What is Bitcoin, and how does it work? Where does Bitcoin come from? Is it worth investing in it or not? Is buying Bitcoin the right thing to do or not? All these questions will arise for many newcomers to the field of digital currencies regarding Bitcoin.
Bitcoin is a cryptocurrency or digital currency obtained through mining. In this article, we will explain the concept of Bitcoin using video and infographics. You can find any topics and information about Bitcoin from A to Z.
This article will give you complete and comprehensive Bitcoin information without needing other sources. This article is beneficial so that all people, from beginners to advanced, can use it to understand Bitcoin and everything about it entirely. Simply put, Bitcoin is a new type of digital currency. You can transmit it to another person just like your bank transactions, with the difference that centralized banks, financial institutions, or even governments won’t know about your deals.
There are numerous descriptions of this coin, not all of which are by definition correct or complete. Bitcoin is an alternative to fiat currency, an equal fiscal system, and a new way of life and business. All these delineations are correct but could be complete. In this article, you can find everything about Bitcoin or how to buy and sell it at legit exchanges.
Bitcoin was created in January 2009 after the real estate market’s collapse, which was the cause of the economic recession. The idea of this currency belongs to an anonymous person with the alias” Satoshi Nakamoto.” The identity of Nakamoto has remained a secret until this moment.
What was Satoshi’s goal in creating Bitcoin?; Reviewing the world’s first digital currency from a different perspective
You may be a professional cryptocurrency investor or a newcomer looking to learn the skills needed to enter the market. No matter what level of knowledge you are, studying Bitcoin and the world’s first blockchain technology always helps to understand this area more deeply; that’s why we try to approach this topic with a completely different perspective.
We all know that the founder of Bitcoin is an unknown person with the alias “SATOSHI NAKAMATO,” who introduced his Bitcoin invention to the world in 2009. but what was Satoshi’s goal in creating Bitcoin? Did he want to create one of the largest investment markets in the world? Or was his goal to make everyone rich by buying a computer file called Bitcoin and holding it? The answer to all these questions is NO!
If we look at the white paper (we shall talk about it later) of Bitcoin, we realize that Satoshi’s intention of creating Bitcoin was a straightforward thing:
- A way to transfer money electronically between two real people without an intermediary system.
According to Satoshi himself, he intended to simulate the physical exchange of money between two people in the real world, inside the virtual world.
For example, you get into a taxi, and when you arrive, you take out your wallet and pay the fare to the driver. This process is one of the oldest and easiest ways to exchange currency between two people. Is there anyone other than you and the taxi driver in this transfer? Does a system, ex., a bank, monitor your fare payment right away? The answer is No.
What has happened here is that there is no third-party monitoring the operation.
But removing surveillance systems, especially in trade and money transfer, is tricky and very dangerous in the digital world. At this moment, despite the monitoring systems in the payment gateways, many internet frauds are still occurring worldwide.
Satoshi Nakamoto aimed to find a safe way to eliminate central monitoring systems, thereby increasing people’s mastery and control over their property. Satoshi created blockchain technology on the way to achieve this goal.
What is a blockchain, in simple words? How does blockchain work?
You’ve probably heard of blockchain technology if you’ve been following digital currency or cryptocurrency news for the past few years. For the first time, Stuart Haber and W. Scott Stornetta introduced the blockchain concept in 1991 as a chain of cryptographically secure blocks. Over time it became popular among databases worldwide. Digital business owners thought of using this technology to improve their business. It eventually became popular worldwide.
Blockchain technology uses encryption to increase security in buying and selling digital currency and exchanges. Contrary to banking systems that operate in a specific and so-called centralized location, the data center where blockchain networks are located is entirely decentralized and distributed worldwide.
The place where blockchain information is kept is called a “distributed ledger.” The distributed ledger is accessible to all network members and in full detail. Even the most minor transaction changes can be transparently viewed and reviewed by all. This network is a computer chain that checks and confirms the transactions’ correctness between the first and second users. When it is approved, the transaction information will be added to the blockchain.
