Have you heard of cryptocurrency? What about the blockchain network? Do you know that new technologies like blockchain can provide unique services to the world?
If you browse the news related to new technologies, you will definitely come across hot news about this. “Bitcoin” is one of the most famous virtual currencies that has created an uproar in the world these days.
Maybe you have heard its name, but its meaning is not yet clear to you. let explore together:
- What is Bitcoin digital currency?
- Definition of Bitcoin
- A brief journey through the history of Bitcoin
- Where does bitcoin come from?
- Who controls Bitcoin?
- Why are digital currencies controversial?
- How does Bitcoin work?
- What are the advantages of Bitcoin?
- Where is Bitcoin stored?
- What are Bitcoin wallets?
- How is Bitcoin mining done?
- How to receive and send bitcoins?
- What is bitcoin node?
- Who is the founder of Bitcoin?
- What is the security of digital currencies?
- What factors affect the price of Bitcoin?
- Reviewing the process of buying digital currencies
- Will digital currencies be destroyed?
- Are Bitcoin and its counterparts a threat or an opportunity?
What is Bitcoin digital currency?
With the Bitcoin price reaching $13,000 in early 2018, this digital currency gained a lot of fame and prosperity. This digital currency was a combination of creativity, overcoming legal obstacles and bypassing middlemen in various financial and banking affairs that made financial transactions possible on an international level.
Because of this, it was able to attract a lot of attention to itself in a short period of time.
After “Bitcoin”, many cryptocurrencies came into the world that had and have similar features. Cryptocurrencies have great features and capabilities, and that is why they have become so popular after about 10 years of their existence.
Cryptocurrencies operate on a large network platform called “Blockchain”. This network has many users and its data cannot be tampered with.
“Extensiveness”, “large number of users”, “absence of violation and fraud in the network” and “absence of monitoring the network” make it a free and effective environment for communication activities in various fields.
More precisely, “Bitcoin” operates on the platform of the decentralized blockchain network.
Definition of Bitcoin
Bitcoin and other cryptocurrencies are lines of computer code that have monetary value. These lines of code are produced by powerful computers with high consumption of electrical energy. Cryptocurrencies are also called “digital currency”.
These currencies are a form of digital money created by complex mathematical calculations. You might ask what does “crypto” mean in the word cryptocurrency and where does it come from? This word is derived from “cryptography”.
Cryptography is the process that protects the creation of new coins.
The important thing about digital currencies is the lack of central supervision over them. In simple words, no government, institution or body supervises these currencies and they operate in a completely free, uncensored and unhindered network.
Different governments in different countries still don’t know how to react to digital currencies.
Some of them seek to limit its effects by banning activities in this field, and others try to understand it better and take full advantage of its features and capacities.
A brief journey through the history of Bitcoin
“Bitcoin” is the first digital currency. No one knows who made it. Of course, this is not a new issue. Because most digital currencies are produced in silence.
It is said that the creator of Bitcoin is a person named “Satoshi Nakomoto”. It is not clear whether Satoshi Nakumoto is really a person or a group of people under this name have started producing “Bitcoin”.
After the birth of this cryptocurrency, there was no more news from Satoshi Nakumoto. Some time later, other different cryptocurrencies such as “Litecoin”, “Ethereum” and… have been introduced to the world.
One of the main advantages of Bitcoin is that it can be stored offline in a secure hardware. This mode is called “cold storage”. With cold storage, the possibility of crypto theft is zero.
Cold storage is opposite to “warm storage”. Warm storage is a type of storage in which data is stored on the Internet, and as a result, it is possible to steal it.
Where does bitcoin come from?
Bitcoin tokens are created following the mining process. Mining is a process during which transactions are added to a public ledger. During this process, a special algorithm will monitor the mining difficulty and the total number of tokens created.
Since Bitcoin tokens are created and distributed by an algorithm (and not by a central bank), the Bitcoin system bypasses currency market inflation, ensuring that there is always a steady financial flow of new coins.
Note that over time, the number of Bitcoin tokens awarded to miners as a mining reward will be less. The reason for this is Bitcoin’s exponential halving process.
