Bitcoin 101
By Timothy Tibbettson 11/25/2024 |
Bitcoin is something everyone has heard about but often doesn't understand. Here's is a 101 on Bitcoin that we hope makes it understandable.
Because one could write an entire full-length book on Bitcoin, we're going to keep it simple and explain the basics, and even that isn't easy.
Bitcoin is a digital currency created in 2008 and used in 2009 by an unknown person, or group of people, who went by the name Satoshi Nakamoto. Bitcoins are created by a process called mining. Mining is accomplished with powerful computers. Often this requires a "server farm" of many computers that also cost a fortune in electricity. Bitcoin records are kept in a blockchain, similar to a bank ledger, keeping track of every transaction. As of this writing, there are only 21 million possible Bitcoins available for mining. At that point, the supply is exhausted. Currently, there are 2.3 million Bitcoins left with an estimated timeframe of over 100 years.
You can't hold or touch a Bitcoin, and there are no banks or government involvement. Everything is digital, so you normally store your Bitcoin in a secure digital wallet that you can download as an app.
You usually see a golden Bitcoin in most stories, just like the one below, but you'll never actually hold a Bitcoin. Someone gave me a chocolate Bitcoin once. It was delicious.
Your password is important because if anyone gets it or loses the password, you have no recourse. It's gone. If a server holding your information is hacked, it's gone. One exception is the ability to print your Bitcoin using a key or even a barcode, allowing you to delete the information on your computer and physically store your Bitcoin somewhere.
Bitcoin became popular on the Dark Web. People could use Bitcoin, along with the Tor Browser, to anonymously buy and sell guns, drugs, and other illegal items and services anonymously. Few people knew anything about Bitcoin years ago because a tiny minority of the population has ever used the Dark Web. If you'd like more information, I recently read American Kingpin by Nick Bilton, which covers the entire story of the Silk Road's rise and fall, a 1.2 billion dollar website created by Ross Ulbricht. I won't give anything else away about the book.
Heading into 2021, Bitcoin is beginning to receive mainstream attention. NewEgg was one of the first to accept Bitcoin. Elon Musk announced you could buy a Tesla with Bitcoin while purchasing 1.5 billion. The other large companies who accept Bitcoin might be why you're reading this article. Some large companies include PayPal, Burger King, Overstock, Microsoft, AT&T, Subway, KFC, Dallas Mavericks, Virgin Galactic, and more.
One easy way to get involved is to buy BTC as a stock. Had you bought Bitcoin (BTC) in 2015 at $327, you could have sold it in March of 2021 for over $61,000, netting over 6 million dollars. While many can't afford a single share of Bitcoin, many online traders, including RobinHood and WeBull, allow you to purchase fractional shares. That's right; you can buy $1,000 of Bitcoin.
If you'd like to get started owning Bitcoin, Coinbase is one of the most popular places to start. They have numerous tutorials to help you through the process.
Let us know if we missed any of the basics. We'd be glad to update the article if we missed anything you think is relevant.
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Because one could write an entire full-length book on Bitcoin, we're going to keep it simple and explain the basics, and even that isn't easy.
Bitcoin is a digital currency created in 2008 and used in 2009 by an unknown person, or group of people, who went by the name Satoshi Nakamoto. Bitcoins are created by a process called mining. Mining is accomplished with powerful computers. Often this requires a "server farm" of many computers that also cost a fortune in electricity. Bitcoin records are kept in a blockchain, similar to a bank ledger, keeping track of every transaction. As of this writing, there are only 21 million possible Bitcoins available for mining. At that point, the supply is exhausted. Currently, there are 2.3 million Bitcoins left with an estimated timeframe of over 100 years.
You can't hold or touch a Bitcoin, and there are no banks or government involvement. Everything is digital, so you normally store your Bitcoin in a secure digital wallet that you can download as an app.
You usually see a golden Bitcoin in most stories, just like the one below, but you'll never actually hold a Bitcoin. Someone gave me a chocolate Bitcoin once. It was delicious.
Your password is important because if anyone gets it or loses the password, you have no recourse. It's gone. If a server holding your information is hacked, it's gone. One exception is the ability to print your Bitcoin using a key or even a barcode, allowing you to delete the information on your computer and physically store your Bitcoin somewhere.
Bitcoin became popular on the Dark Web. People could use Bitcoin, along with the Tor Browser, to anonymously buy and sell guns, drugs, and other illegal items and services anonymously. Few people knew anything about Bitcoin years ago because a tiny minority of the population has ever used the Dark Web. If you'd like more information, I recently read American Kingpin by Nick Bilton, which covers the entire story of the Silk Road's rise and fall, a 1.2 billion dollar website created by Ross Ulbricht. I won't give anything else away about the book.
Heading into 2021, Bitcoin is beginning to receive mainstream attention. NewEgg was one of the first to accept Bitcoin. Elon Musk announced you could buy a Tesla with Bitcoin while purchasing 1.5 billion. The other large companies who accept Bitcoin might be why you're reading this article. Some large companies include PayPal, Burger King, Overstock, Microsoft, AT&T, Subway, KFC, Dallas Mavericks, Virgin Galactic, and more.
One easy way to get involved is to buy BTC as a stock. Had you bought Bitcoin (BTC) in 2015 at $327, you could have sold it in March of 2021 for over $61,000, netting over 6 million dollars. While many can't afford a single share of Bitcoin, many online traders, including RobinHood and WeBull, allow you to purchase fractional shares. That's right; you can buy $1,000 of Bitcoin.
If you'd like to get started owning Bitcoin, Coinbase is one of the most popular places to start. They have numerous tutorials to help you through the process.
Let us know if we missed any of the basics. We'd be glad to update the article if we missed anything you think is relevant.
comments powered by Disqus