Blockchain is an information recording/reporting system. The difference is that the information is shared among all network members using encryption and data distribution; the possibility of hacking, deleting, and manipulating the recorded information is nearly excluded. The concept of blockchain first appeared with the emergence of Bitcoin.
What are the most essential features of the blockchain network?
Two features of the blockchain that make it possible to transfer money without an intermediary are decentralization and transparency.
This system’s registration of financial transactions is chained, and no central monitoring system supervises it. The network automatically guarantees the security of successful transactions.
Any average person can monitor transactions with a computer and get rewarded for finding and recording successful transactions. This feature also prevents the network from being hacked. Because according to Satoshi himself: “Helping to record successful transactions in the blockchain is not only easier but is also more profitable than hacking the entire network.”
After the introduction of Bitcoin to the world and its remarkable success, the activity in the blockchain and decentralized business intensified, and alternative currencies (ALTCOINS) entered the market. Altcoins entered the cryptocurrency market with a different purpose than Bitcoin and offered their blockchain network to companies and organizations. Litecoin currencies were among the first alternative currencies created with the Bitcoin code, but they were upgraded and became independent over time.
The first alternative currency that introduced the concept of decentralized business in the form of a project was called Ethereum, which will be introduced later in a separate article.
How does Blockchain work?
All data in the blockchain network enters the database in a structure consisting of “Blocks.” each block is formed as a continuation of the previous block and contains information that connects it to the previous block.
Since these blocks connect through information, they form a “chain” in which the blocks are placed together in order of construction. The first network block before which no other block is called “Genesis Block.“
Blockchain technology uses cryptography to increase security in buying and selling digital currency; contrary to banking systems that operate in a specific and so-called centralized location, the data center where blockchain networks are located is entirely decentralized and distributed worldwide.
The place where blockchain information is kept is called a “distributed ledger.” the distributed ledger is accessible to all members of the network and full detail; even the most minor changes in transactions can be transparently viewed and reviewed by all. This network is a computer chain that checks and confirms the transactions’ correctness between the first and second users. After it is approved, the transaction information is added to the Blockchain.
To better understand how Blockchain works, let’s look at Bitcoin transactions. The Blockchain stores all the data and details of each transaction made with this cryptocurrency and prevents a user from trading the identical Bitcoin more than twice (in a way, intending to commit fraud).
When new information stores in a block, it is added to the Blockchain. And in this way, with a chain of several interconnected blocks, the overall structure of the Blockchain is formed. For a block to be added to the Blockchain, the following four events must happen:
- In the first step, a transaction must be made.
- After purchase, your transaction must be reviewed and approved. This process is done by a network of thousands of computers distributed worldwide. This network checks through computers that the transaction is done according to your order.
- Each transaction must be stored inside a block. After checking and confirming the authenticity of your transaction, the information is recorded and stored in a dedicated block. There, your transaction data sits alongside countless similar transactions.
- Each block must be given a hash (code): after all transactions in a block have been verified, that block must be given a unique identification code called a hash. After obtaining a specific hash, that block is added to the blockchain network.
What’s Blockchain Hash function?
Each of the blocks in a blockchain has a feature called a Hash. A string hash is a textbook generated from a particular mathematical function, and its part is to help prevent fraud in the system. The Hash of data or input is permanently fixed. Using the Hash result prevents fraud and changing the information recorded on the blockchain. Besides having a Hash themselves, blockchain blocks contain the Hash of the former block. The fewest change in the information of a block changes its Hash entirely and makes the blockchain invalid.
BUT what if someone changes the content of one block and updates the Hash of posterior blocks? This is possible, but the blockchain distribution solves this problem. Blockchain data isn’t stored on a specific computer or server. Every computer or system connected to the network receives a copy of the information.
Any computer that connects to the network and receives a copy of the blockchain is called a node.
When you connect to a blockchain as a node, you get a copy of its entire data. Nodes are algorithmically programmed to execute transactions based on a majority consensus. Information changes are only possible if the majority agrees.
Bitcoin and decentralized digital currencies are the most critical and successful applications of blockchain technology. For example, when using Bitcoin for your transaction, the possibility of fraud, double money spending, and reversal of transactions is eliminated. But this technology can have many other applications besides digital currencies, and it can be used wherever there is a need for a safe space to store data.