Another point is that the mining reward system is almost similar to winning the lottery. While many people try to add new transaction blocks to a blockchain by solving complex puzzles with the help of advanced computers, not everyone succeeds and only one user can receive the bitcoin reward at a time.
You know that bitcoin is not physical and you cannot hold your bitcoins in your hands or use them in your usual purchases. The account of this digital currency is recorded in a balance sheet (general ledger or blockchain).
Therefore, the number of Bitcoin coins that are created anew is equal to the number that is added to the balance sheet.
When new tokens are created, their bill is added to the public ledger, and the miner who added the block receives reward bitcoin tokens in their public account.
Now, if this person sells or uses these bitcoins, new tokens will enter the financial flow.
This system causes a steady and predictable increase in money supply and ensures the security of the Bitcoin system. In fact, the more people verify a ledger and try to add new blocks to it, the more likely that blockchain is correct.
In such a situation, malicious kernels will rarely be able to manipulate this ledger.
Who controls Bitcoin?
Unlike fiat currencies that are controlled by governments and banks, Bitcoin is decentralized. So who controls Bitcoin? The answer to this question is not a single person or organization.
In fact, Bitcoin is simultaneously run by its users, miners, nodes, exchanges, and developers around the world. Bitcoin is a rule-based system that is not made by a specific person.
Satoshi Nakamoto, the creator of Bitcoin, mentioned in the white paper of this digital currency that Bitcoin is a system for electronic transactions that does not need to rely on mutual trust (as is common in physical currencies).
This powerful network requires that all its members follow a set of common rules, and this is the basis of consensus algorithms. That is, laws are established based on the opinion of the majority. The role of each member managing this system is as follows:
- Developers: Each user in this peer-to-peer network can choose the version of the software they want to use. Bitcoin creators cannot prevent these changes made by users.
- Miners: Bitcoin network security is provided by miners. Despite the important position of these members, miners have access to the network as much as anyone else who uses Bitcoin.
- Nodes: Bitcoin arbitrators are known as Nodes. These people monitor transactions and validate each block before it is added to the network. Developers can suggest new features. But if the nodes do not accept these proposals, there will be no change in the system. For example, if a node does not agree with the system update, it can prevent it from being done.
Why are digital currencies controversial?
This story has many reasons. For example, from 2011 to 2013, criminals used Bitcoin to make their transactions and made it famous. The lack of government monitors, untraceable activity, tax evasion, etc. were some of the reasons why criminals turned to this digital currency.
As we said before, governments have not yet been able to formulate coherent laws regarding digital currencies. Therefore, there is no talk of issues such as receiving taxes from these cryptocurrencies.
“Scams” are also one of the reasons that brought up the name of cryptocurrencies in the world.
Scams are the same traps that are placed in the way of users, especially newcomers or non-entrants, in order to lure them under the pretext of making a profit in the world of digital currencies.
Since blockchain – the same platform where cryptocurrencies are transacted – enables direct communication between people, there is no need for intermediaries such as banks and financial institutions.
As a result, this factor is another reason that caused the popularity of digital currencies.
How does Bitcoin work?
Bitcoin is a digital asset implemented on the blockchain network. Blockchain is an information sharing system where everyone in the network has access to the information that is kept in the ledger.
In the banking system, only the bank knows about the asset transfer and all its details, but in the blockchain, this information is recorded in the central ledger that everyone has access to.
In each sharing, the code of the sender, the code of the receiver and the amount sent are determined, it is recorded in the book and it is possible to refer to it forever. The current size of the “Bitcoin” ledger has reached more than 320 gigabytes.
Each wallet has a strong security system consisting of two codes, a private key and a public key. Every transaction made in the cryptocurrency network is signed with your private key, which is generated based on a very strong cryptographic system.
Note that only you have access to the private key, but once the transaction is registered in the central office, people can view that transaction based on the public key.
Let’s see this in an example:
If person “A” wants to make a transaction in the network – for example, send one unit of this cryptocurrency to person “B” – she must announce her request to the network. Nodes receive the transaction, record it and then send it to the surrounding nodes.
But the nodes, except for sending the transaction to the surrounding nodes, must measure the validity of the received transaction.
For example, if person “A” wants to send 2 units of Ethereum to person “B”, but his property is only one unit of Ethereum, the nodes will identify this transaction as a faulty transaction and this transaction will not be carried out.
