How to get started with Bitcoin

Financial investments with fiat money is one thing, but working with digital currencies is a different ballgame. Every investor should know how to get started with Bitcoin and the digital asset market in general. Plenty of opportunities await here, such as making profits over time and using crypto as a mode of payment among other things. 

Get to know more about this when you check out an easy explanation of Bitcoin and what you need to know. It might seem challenging at first, but learning the Bitcoin basics can greatly help you further your investments. Find out everything about Bitcoin made simple below: 

Bitcoin explained

One of the reputations that come with the digital asset market is that knowing how blockchain technology works or using crypto as a payment method is difficult to understand. For those who are new in the market, this could be the case but that doesn’t mean the feat is impossible. 

The use of digital cash or currency is to make transactions and investments easier for those who prefer an online portal. Instead of using your fiat bank account, you can convert your money into cryptocurrency and use it to invest and settle payments online.

If you’re just getting started with Bitcoin, one of the first things you should know about is its anonymity. The idea behind crypto investments is that the digital currency runs on a blockchain network, which allows users to make transactions anonymously anytime and anywhere. 

All you have to do is create a crypto wallet and administer transfers from your account to another and vice-versa. However, it is essential to first learn all about Bitcoin and how to use it for investments. 

What is Bitcoin? 

By now you might be wondering, what is Bitcoin and how does it work? Well, Bitcoin is a kind of digital currency or electronic cash used to invest and make online payments. It does not hold a tangible form and instead exists online. So, a simple explanation of Bitcoin is simply that it’s an online currency that people can use to buy, sell and purchase items on the web. 

Another important Bitcoin information you’ll find useful is that it’s a volatile digital currency, which means that its price can rise and fall rapidly with little to no indications. This is why some people find the cryptocurrency market to be a risky investment. But once you know how to get started with Bitcoin, you’ll know what to do correctly and gain perks and profits along the way. 

As previously mentioned, Bitcoin is decentralized, which means that it does not rely on a specific regulator or authoritative body to run it. The heart of Bitcoin and other digital currencies in the market is based on blockchain technology, a public ledger that records and executes transactions. 

Also known by its abbreviation ‘BTC’, Bitcoin is the first cryptocurrency to exist. Although thousands more have followed since its inception in 2009, Bitcoin remains to be the top digital asset based on trading volume and price. 

At Bitcasino, we can explain Bitcoin in simple terms to help you understand it easily. The learning process can begin with the Bitcoin definition and its history! 

What is the history of bitcoin?

Bitcoin was first released in the year 2009 by someone under the pseudonym Satoshi Nakamoto. No one knows if Satoshi is the programmer’s real name or if it’s a collective of people. Satoshi is the one who mined the first ever Bitcoin, thus calling it the Genesis Block.

A few months after Bitcoin was released, the first purchase of a tangible object was made by Laszlo Hanyecz, a programmer from Florida who purchased two pizzas with Bitcoin on May 2010. This was then known as Bitcoin Pizza Day, marking the first of many transactions that would be made with BTC. 

Knowing about Bitcoin, how it works and how to invest is all in understanding its history. The more you know about your crypto investments, the better your chances are of succeeding in the market! 

Bitcoin simplified: What does a Bitcoin look like?

Bitcoin is a virtual currency and has no physical form. It purely exists online and cannot be withdrawn into coins or bills of any kind. This is a part of why investing in BTC caters to those who are looking for efficient and anonymous transactions online. 

However, if you search the Bitcoin meaning online, you’ll find digital art or images that would portray BTC if it were an actual coin or money bill. These are simply present for artistic purposes and not portrayals of any real coins. 

Making a financial transaction with Bitcoin means that you are using the features of blockchain technology. Upon obtaining an online crypto wallet, you must input the necessary transaction details such as your public and private encryption keys to execute the transfer. Since Bitcoin has no central authority, peer-to-peer transactions with other investors in the market is how you trade Bitcoin. 