For example, electronic and fraud-free elections can be held on the blockchain. This innovation can significantly reduce the risk of election fraud and the need for direct human intervention.
Another example is that blockchain can be used in the supply chain and transportation. Factories and manufacturing companies can record their goods and transportation information on the database from the beginning until reaching the customer. Therefore, the authenticity of the goods and the quality of raw materials will be guaranteed for the customer.
Through blockchain technology, it is possible to create a kind of governance in a system, just like a society or an organization, where everyone can contribute to advancing that system according to their shares and powers.
What is a token in crypto?
A token is a digital asset that can be transferred to others and stored value. Before entering the world of digital currencies, tokens existed in computer systems as a type of cryptographic license. Various companies create tokens based on blockchain technology. Each token has its application.
In the cryptocurrency world, tokens are those digital currencies that do not have their blockchain and use so-called platform blockchains to record their transactions. Of course, on a larger scale, any asset in the world of cryptocurrencies can also be called a token. Platform blockchains such as Ethereum, Binance, and Cardano allow the creation of decentralized applications through smart contracts.
Using these facilities, people create and use the tokens they need without having to design a blockchain network. To better understand the answer to what a token is? It is better to get to know smart contracts a little more.
What is a smart contract?
Blockchain technology was introduced to the world by Satoshi. Using blockchain makes transferring assets between people in a decentralized network possible. Although this event was considered revolutionary in the financial industry, it needed more possibilities to engage in other daily issues such as file transfer, the creation of decentralized exchange, and the Internet of Things.
The development of smart contracts in the Ethereum blockchain network brought blockchain technology into other areas of life.
A smart contract acts as a deterministic program; in the sense that when certain conditions are met, a specific activity on the network is automatically performed. A smart contract is a code in a distributed system that uses “if…then…” rules. With these explanations, the main features of a smart contract are as follows:
- The activity is done on decentralized systems.
- The terms and conditions are final and unchangeable.
- Programs run automatically.
- Its codes cannot be manipulated.
- Customization is available to build a variety of decentralized applications before execution.
- People do not need to know or trust each other in the activity using smart contracts.
- All transactions in contracts are transparent and available to everyone.
Making smart contracts with the above features make it possible for companies and individuals to create their application using smart contracts without building a blockchain and use their tokens to manage activities in the network.
Because Ethereum made it possible to create smart contracts and tokens for the first time, most of the tokens have been built on the platform of the Ethereum network. Today, tokens can be created in other blockchains such as Solana, Avalanche, and Cardano digital currency, and many new currencies have been made based on these networks. Earlier cryptocurrencies such as Bitcoin and Lite coin do not support token creation.
What is white paper?
In 2008, an anonymous individual or group of individuals known as Satoshi Nakamoto published a white paper that proposed a peer-to-peer electronic cash system known as Bitcoin.
The white paper provided the technical details and foundational principles that have come to define the world’s first decentralized cryptocurrency.
Bitcoin’s most innovative feature is that it is a trustless system that operates without intermediaries or third-party oversight. Instead, Bitcoin relies on complex cryptography and game theoretic incentives to enable secure transactions verified by a distributed network of nodes.
The white paper outlines the technical specifications of the Bitcoin protocol, including information on how transactions are validated and recorded in the blockchain and how new bitcoins are created through the mining process.
Additionally, the white paper discusses the role of the decentralized network of nodes in providing security and preventing double-spending. The publication of the Bitcoin white paper sparked a revolution in finance and technology, inspiring the creation of thousands of other cryptocurrencies and blockchain-based applications.
While Satoshi Nakamoto’s true identity remains a mystery, their vision for a decentralized, trustless financial system lives on through the ongoing development and adoption of Bitcoin and other cryptocurrencies.
Purpose of a White Paper
A white paper in cryptocurrency serves as a detailed document that outlines a project’s goals, objectives, technical specifications, and strategy for achieving them.
It is a comprehensive document that clearly and concisely explains the project, how it works, and why it is crucial. It offers potential investors and users a deeper understanding of the project, outlining the benefits of the project and how it differs from other blockchain-based projects in the market.