For this, the nodes must refer to the history of transactions. A person requesting a transaction to send an Ethereum unit proves that his balance is at least one Ethereum unit by linking his previous transactions to the network.
Checking the required amount of assets is done once by the wallet of the person sending the transaction and once by the nodes. With this, the network will be safe from the risk of spending again.
Having digital currency in your wallet means that you have unspent transactions on the network.
What are the advantages of Bitcoin?
Being digital
“Bitcoin” is a completely virtual currency that has no physical equivalent. That’s why you don’t need a special space to store it.
It is transparent
All transactions of this cryptocurrency are recorded in the general ledger where everyone has access to its information. Each wallet has a private key and a public key. The public key is visible in recorded transactions. You can see the amount of assets by referring to the central ledger.
It has high security
This cryptocurrency works on the blockchain network, which is secured using special protocols. Nodes (both regular nodes and miners) approve or reject transactions by following a series of specific commands. Also, mining nodes or miners play an essential role in network security.
It is decentralized
Unlike common fiat currencies in countries, digital currency is not under the supervision of any organization or government. This feature can be considered as its strength and weakness at the same time. Because due to the lack of monitoring of this system, it is considered a suitable option for fraud. Because this has happened many times until today.
High speed and low fees
Asset transfer is done by this cryptocurrency in a short period of time. Meanwhile, if businessmen want to make international financial transfers, they have to wait for a few days.
Apart from this, the fee for transferring digital currencies is much lower than transferring fiat currencies. Of course, with the increasing difficulty of the network, the fee of cryptocurrencies has also taken an upward trend.
Transaction guarantee
Transactions made in the Bitcoin network are not canceled in any way. For this reason, if you mistakenly send your cryptocurrency to someone you don’t know, it is no longer possible to return your digital currency. But if you know the person, your currencies will be returned only by sending the person again.
This feature is added to the network to ensure the transaction. In this way, the receiver cannot claim that he did not receive the tokens.
Where is Bitcoin stored?
When you purchase Bitcoin, you receive virtual ownership of the purchased tokens. In fact, with the purchase of bitcoins, two private and public keys will be provided to you, and you can use the public key to create your wallet address and use the private key to access your bitcoins.
Be careful that you should keep your private key with you and in your cryptocurrency wallet and never share it with anyone else.
The ownership of your bitcoins is securely recorded and stored on the blockchain. So far, hackers have not succeeded in stealing bitcoins by changing the blockchain information, which is due to the encryption method used in the blockchain.
In fact, with today’s blockchain technology, it will take hundreds (if not millions) of years for someone to hack a blockchain.
However, your private key is stored in your wallet. Cryptocurrency wallets are basically software that you install on your electronic devices.
This issue puts these wallets at risk of being hacked. So where the weakness lies is between the blockchain and the user and not in the blockchain itself.
There are different types of cryptocurrency wallets. Custodial wallets are managed by a third-party intermediary, for example a cryptocurrency exchange.
In non-custodial wallets, there is no intermediary and you store your keys independently in these wallets. Non-custodial wallets are classified into cold and warm wallets.
In a cold or offline wallet or hardware wallet, your private key is stored offline. As a result, by using this type of wallet, you will be safe from the risk of being hacked by profit-seeking people. For example, Trezor and Ledger are two hardware wallets that support Bitcoin.
Hot wallets are software installed on your mobile phone and store your private keys online. The presence of these wallets online is associated with the risk of theft and disclosure of your information.
Therefore, when using these wallets, you should keep in mind that your wallet may be an easy target for hackers.
What are Bitcoin wallets?
If you intend to buy Bitcoin or any other digital currency, you must first choose a suitable wallet. Bitcoin is the first digital currency that was introduced to the market in 2009 and therefore almost all cryptocurrency wallets support this token.
You can also store your digital currency tokens in cryptocurrency exchanges. But keep in mind that this will compromise the security of your account.
It is enough for hackers to attack the exchange where you have stored your bitcoins. In this case, all your account balance will be lost.
Therefore, it is better to have a wallet to store your tokens.
