value, and recent price trends on the Bitcoin Price page.
How to trade Bitcoin?
Users can purchase Bitcoin in the Crypto.com App and on the Crypto.com Exchange. Payment options include bank transfer, credit/debit cards, and other cryptocurrencies. Once bought, users can store their newly acquired bitcoins in the Crypto.com App that doubles as a crypto wallet, or other software and hardware crypto wallets.
Learn more about buying Bitcoin here.
What Is the Safest Way to Store Bitcoin?
Bitcoin is always recorded on the Bitcoin blockchain, but ownership of bitcoins is determined via a private key, which is usually stored in a Bitcoin wallet. Wallets are software programmes or hardware devices that allow users to securely store, send, and receive bitcoins.
There are several types of wallets available, each with its own level of security and convenience. These include hot wallets, which are apps connected to the internet, and cold wallets, which are usually hardware devices that securely store BTC offline.
There are several types of wallets available, each with its own level of security and convenience. These include hot wallets, which are apps connected to the internet, and cold wallets, which are usually hardware devices that securely store BTC offline.
Read more about the different types of crypto wallets here.
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A non-custodial wallet that gives you access to a full suite of DeFi services in one place.
How to Send Bitcoin
To send Bitcoin, you need a Bitcoin wallet and the recipient's Bitcoin address. Here are the steps to send Bitcoin:
- Log into your Bitcoin wallet.
- In your wallet, navigate to the ‘Send’ option.
- Enter the recipient's Bitcoin address. It is a long string of alphanumeric characters, typically starting with a '1' or '3'.
- Enter the amount of Bitcoin you want to send. Be mindful of transaction fees, which vary depending on network congestion and wallet settings.
- Once you are certain the details are correct, click on the ”Send“ button to initiate the transaction.
- Bitcoin transactions require confirmation from the network. Depending on network congestion, this process may take a few minutes to several hours.
- Once the transaction is confirmed, the recipient will receive the Bitcoin in their wallet.
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How Can I Use Bitcoin?
Below are some popular ways people say they use Bitcoin:
Online Purchases
Online Purchases
- Some online retailers and businesses accept Bitcoin as a form of payment for goods and services.
- You can use Bitcoin to buy products ranging from electronics to gift cards and even travel services.
Trading
Trading
- Many people view Bitcoin as a speculative asset, aiming to benefit from price fluctuations.
- You can buy and hold Bitcoin long-term or engage in short-term trading on cryptocurrency exchanges.
International Transfers
International Transfers
- Bitcoin enables cost-effective and faster cross-border money transfers compared to traditional financial systems.
- This can be especially useful for sending money to family members or friends in different countries.
Donations and Fundraising
Donations and Fundraising
- Some charitable organizations and nonprofit entities accept Bitcoin donations.
- Cryptocurrency can streamline the donation process and offer transparency in how funds are used.
Hedging and Store of Value
Hedging and Store of Value
- Some traders use Bitcoin as a hedge against traditional financial assets like stocks and bonds.
- Bitcoin's limited supply and decentralized nature have led some to consider it a digital store of value, similar to gold.
Gaming and Digital Goods
Gaming and Digital Goods
- Some gaming platforms and online marketplaces accept Bitcoin for purchasing in-game items, digital goods, and services.
Microtransactions and Tips
Microtransactions and Tips
- Some charitable organizations and nonprofit entities accept Bitcoin donations.
- Cryptocurrency can streamline the donation process and offer transparency in how funds are used.
DeFi (Decentralized Finance)
DeFi (Decentralized Finance)
- Bitcoin's scripting capabilities enable simple smart contracts, though it's less advanced compared to some other cryptocurrencies.
- In the wider blockchain ecosystem, various projects offer decentralized financial services like lending, borrowing, and yield farming using Bitcoin.
It's important to note that, while Bitcoin offers these use cases, its value and legal status can vary by region and change over time.
Mining
Bitcoin mining is the process of using powerful computers to solve complex mathematical puzzles, validating and bundling transactions into blocks, and adding them to the public ledger called the blockchain.
Learn more about Bitcoin Mining
Bitcoin Terms to Know
Bitcoin Mining
Bitcoin mining is the process of using powerful computers to solve complex mathematical puzzles, validating and bundling transactions into blocks, and adding them to the public ledger, called the blockchain.
Learn more about how Bitcoin mining works in this article.
Bitcoin Mining
Bitcoin Halving
Bitcoin is programmed to a total maximum supply of 21 million BTC, and about every four years, the amount of Bitcoin rewards for mining is halved. This periodic decrease in the rate of bitcoins issued into circulation is called ‘Bitcoin halving’ and can push BTC price up.
In 2012, the reward was 25 bitcoins per block, and in 2016, it decreased to 12.5 bitcoins per block. As of early 2023, miners are rewarded 6.25 bitcoins per block mined.