In short, a white paper is the project’s backbone, acting as a formal plan and showcasing its potential to investors and the broader crypto community. Usually, a white paper includes information on the token economics or the fundamental value proposition of the cryptocurrency.
Finally, it should include the financial goals of the company associated with the project, such as fundraising targets and planned token distribution. The significance of a white paper lies in its ability to instill confidence in investors that the project has clear goals, plans, and strategies for realizing these objectives.
Can Bitcoin be hacked? What would it take to hack Bitcoin?
Bitcoin network security is one of the main concerns of digital currency users. Although this network is highly secure, it is constantly attacked by hackers. In this case, the first and last successful attack was known as the “Value overflow incident ” in 2010. except for this case, and over the past decade, Bitcoin has proven its security against cyber-attacks well.
Bitcoin is a digital currency implemented on the platform of blockchain technology in a completely “decentralized” way. There is no centralized computer or server to break into in the Bitcoin network. Security and resistance to hacking are one of the advantages of Bitcoin and other digital currencies compared to fiat currencies.
Due to millions of miners, hackers must hack a “decentralized network” instead of hacking a server to break into the Bitcoin mechanism. So how to hack Bitcoin? Is such a thing possible? How successful can an attack on a decentralized network be?
Hackers have repeatedly attacked Bitcoin wallets and exchanges, and some have been successful. But this is not a sign of the vulnerability of the Bitcoin network and its blockchain, but rather the weakness of Bitcoin-related platforms. These attacks are not considered hacking technically, but they can cast doubt on the speed and reliability of the network. The following mentions some of the most critical attacks on the Bitcoin network.
One of the most critical cyberattacks by hackers to destroy or weaken the Bitcoin network is the so-called “Zero-day attack.” A zero-day attack exploits a potentially severe security weakness in software that even the developer is unaware of. One of the most common targets for zero-day attacks is the Internet of Things (IoT).
A zero-day attack is not only a potential threat but an actual threat to Bitcoin. This has happened to Bitcoin, and in the history of digital currencies, it is called the “Value Overflow Incident.”
The value overflow incident; the person who was able to generate 184 billion Bitcoins
On August 15, 2010, one of the users of “Bitcoin Talk” with the username “jgarzik (Jeff Garzik)” noticed a strange thing in the Bitcoin network. In block number 74,638, two transactions were registered, in each of which more than 92 billion bitcoins were exchanged! he immediately reported this on the Bitcoin talk forum.
- After further investigations, it became clear that an anonymous hacker had managed almost to destroy Bitcoin! This hacker could generate over 184 billion Bitcoins from nothing in a few moments. While in the main code, it is stipulated that only 21 million Bitcoins will be mined. This means the hacker could circulate 8,784 times as many fake coins as the total Bitcoins.
…The only thing that saved Bitcoin from early destruction was the quick reaction of Satoshi Nakamoto, the anonymous creator of Bitcoin. Three hours after this report, Nakamoto was able to eliminate this bug in collaboration with Gavin Andresen, one of the Bitcoin developers. He quickly created a hard fork (in a massive update), and in the new chain, he destroyed all the coins made by the hacker.
In the hours after the incident, two Bitcoin networks were up and running due to Nakamoto’s update, and many miners were mining the faulty chain. But according to Nakamoto, 19 hours after the hack, all the miners left the wrong chain and entered the new chain.
This attack was one of the biggest boons for Bitcoin in its early days. If no one noticed this software flaw and this attack happened a few years later when the price of Bitcoin had reached several thousand dollars, and its market value went tens of billions of dollars, probably the price of Bitcoin would reach close to zero in a few moments.
There are other ways to damage the Bitcoin network. Although these attacks cannot technically be considered “hacking,” they can cause damages such as reducing network speed or losing Bitcoin credibility. In this case, we can mention spam attacks, 51% attacks and hacking platforms relating to bitcoin.
“Spam” refers to the misuse of internet tools such as e-mail, social networks, messengers, etc., to send countless messages to those who mostly have no interest in receiving those messages. Spammers try to slow down the network by creating large transactions. Bitcoin code solves this issue, and the network rejects zero-fee transactions. Therefore, the only way for spammers to attack Bitcoin is to register many transactions with reasonable fees that do not make economic sense.