While Bitcoin has no tangible form, it has abbreviations and symbols you can use to identify it. Additionally, BTC has several varieties you’ll find while trading, all of which are detailed in the table below:  

How does Bitcoin work?

A BTC transaction is done with the use of a digital wallet where you and other users conduct trading, selling and buying. This is possible with private and public-key cryptography wherein it encrypts and decrypts data for the use of transactions in the market. 

With the use of blockchain technology, all transactions made are recorded and can no longer be changed. Additionally, your transaction details are kept safe, so you don’t have to worry about other people tracing the information back to you. 

What is Bitcoin used for?

Some investors in the crypto market might be constantly asking the question: ‘can you explain Bitcoin to me?’. Well, the key to understanding and being able to explain Bitcoin all lies in what the digital currency is used for. 

Means of upholding investments

The first thing to keep in mind is that trading Bitcoin is a means of upholding investments and online payments in the market. It provides anonymity in the sense that anyone can make transactions anywhere without having to disclose their personal information or contact details. Additionally, Bitcoin can be an alternative investment type that gives you freedom and transparency when looking for profits online. 

Trading 

You can trade Bitcoin via an exchange platform, cryptocurrency apps or peer-to-peer networks to name a few. Once you complete a BTC transaction through any of these methods, these details will be recorded in the public ledger and you can repeat the process as needed. 

Whether you are the kind of investor who enjoys buying and selling cryptocurrency or using it as a fast and efficient mode of payment, Bitcoin can do all of those things for you. 

What are the different types of Bitcoin? 

One of the best things about the cryptocurrency market and investing in BTC, in general, is that it offers versatile investment options. You might be surprised to know that the Bitcoin blockchain is an expansive network that hosts different types. Take a look at the type of tokens that run on the blockchain below: 

1. Utility 

A utility token is a kind of digital asset that serves a purpose when it comes to the market’s ecosystem. Instead of a crypto token that can be used in real-world exchanges, utility tokens only exist for the purpose by which they were designed. It is created with a smart contract and is pre-mined so developers can ensure it only functions within its designated ecosystem. 

2. Payment 

This kind of cryptocurrency is the most basic and well-known kind of crypto token since it is used by traders worldwide. Payment tokens are crypto assets that allow you to complete transactions within the market and facilitate exchanges however you like. It functions under blockchain technology and is unable to facilitate smart contracts or decentralised applications. 

3. Security 

You will also come across security tokens when trading with crypto. This type mostly resembles fiat currencies in the sense that they are similar to trading with bonds or stocks. They are owned by a certain company and traders will simply purchase them to have a share of ownership. As a result, security tokens must be regulated by government bodies. 

4. Stablecoins 

Lastly, stablecoins are kinds of crypto tokens that exist to keep the price of volatile tokens under control. They are backed by a physical commodity such as fiat money or gold, which keeps their price stationary too. You can protect your BTC from dropping in price by converting it into a stablecoin and then back to BTC when the value rises again. 

Users can convert their money into stablecoins via crypto wallets or exchange sites. Simply purchase stablecoins with your currency crypto token and that will be it!

How to use Bitcoin

By now, you might be wondering how exactly you can use BTC in this Bitcoin explained for dummies guide. Well, traders can do more than just invest in the market or the business ventures that go with it. 

Pay for products and services

The most versatile thing you can do with Bitcoin is to use it to purchase various products and services online. There are tons of merchants both online and offline that accept cryptocurrency as a mode of payment whether you’ll be paying for food or assistance.

Aside from those, you can even buy digital art and purchase a car. You just have to look for companies and stores that support crypto as payment.

Place bets at online casinos 

You can place your bets in an online casino and play various games such as slot, live dealers and table games. The possibilities are endless, and the financial sphere nowadays is catering to those who want to use BTC as payment for a variety of purposes. 

The Bitcoin simple explanation is that you can use it as an alternative payment method to purchase things like entertainment services, online goods and other personal needs. It goes beyond simply buying and selling funds online to potentially make a profit. 