The best Bitcoin wallets in 2023 are:
- Best Bitcoin Wallet for Security: Trezor Model T Wallet
- The best wallet in terms of integrity: Ledger Nano X wallet
- The best wallet for professional Bitcoin users: Electrum
- Best wallet for beginners: Exodus
- Best Bitcoin Wallet for Mobile Users: Mycelium
How is Bitcoin mining done?
The aim of miners is to access unmined bitcoins and of course create security in the network. Miners are rewarded by generating blocks of valid transactions and connecting them to the blockchain. In order to avoid creating multiple blocks and manipulating the network, only nodes that are miners have the right to create blocks.
All transactions of this digital currency are registered in a central office that all network members have access to. Every 2500 transactions are placed in a block and that block is added to this ledger.
Some people in the network volunteer to add this block to the end of the network and update the central office information in exchange for a reward.
The “Bitcoin” system is designed in such a way that it creates a mathematical problem for each block with the help of hashing hash function.
Any miner who can solve this problem first gets the honor of adding a block to the end of the chain.
A node in the network is a powerful computer that runs the Bitcoin software, participates in the process of transferring information, and thus helps maintain the Bitcoin network.
Nodes can be miners, or they can play a role in maintaining network security and verifying transactions by sharing their system.
At the beginning of this cryptocurrency, all nodes acted as miners. As time passed and the work became more difficult, the miner nodes tried to win the competition using graphics cards, but gradually the graphics cards also failed to cope with the mining operation.
Miner nodes were forced to use special hardware devices that were produced only for mining.
Competition in mining
Today, the competition for mining has become very tough. Even people who had powerful hardware devices now have little chance to compete.
Therefore, we see the emergence of mining pools. In fact, by sharing their hash power, miners agree to increase their chances of receiving a profit by receiving less.
To work as a miner, you should pay attention to the power of the miner’s hash rate. This means that your mining machine has the power to guess how many answers in one second?
The next thing to pay attention to is how many watts is the power consumption of your miner?
The price of electricity in the country where you live is one of the things that you should pay attention to when deciding to operate in this field.
Of course, if you want to operate in the mining pool, you should also pay attention to the fee that the pool demands from you.
A new block is created every 10 minutes. If the hash power of a miner is so high that it can find the answer to the problem in, say, 6 minutes, disorder will be created in the network.
For this reason, the difficulty of the network was built into the Bitcoin network.
The network updates the difficulty by measuring the processing power of the miners in it almost every 2 weeks.
How to receive and send bitcoins?
To receive bitcoins, just install your secure bitcoin wallet on your mobile phone or computer. Then provide your bitcoin address to the sender.
You can use the addresses generated by the wallet and give this address to the sender through Messenger or any other means of communication.
Once the sender receives your address, they must go through the process of sending bitcoins in their wallet software.
To receive bitcoins using your public key, you must do the following in your cryptocurrency wallet software:
- First, open your bitcoin wallet software and select the Receive option at the top of the screen.
- Choose the wallet you want. By choosing a Bitcoin wallet, you will receive tokens in this wallet.
- Your chosen wallet will then generate an address where you can receive your tokens. Copy this address by clicking on the QR code.
- Give this address to the sender. If the sender is near you, he can scan the QR code of your wallet with his smartphone.
If you want to send bitcoins to another person, you must go through the following steps:
- First, open your Bitcoin wallet software and click on the Send option at the top of the main page.
- Enter the wallet address of the person you want to send Bitcoin to. You can also scan the receiver’s wallet QR code with your mobile phone.
- Select the wallet from which you want to send bitcoins.
- Enter the amount of the token to be exchanged and select the Continue option.
- After confirming the details of the transaction, click Send.
If you want to transfer bitcoin tokens between your wallets, click on the My Wallets option in the Send section of the software.
What is bitcoin node?
Blockchain network is a decentralized technology that is not controlled by any government, organization or person. Despite all the advantages of this system, without a regulatory body measuring the validity of the operation carried out in the network may be disrupted.
Nodes in the Bitcoin blockchain network play the role of the same regulatory body. But since the blockchain technology is decentralized, all the systems connected in the network do this, and monitoring is not only under the authority of one person or organization.
Nodes – any computer directly connected to the network and receiving the ledger – in the blockchain network are responsible for ensuring decentralization and also making the blockchain a secure platform for transactions in the network.