As the network speed decreases, transactions are confirmed later than usual, which discourages users. Those who benefit the most from spamming the Bitcoin network are fans of some Altcoins and Bitcoin forks. The goal of some of these spams is to dissuade users from Bitcoin and drive them to other coins.
Suppose a spam attack occurs simultaneously as the demand for transactions in the network increases (such as on days when significant price changes occur). In that case, it will have a large and destructive effect on the network’s efficiency, and the speed of transactions will likely drop drastically.
The expansion of solutions such as Segwit and Lightning networks, which improve the scalability of the network, can eventually protect Bitcoin from spam. Because the improvement of scalability will increase the cost of spam, the motivation of attackers to attack the network will be less.
- SegWit network: this soft fork aims to provide conditions to protect the malleability of transactions and, in the next step, to increase the block capacity in the Bitcoin blockchain network.
- Lightning network: this network aims to make fast and fee-free transactions in Bitcoin.
But spammers can also have a solution to increase the cost of spam. In this way, if many miners work for the benefit of spammers, they can spend the profit from mining on spam expenses. But why is this not happening:
During a spam attack, the network speed decreases drastically, and the transaction confirmation cost increases. These two factors can cause a sharp drop in the price of Bitcoin. As the price of Bitcoin falls, the mining reward will decrease to the point where mining is practically unprofitable. If the miner who cooperates with the spammer cannot finance the spam, the attack will fail.
The 51% attack represents a situation in which some miners or mining pools try to obtain the majority of the hash rate of the Bitcoin network. Organizing this massive attack requires a lot of energy and processing power; this energy should be more than the total energy consumed by all the miners currently mining Bitcoin.
In other words, someone who wants to organize a 51% attack must have a hash rate equivalent to the current hash rate of the network. The number of Bitcoin miners worldwide has increased, and the mining machines are becoming more powerful daily. As a result, the hash rate of the Bitcoin network has increased significantly.
Although a 51% attack on Bitcoin is hypothetically possible, with the current power of the network, such an attack will not be possible in real. Trying to achieve this attack requires unimaginable energy and money. However, someone who can take over 51% of the network can:
- Use the same coin twice
- Prevent transactions
But the success of a 51% attack does not mean the destruction of the network. Someone who owns 51% of the network’s hash rate cannot:
- Returns previously confirmed transactions.
- Create bogus transactions (that didn’t exist before).
- Steal assets from a specific address.
- Generate new coins.
As mentioned, hacking Bitcoin and its blockchain is practically impossible. But the platforms, like wallets and exchanges, can be hacked and have been hacked many times before. We can mention Cryptopia, Bitfinex, MTGax, Coincheck, Upbit and Binance among the most significant exchanges that hackers have attacked.
As mentioned, Bitcoin wallets are a good target for hackers too. If someone can access your wallet’s public and private keys simultaneously through any means (including phishing), they will have access to virtually all of the wallet’s assets. Of course, this is limited to online wallets, especially web wallets, not hardware wallets such as Ledger, Trezor and KeepKey, which are highly secure.
Hacking a wallet or exchange is not uncommon, and news about these attacks can be seen daily in cryptocurrency news outlets. But remember that hacking exchanges and wallets in no way mean Bitcoin and the blockchain network is being hacked, just as hacking a website does not mean hacking the whole Internet.
How to mine Bitcoin? The complete guide to mining BTC
As mentioned, Bitcoin is a decentralized currency and network not affiliated with any specific country, institution or company. The decentralization of Bitcoin means that no one owns or controls the Bitcoin network; therefore, anyone anywhere in the world can be a part of the Bitcoin network by connecting to it.
In general, the control of Bitcoin is in the hands of its users, not one or more specific people. Bitcoin mining is the process of creating new Bitcoins with a computational solution. Computers do mining with very high computing power. The remarkable thing is that these issues are so complex that humans cannot solve them manually.
