In 2009 Bitcoin was implemented as a private initiative. It is not governed by a central monetary authority, unlike conventional currencies such as the euro, the pound and the dollar. Instead, a peer-to-peer network of computers from its users underpins it. This is close to how it works with Skype, a video chat app. check out the post right here for more info.
The basic unit of exchange is the bitcoin. Any bitcoin can however be subdivided into satoshies. One satoshi is one hundred millionth of a bitcoin (ie, a bitcoin split into eight decimal places).
Bitcoins and satoshies can be moved from one internet user to another to pay nearly zero cost for products or services. This helps you to make payments globally without having to mess about with exchange rates and onerous bank charges. Bitcoins can be bought and sold at special exchanges for the standard currency.
Bitcoin wallets You need a wallet to use Bitcoin, a special piece of software that you store, send, and receive bitcoins in. There are three types of wallets, wallets with apps, mobile wallets, and online wallets.
Computer wallets are built on your machine giving you complete control over your account. Mobile wallets are installed in your smartphone or tablet and allow you to use Bitcoin by scanning a Quick Response (QR) code for daily transactions in shops and supermarkets. Web wallets are on the World Wide Web, that is, they’re a kind of cloud storage.
Payments are super simple using bitcoins. They can be made from wallets on your device or smartphone by simply entering the address of the recipient, the number and then pressing the send. Smartphones can also get the address of a receiver by scanning a QR code or by putting together two phones that contain NFC, a form of radio communication.
It’s just as quick to collect the payments … You just have to give your Bitcoin address to the payer.
Wallet security A bitcoin wallet is like a wallet full of cash. You should only keep small amounts of bitcoins in your machine or smartphone to minimize the risk of loss and store the bulk of your bitcoins in a safer environment, such as an offline wallet. If your wallet has been encrypted, if your computer or smartphone is stolen, an offline backup will allow you to recover your wallet.
Encrypting your wallet allows you to create a password that must be entered prior to withdrawing funds. Recovering a password from bitcoin, however, is difficult if it is lost. Then you have to be completely sure that you can recall your password. If your bitcoins ‘value is high, you can store your password in a bank vault, or anywhere you store important papers.
In order to be as safe as possible, you can use different media such as USB flash drives and CDs to store off-line backups at many locations.
Since bitcoin runs on software that you download to your device (PC or laptop) or smartphone, this software needs to be updated periodically to keep your wallets and transactions safe.
The benefits of bitcoins Bitcoins have many major advantages: 1-you can instantly send and receive unlimited quantities of money from and to anywhere in the world at any time.
2-Processing requires no fees, or rather low fees only.
3-Bitcoin purchases are permanent, shielding sellers from fraudulent loadbacks that are becoming more popular with credit cards.
4-Payments are made without the exchange of personal information which offers good protection against identity theft.
5-The method of receipt and payment is totally neutral, straightforward and predictable.