In order for nodes to play a role in monitoring and confirming transactions, they must install the relevant program on their system and connect to other nodes or connected systems in the network so that the network can take help from the power of their system to validate and confirm transactions.
Ordinary users can trade digital currencies by having a wallet and creating an account in a reputable exchange.
Who is the founder of Bitcoin?
It was in the midst of the 2008 American economic recession that an unknown person or group with the pseudonym “Satoshi Nakamoto” sent an article to a group of experts in the field of cryptography.
Satoshi Nakamoto is both real and unreal. In other words, he can be compared to a ghost in the digital world.
but why? Satoshi Nakamoto wrote the Bitcoin code in 2007 and published its whitepaper in November 2008. In 2008, the website “Bitcoin.org” was launched under his name. Also, Satoshi Nakamoto published an article entitled “Bitcoin is a peer-to-peer electronic cash system”.
Satoshi Nakamoto was active in the development of this cryptocurrency project until 2010. In 2010, Mr. Gwyn Anderson became the project manager and Satoshi Nakamoto disappeared.
Regarding his identity, it is said that he is a Japanese person and was born in April 1975.
Of course, Satoshi has used British English in his published works without any problem. This issue has caused a little doubt about his Japanese identity.
On the other hand, according to the timing of Satoshi’s posts, it is assumed that he did not post at midnight GMT, which made it more likely that Nakamoto was English.
Willy Ledonvirta
Finnish researcher and former video game designer. Of course, since he doesn’t have Satoshi Nakamoto’s skills in programming and he doesn’t have much knowledge about cryptography, the possibility that he is Satoshi Nakamoto is weakened. On the other hand, if Virta was the creator of Bitcoin, he would probably quit his job at the university.
Gwen Anderson
After Nakamoto’s disappearance, Gwen Anderson took over, but it’s not very plausible that he’s Satoshi Nakamoto. However, Anderson had announced that the Australian “Greek Wright” was Satoshi Nakamoto.
Wright was a computer scientist. After Gwen Anderson’s claim, many investigations were conducted into her life. The conclusion is that he is either the creator of “Bitcoin” or a vicious liar.
In 2019, Greek Wright filed a copyright for Bitcoin Zero and One in the United States.
Some accepted him as the creator of Bitcoin, but some did not accept this claim. In 2019, he announced that he was in the project with a group consisting of Dave Kilman and Hal Finney.
Kilman was a cryptographer who died in poverty in 2013. When he was found, he was surrounded by bottles of alcohol and a gun, and his body was decomposing. There was also a hole in his mattress from an arrow.
It is interesting to know that he had a significant amount of Bitcoin at the time of his death. Kilman’s brother refused to release Kilman’s hard drive. That is why the truth was not revealed in this case.
Hal Finney
Among the people who could be Satoshi Nakamoto, Hal Finney is one of the most likely options.
Before creating this crypto, he was an experienced cryptographer. Even if Finney is not the same as Satoshi Nakamoto, the two can be put on the same level in terms of intelligence. Because they are both geniuses.
It doesn’t hurt to know that Finney’s handwriting is very similar to Satoshi Nakamoto’s, although this is not a strong reason for this claim.
Because this was also said about Anderson.
Finney declared that he was not Satoshi Nakamoto and even allowed investigators to search his home.
He was the first person to receive “Bitcoin” from Satoshi Nakamoto. Unfortunately, Finney died in 2014 due to illness.
Dorian Nakamoto
Dorian Parnefis Nakamoto is a Japanese-American citizen. He lived at the end of the street where Finney lived, was that a coincidence?
The speculation that Dorian Parnefis is Satoshi Nakamoto originates from the fact that the reporter of the two weekly newspaper asked him questions about Bitcoin in 2014, but Dorian replied that he no longer has anything to do with this cryptocurrency and that other people have taken responsibility.
This answer increased the concentration of doubt about him.
However, Dorian said after that incident that he did not understand the reporter’s question and thought that the reporter was asking about his military record, which is a confidential matter.
After this incident, Satoshi Nakamoto’s account was activated after 5 years and announced that he is not Dorian Nakamoto.
