Are you a newbie to the Bitcoin world? Here is what you should know

Are you a newbie to the Bitcoin world? Here is what you should know
Are you a newbie to the Bitcoin world? Here is what you should know

Crypto currencies, or digital money were born with the intention of making economic transactions anonymous. Bitcoin is the first crypto currency, the first project that really succeeds. Its launch is produced in 2009 by Satoshi Nakamoto. Cryptocurrencies are basically information within a “file” that allows secure economic transactions. Each Bitcoin contains information on when that currency has been created, transactions made with that currency and who owns that currency.

Within the data that the cryptocurrency possesses, there are some that are public and others are private. Public data is what allows the “network” that supports the cryptocurrency, check data and verify exchanges. In addition to these public data, there are private data that give access to the owner of the cryptocurrency, so you can make use of it. For any information regarding bitcoin, you can visit to Bitcoin Trader. But, here we will give you a static information which will help you to get a basic idea about this digital currency.

How this digital currency works?

The network that makes up Bitcoin and supports it, is made up of nodes. The nodes are interconnected computers of vital importance to the network. Each of them has an accounting book.In that accounting book all transactions are recorded, which are linked to each of the Bitcoins (the famous “blocks”, blockchain technology).Each block within each of the Bitcoins, contains the information, who is the current owner and all the data of the previous owners, etc. Logically, everything is data that does not mention anyone in particular, it is only encoded data.This information is what prevents counterfeit Bitcoin because to counterfeit a Bitcoin, you should be able to modify the information of the entire network, of all the nodes that have the accounting book and to whom the information has been transmitted to them. In this way, Bitcoin is secure, in terms of the identity of who performs transactions and who owns the critics.

Decentralized currencies, social function and original beauty of the idea

Crypto currencies had the original idea of ​​eliminating the power that states have over the economy, reducing economic crises, the result in most cases of some kind of bubble, created by the excessive profit of a few people. The security of real currencies lies with the Central Banks and the States. When we talk about Bitcoin and cryptocurrencies, the security and value of currencies, it falls on the network that is responsible for creating and validating transactions.

That is why it is claimed that crypto currencies are decentralized, there is no single responsible entity, it is the entire network that is responsible for the currency, and power falls to the community.If we stop for a moment to think about this idea, it’s great. Actually the power of the economy and its evolution would fall on society and it would be this, which should decide what measures to take. Some proposals of some cryptocurrencies include the possibility of the community, deciding on various topics of interest, including supporting independent and non-profit projects.

Advantages of investing in Bitcoin

There are many advantages in Bitcoin, some we have seen before – privacy, security, transparency, almost impossible to falsify. But the advantages of the currency itself and the advantages and disadvantages of speculating with it are different. Bitcoins are available to anyone, even without having a clue, there are many ways to speculate with Bitcoin. Its volatility causes many opportunities to earn money. You can speculate with Bitcoin in a leveraged way, thanks to the existence of derivatives which reflect its price and that makes it “easy” for anyone to trade on Bitcoin, even if it does not have $11,000 or $12,000. Your price has nothing to do with the real economy, it can go up or down to infinity. The disadvantages of trading with Bitcoin are exactly the same as its advantages. So, you cannot mark it as disadvantages, but lack of ideas. For example, if you trade with Bitcoin, but you have no idea, you will most likely lose all your money.