The next Bitcoin halving is estimated for 2024. Learn more about Bitcoin halving
Bitcoin Halving
Bitcoin Dominance
Bitcoin dominance is the ratio of Bitcoin’s market capitalisation to the overall market cap of all cryptocurrencies. It serves as a metric used by crypto traders in trying to get a pulse of the market, spot possible trends and trading opportunities, and understand trends in the larger crypto market.In 2012, the reward was 25 bitcoins per block, and in 2016, it decreased to 12.5 bitcoins per block. As of early 2023, miners are rewarded 6.25 bitcoins per block mined.
More about Bitcoin Dominance.
Bitcoin Dominance
Trading Bitcoin
In a nutshell, Bitcoin trading involves monitoring the market for price fluctuations and executing buy or sell orders accordingly. More advanced trading options are offered beyond simple buy and sell orders; for example, long and short positions, and derivatives (like futures and options).
To learn more about Bitcoin trading options, check out this article.
Due Diligence and Do Your Own Research
All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy or sell any digital assets. Returns on the buying and selling of digital assets may be subject to tax, including capital gains tax and/or income tax, in your jurisdiction or the jurisdictions in which you are resident for tax purposes. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.In addition, the Crypto.com Exchange and the products described herein are distinct from the Crypto.com Main App, and the availability of products and services on the Crypto.com Exchange is subject to jurisdictional limits. Before accessing the Crypto.com Exchange, please refer to the following links and ensure that you are not in any geo-restricted jurisdictions for Spot Trading and Margin Trading.
Past performance is not a guarantee or predictor of future performance. The value of digital assets can go down as well as up and you could lose all or a substantial amount of your purchase price. When assessing a digital asset, it’s essential for you to do your own research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.
More on Bitcoin
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What is Bitcoin Halving?
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What is Bitcoin Halving?
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What is Bitcoin worth?
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What is Bitcoin worth?
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How to trade Bitcoin?
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How to trade Bitcoin?
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Frequently Asked Questions
Cryptocurrency is a digital or virtual currency that operates on distributed ledger technology called a blockchain and uses cryptography for security. It is decentralized and operates independently of a central bank.
Unlike traditional currencies, cryptocurrencies are not backed by a physical commodity or government, and their value is determined by market demand and supply. Cryptocurrencies can be used to buy goods and services, transfer funds, and trade in markets. Popular cryptocurrencies include Bitcoin, Ethereum, Litecoin, Ripple, and Cronos.
Many cryptocurrencies, like Bitcoin, are created through a process called mining, which involves solving complex mathematical equations to validate and record transactions on a blockchain. This mechanism is also called Proof of Work (PoW). Another consensus mechanism that has increased in popularity — as it is more energy efficient — is Proof of Stake (PoS). Instead of mining, PoS relies on network participants validating transactions. Ethereum, the second-largest cryptocurrency, uses this consensus mechanism.
Unlike traditional currencies, cryptocurrencies are not backed by a physical commodity or government, and their value is determined by market demand and supply. Cryptocurrencies can be used to buy goods and services, transfer funds, and trade in markets. Popular cryptocurrencies include Bitcoin, Ethereum, Litecoin, Ripple, and Cronos.
Many cryptocurrencies, like Bitcoin, are created through a process called mining, which involves solving complex mathematical equations to validate and record transactions on a blockchain. This mechanism is also called Proof of Work (PoW). Another consensus mechanism that has increased in popularity — as it is more energy efficient — is Proof of Stake (PoS). Instead of mining, PoS relies on network participants validating transactions. Ethereum, the second-largest cryptocurrency, uses this consensus mechanism.
Bitcoin is a cryptocurrency that operates on a peer-to-peer (P2P) network. It was created in 2009 by an unknown person or group using the pseudonym Satoshi Nakamoto. Bitcoin is the first and most well-known cryptocurrency, and it has gained significant popularity and value since its creation.
Unlike traditional fiat currency, which is controlled by central banks and governments, Bitcoin operates independently of any central authority. Transactions are verified and recorded on the blockchain, which is a distributed ledger that maintains a permanent and transparent record of all transactions.
Bitcoin can be bought, sold, and exchanged on various cryptocurrency exchanges, and it can be used to purchase goods and services from merchants that accept Bitcoin as a form of payment. The supply of bitcoins is limited to 21 million units, and new bitcoins are created through mining, which involves using specialized computer hardware to solve complex mathematical equations.
Bitcoin is known for its high volatility, and its value can fluctuate rapidly in response to market conditions, news events, and other factors. Many traders, including institutional investors, see Bitcoin as a store of value and a way to participate in the growing cryptocurrency ecosystem.
Unlike traditional fiat currency, which is controlled by central banks and governments, Bitcoin operates independently of any central authority. Transactions are verified and recorded on the blockchain, which is a distributed ledger that maintains a permanent and transparent record of all transactions.
Bitcoin can be bought, sold, and exchanged on various cryptocurrency exchanges, and it can be used to purchase goods and services from merchants that accept Bitcoin as a form of payment. The supply of bitcoins is limited to 21 million units, and new bitcoins are created through mining, which involves using specialized computer hardware to solve complex mathematical equations.