Nick Sabo
In terms of intelligence, he can be Satoshi Nakamoto. On the other hand, he wrote an article about “Bit Gold”, which is a decentralized digital currency. This currency did not reach the top, but according to some, it could have been a failed version of “Bitcoin”.
Before the emergence of this cryptocurrency, he had presented a plan similar to Bitcoin. Of course, Nick announced that he was not Satoshi Nakamoto and added that Satoshi had guided him in the field of goldcoin.
Scott Stornetta
He is one of the first founders of blockchain technology, who mentioned 8 important works in the Bitcoin white paper. One is a general book on probability, and the others deal with fundamental issues in cryptography, three of which Scott co-authored.
In 1991, Scott Stornetta and Stuart Haber proposed a decentralized scheme in an article titled “How to Timestamp an Electronic Document”.
Many of the principles presented in this and subsequent articles were later used by Satoshi Nakamoto. However, in 1995, before the birth of Bitcoin, they launched their blockchain network, the world’s first, which is still active.
Even though “Stornetta” says that he is not Satoshi Nakamoto, but his works were fundamental for the entire field of cryptography.
Even with Satoshi Nakamoto’s withdrawal from the project, this person (or group) is still important to the crypto world because of his Bitcoin holdings. If Nakamoto intends to sell his cryptocurrencies, the digital currency market will undergo a severe fluctuation.
The higher the price, the more the cryptocurrency market is influenced by the behavior of someone who owns a large amount of them. It is estimated that Nakamoto has about one million Bitcoin units.
What is the security of digital currencies?
We explained earlier that the transactions sent to the network are sent from one node to the surrounding nodes. You also realize that having bitcoins in your wallet means having transactions that have not yet been spent.
But what if person “A” sends a transaction to transfer a cryptocurrency to the network, and before the recipient receives the cryptocurrency, person “A” takes the money and sends an opposite transaction?
Therefore, the network should pay attention to the time order of the transactions sent. When person “A” sends a transaction to the network, the nodes check and confirm it.
In this way, at the head office, the information is updated, and at this point the asset of person “A” is changed to zero and the asset of person “B” is changed to one.
The adversary’s second transaction sent by person “A” to the network is queued and checked after the previous transactions, the nodes find out that person “A” has no more cryptocurrency by checking the transaction history. As a result, the transaction will not be done.
In the blockchain system, each block has the capacity of approximately two thousand five hundred transactions – these transactions are sent at one time – and these blocks are created by miners every 10 minutes.
Each block has its own code. This code is the hash block. Each block contains the hash of the previous block in addition to its own hash. If a block changes, then the hash of that block will also change, and as a result, all blocks will become invalid.
What factors affect the price of Bitcoin?
Supply and Demand
In any currency, goods and services, if the demand is high, its price will also increase. Since 2017, when more people became familiar with blockchain and its application, more people wanted this digital currency. This caused its price to rise due to higher demand.
Fork
“Fork” is also one of the factors that affects all cryptocurrencies implemented on the blockchain platform.
Many times, holders of certain wallets are told after a fork that if you have a certain amount of “Bitcoin”, you will also be awarded some amount of Bitcoin Cash.
The same thing makes people increase their digital currency assets or buy even if they don’t have any balance. Of course, there are exceptions.
Halving
Halving of the mining reward every four years, which causes negative inflation, affects the price of this cryptocurrency. At first, the mining bonus was 50 units, then 25, and then it reached 12.5 and in it reached 6.25 units.
This again refers to the story of supply and demand. Bitcoin is becoming more popular day by day, more people are accepting it and wanting it. On the other hand, with the passage of time, its supply becomes less and less and this causes its price to rise.
Regulatory laws
What policies governments adopt towards Bitcoin can have a significant impact on its price. Things like “getting a license for miners to enter” and generally the acceptance of cryptocurrencies by the government affect their price.
Many people have stopped working in this field due to possible problems in countries that have banned cryptocurrencies.
Political events
Never forget that money is timid and looking for a safe place. For example, today it is in the stock market, tomorrow in gold and then in the cryptocurrency market.
There is an expression called “smart money” in economics, which says that “smart money is taken out of the peak of a bull market and goes into a market that has not yet begun to grow.”