How to buy and sell Bitcoin 

Understanding Bitcoin in layman terms also includes knowing how to buy and sell BTC with ease. Before you can buy and sell, you first must have a cryptocurrency wallet and take note of its address to help you manage your funds and administer transfers with ease. There are also different avenues by which you can trade Bitcoin.

Here’s are different ways you can buy and sell Bitcoin:

Through crypto exchanges

First up, you can trade BTC on cryptocurrency exchanges. These are online platforms in which you have to make an account to easily buy and sell cryptocurrency and access a variety of features. One of the best sites you should consider using is Coinbase. 

Using websites, P2P networks or apps

Another method you can use to buy and sell Bitcoin is via finance websites, P2P networks or applications. All you have to do is make an account, track the price of your chosen cryptocurrency and administer transfers! 

With the options on buying and selling Bitcoin, you can pick which one works best for you and go from there. 

How does Bitcoin make money?

The method by which Bitcoin is acquired is due to a proof-of-work system that involves mining. What is Bitcoin mining, you ask? Those who wish to participate in the mining process must solve complex mathematical equations to get BTC as a reward from the Bitcoin network. 

This process validate blocks in the network and facilitates the completion of transactions. When exchanges are made in any site or application, the validation process is completed in the blockchain network and the data remains there permanently. 

Another way Bitcoin can make money is through a speculation process. This is essentially a way for traders or speculators to bet whether crypto prices will move up or down. If they are correct, they get a profit but otherwise lose a portion of their funds. 

Learn more about Bitcoin when you invest 

In this guide about Bitcoin explained, simple and steady steps are needed to get your groove in the market. Keep in mind that trading Bitcoin means that you’ll be diving into a volatile ecosystem that could pose risks but also give you value for your money. 

All traders started as newbies in the market and if you’re a beginner, you can earn income and rewards over time. All it takes is a little bit of risk, skill in the crypto market and a flair for pursuing an investment. Start using Bitcoin when you bet on exciting games at Bitcasino and further your investments from there.

Bitcoin explained: Frequently asked questions

When was Bitcoin created? 

Bitcoin was first created in 2009 by a programmer under the pseudonym Satoshi Nakamoto. At the time, it was the first cryptocurrency and had little to no value at all. This changed over time as more people began to invest and see the potential in Bitcoin. Now, anyone who invested in Bitcoin back in 2009 is the owner of more than $17,000! 

How old do you have to be to use Bitcoin? 

There are no specific restrictions to who or how old people need to be when trading Bitcoin. But crypto exchanges, applications and other platforms often enforce an age limit of 18 years to make an account. Other restrictions will vary depending on your location and the regulations set forth by your local government. 

Why are there different types of Bitcoin? 

There are varying types of Bitcoin or cryptocurrency that cater to various industries and needs that can help traders customise their investments. For example, utility tokens can only be used under certain circumstances and their prescribed ecosystems. 

Meanwhile, stablecoins exist to prevent the loss of digital currencies due to volatility. Instead of going in blind when trading Bitcoin, you can utilise these varying types to make the most of every transaction you make and get as close as possible to your investment goals. 

How is the price of Bitcoin determined? 

The price of Bitcoin is determined by the demand and supply of the digital currency. For example, if more people purchase Bitcoin, then its price will increase too. If no one purchases BTC, then its price will drop in response. Think of it as the typical economic systems of countries around the world! 

What types of businesses would use Bitcoin? 

As previously mentioned, the possibility for cryptocurrencies like Bitcoin is endless. Various businesses can use Bitcoin as a mode of payment such as finance, automotive, hospitality, restaurants, art and more. You can even use Bitcoin as legal currency in El Salvador, so this digital currency holds potential for many industries. 

Once you know how to get started with Bitcoin, you can now begin trading and exploring the market for yourself! Test it out when you make an account at Bitcasino and play a variety of fun slots, live dealers and more online betting experiences. 

Words by: Adi Gregorio