Bitcoin is known for its high volatility, and its value can fluctuate rapidly in response to market conditions, news events, and other factors. Many traders, including institutional investors, see Bitcoin as a store of value and a way to participate in the growing cryptocurrency ecosystem.
There are several ways to buy cryptocurrencies, including:
- Brokerage services: Crypto brokers allow users to simply buy and sell cryptocurrencies. A popular example is the Crypto.com App, trusted by over 80 million users. It is available at the Apple Store and on Google Play.
- Cryptocurrency exchanges: These are online platforms where users can buy, sell, and trade cryptocurrencies using fiat currency or other cryptocurrencies. They offer more complex functions compared to a crypto brokerage, adding trading instruments like crypto derivatives. The Crypto.com Exchange is an example of a popular crypto exchange.
- Peer-to-peer (P2P) marketplaces: These are platforms where buyers and sellers can directly trade cryptocurrencies without the involvement of a third-party exchange. This is also known as DeFi, short for decentralized finance. Multiple P2P crypto marketplaces can be accessed all in one app via the Crypto.com DeFi Wallet.
To buy crypto, follow these general steps:
- Choose a crypto platform to use, like the Crypto.com Exchange or Crypto.com App.
- Create an account on the chosen platform by providing personal information and ID verification, also known as ‘Know Your Customer’ (KYC) procedures.
- Deposit fiat currency or another cryptocurrency into the newly created account. The Crypto.com App supports bank transfers, credit cards, debit cards, and cryptocurrency transfers to buy crypto, depending on region.
- Navigate to the ‘Buy’ section of the Crypto.com Exchange or App and select the crypto to buy.
- Enter the amount of cryptocurrency to buy and confirm the transaction.
- The crypto will be deposited into the account. From here, it can be transferred to other crypto wallets or converted back to fiat currency and paid out to a bank account.
Users can buy Bitcoin from a cryptocurrency exchange, a crypto brokerage service like the Crypto.com App, or a peer-to-peer (P2P) marketplace like those found in the Crypto.com DeFi Wallet. Here are some general steps to buying bitcoin from an exchange or brokerage service:
- Choose a reputable cryptocurrency platform that supports Bitcoin trading. Popular options include the Crypto.com App and the Crypto.com Exchange.
- Create an account on the chosen platform and complete the KYC verification process, which may require providing personal identification documents.
- Fund an account using a bank transfer, credit/debit card, or other cryptocurrency, depending on region.
- Navigate to the ‘Buy’ section of the platform and select Bitcoin as the cryptocurrency to buy.
- Enter the amount of bitcoin to buy, or the amount of fiat or cryptocurrency to spend.
- Review the transaction details and confirm the purchase.
- Once the transaction is complete, the bitcoin will be deposited into the chosen account. From here, the funds can be transferred to other crypto wallets or converted back to fiat currency and paid out to a bank account.
To trade cryptocurrency, follow these general steps:
It is crucial to note that trading cryptocurrency carries risk, and it is important to trade only what you can afford to lose.
- Choose a cryptocurrency exchange that supports trading. A popular option is the Crypto.com Exchange.
- Create an account on the chosen platform and perform ID verification, known as KYC (‘Know Your Customer’).
- Deposit funds into the newly created account using a supported payment method. The Crypto.com Exchange supports bank transfers and credit/debit cards.
- Navigate to the trading section of the platform and select the cryptocurrency pair to trade.
- Choose whether to buy or sell the cryptocurrency, and enter the amount to trade.
- Set the preferred price and order type. There are several types of orders, including market orders, limit orders, stop orders, and crypto options, which allow users to buy or sell at a specific price or under certain conditions.
- Submit the trade order and wait for it to be executed. Depending on market conditions, the trade may be filled immediately, or it may take time to be filled.
- Monitor trades and adjust strategies as necessary.
It is crucial to note that trading cryptocurrency carries risk, and it is important to trade only what you can afford to lose.
There are several ways to earn cryptocurrency, including:
- Mining: Cryptocurrency mining involves using specialized computer hardware to solve complex mathematical equations that validate transactions on a blockchain network. Successful miners are rewarded with newly minted cryptocurrency for their efforts.
- Staking/Lockups: Staking and lockups involve holding or locking up a certain amount of cryptocurrency in a wallet or on a platform to support the operations of the blockchain network. Stakers are rewarded with new cryptocurrency as a form of interest for their support.
- Trading: Trading cryptocurrency involves buying and selling cryptocurrencies on exchanges or other trading platforms. Those who have a good understanding of market trends and are able to make informed trading decisions can earn profits through trading.
- Airdrops: Airdrops are free distributions of cryptocurrency to users who meet certain criteria or participate in promotional activities.
- Crypto Projects: Some blockchain projects offer rewards or bounties for users who contribute to their development or community. This can include activities like bug bounties, testing, or content creation.
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