With their correct analysis of political events, smart money holders can analyze the impact of political events such as relations between countries much earlier than ordinary people, and thus influence the value of cryptocurrencies.
Social media
Social media such as “Reddit”, “Twitter” etc. also influence the price of cryptocurrencies. When the number of tweets related to Bitcoin increases, we should probably wait for the effect of those tweets on the price.
Depending on whether the tweets are negative or positive, they can increase or decrease the price.
Also, by checking “Google Trends”, you can see how much Google users have searched for cryptocurrencies. When the amount of search increases, it can be assumed that many financial resources will enter this market.
Reviewing the process of buying digital currencies
Installing a wallet
The wallet provides you with an address and password, the wallet address is exactly like your bank account number, the password prevents others from accessing the assets in your wallet.
You should choose the best wallet for yourself according to the amount of your assets and your knowledge of different wallets.
For example, storing digital assets in a web wallet is not very safe. The best option for someone who has a lot of digital assets is to use a hardware wallet.
By preparing each type of wallet, you will own the public and private keys that are necessary to carry out transactions.
Pay attention to the fact that you must get your software and applications from reliable sources. Also, do not share your wallet private key with anyone.
Buy bitcoin and transfer to wallet
After registering and authenticating in the exchange, we reach the 2nd and last stage, which is the easy transfer of money in the bank.
The process of buying digital currencies is very simple and you don’t need to know the technicalities of cryptocurrencies or how they work.
However, taking a cryptocurrency training course is essential whether you want to learn the technical side of it or just want to buy cryptocurrency.
Will digital currencies be destroyed?
Digital currencies were created with the aim of changing the financial system of the world, as you know, 21 million bitcoins can be mined, of which more than eighteen million units have been mined so far (2021).
This one feature is enough to consider Bitcoin economically incomplete. An economy must exist as much as the financial activities require it.
If Bitcoin is going to have a future, more people need to recognize it and use it for their transactions. But with the limitation of the number of Bitcoin units, this is not possible.
Needless to say, this issue is expressed by Bitcoin fans as one of its positive features. Because it eliminates inflation and even makes this currency face negative inflation.
As the price of this digital currency rises, few people are willing to sell their assets. This causes its price to increase too much and slows down the economy.
But on the other hand, “Edward Snowden” says regarding the possibility of Bitcoin’s demise, as long as there are people around the world who prefer to have transactions without bank supervision, digital currencies will continue to exist, even if for some reason, bitcoin will be destroyed.
He also mentioned the restrictions imposed on some nations due to the embargo and said that digital currencies are a suitable solution for international financial transfers in the embargoed nations.
Digital currencies need general acceptance to survive. As long as Bitcoin meets the needs of a part of society, it is possible for this currency to survive and even grow.
A look at the factors affecting the destruction of Bitcoin
The emergence of a better digital currency than Bitcoin
If a digital currency is created that does not have its weaknesses despite the strengths of Bitcoin and is accepted in the society, it may cause the destruction of Bitcoin.
Increase in electricity prices
If the price of electricity is to increase, along with increasing the difficulty of the network, the profits of miners will decrease. This issue can discourage many from continuing to work in this field. Of course, even in this case, pools that consume less electricity will continue to operate.
Restrictions by governments
If the governments around the world coordinate with each other to ban activities in the field of digital currencies, they can destroy this currency.
Of course, the percentage of this probability is very low. Because even with the existence of two countries that provide the possibility of free activity for users, this currency will continue to exist.
Power and internet outages around the world
Bitcoin is a digital currency that needs electricity and internet to survive. If there is an incident that damages the electricity and internet around the world, Bitcoin will also suffer from the damage and will be destroyed.
Network fork
If for unknown reasons, many forks occur in the Bitcoin network, it will cause this network to lose its value. Of course, the developers must be careful about this issue, so the probability of Bitcoin’s destruction due to this reason is almost zero.
Are Bitcoin and its counterparts a threat or an opportunity?
Cryptocurrencies are tools of great potential. If you pay attention to the word “tool”, you will understand well that cryptocurrencies can create very positive or unfavorable capacities in the world.
Since they are a tool for transactions in the world of business, taxation and economy, it is according to the application and the way of use that they can be judged to be positive or negative.
It is the users and the countries that determine whether it is positive or negative.