Bitcoin network security
As mentioned, Bitcoin is a decentralized network, so the question is, when you send someone Bitcoin, who supports your transaction to make the transfer? Who validates or maintains the security of Bitcoin transactions? Here is the answer: volunteers who are called “miners.” They provide their devices and hardware to the Bitcoin network so that the Bitcoin network pays them a reward in exchange for maintaining the network’s security. This reward is the Bitcoin generated from the mining process.
Bitcoin extraction, also called mining, includes a series of complicated calculations to solve complex mathematical equations based on the SHA256 cryptographic algorithm. In other words, with their hardware, miners help keep the Bitcoin network safe, and the transactions of this network reach their destination, almost like what the bank’s computers or servers do to confirm your bank transaction.
The scientific name of mining is “Proof of Work” (POW). During mining operations, miners must compete with each other to solve mathematical equations in a complex process. When the miner gets the answer, Bitcoins are generated and awarded to the winning miner as a reward (a little bit of a Bitcoin).
What is a proof of work algorithm in Bitcoin mining?
Proof Of Work (PoW) is a mechanism in which new blocks of transactions will be added to a cryptocurrency’s blockchain. This process generates a hash (a long string of characters, which we discussed above) corresponding to the target hash for the current block. The miner who does this wins the right to add that block to the blockchain and receive rewards.
In simple words, the Bitcoin network requires miners to prove their loyalty to the network by devoting their processing power to solving math problems that require electricity. With the help of this process, if someone wants to attack the network, they have to have more processing power than other Bitcoin miners.
Decentralized distribution of money
Besides verifying transactions, mining causes Bitcoin units to be produced uniquely and according to a predetermined schedule. Unlike traditional currencies(fiat) issued by central banks, in Bitcoin, everyone can participate in issuing money (Bitcoin units).
Bitcoin network difficulty
Due to Maintain the network’s stability and avoid extracting all the Bitcoin units too quickly, there is a measure called “Difficulty” in the Bitcoin network. Bitcoin blocks (packets containing transactions) are generated every ten minutes.
- The difficulty of the Bitcoin network shows how difficult it is to solve an encrypted problem.
- The difficulty of extracting new blocks increases or decreases over time according to the number of miners in the network.
- Increasing the difficulty of the Bitcoin network is necessary to maintain the target block time.
If the processing power of Bitcoin miners becomes too high, miners may be able to produce blocks and mine bitcoins earlier than ten minutes. Such an issue causes all Bitcoin units to be mined very quickly.
Due to the difficulty mechanism, when the processing power of the miners is such that the time to reach the answer of the mathematical equation is reduced, the difficulty of mining increases to get the answer in the same 10 minutes.
On the other hand, if the miner’s processing power decreases, and the time to create a block exceeds ten minutes, the difficulty will reduce until it reaches the same 10 minutes again. The total number of Bitcoins that can be mined is limited to 21 million units; after that, no more Bitcoins will be produced.
Bitcoin scarcity; what is Bitcoin halving, and what is it used for?
Every four years (every 200,000 blocks), during an event called “Halving,” the production rate of new Bitcoins is suddenly halved. This mechanism increases the scarcity of Bitcoin. The most recent halving was in 2020, producing 6.25 Bitcoins every ten minutes. It will decrease to 3.125 after the next halving in May 2024. at the time of updating this article, more than 19 million Bitcoin units have been mined.
Due to the halving of the production rate of new bitcoins after every four years, it is predicted that it will take until 2140 to mine all the Bitcoin units. The number of halving that have happened since 2012 are as below:
- 2012: 25.00 BTC
- 2016: 12.50 BTC
- 2020: 6.25 BTC
Technically, the Bitcoin network and mining process is very complex, and what was said was just a simplified summary for basic understanding.
What equipment is required to start mining Bitcoin?
Mining is a process that leads to the creation of new Bitcoins. At the same time, mining means confirming recent transactions in the blockchain network. This process will also result in the development of the distributed ledger.
After creating a new block, the process continues in the same way. Keep in mind that this process (Mining) is difficult and expensive. But, if it is done permanently, it will profit well. Bitcoin mining is attractive to most investors in this market; because they receive a good reward after mining each new Bitcoin.
The type and number of mining equipment can be different according to the size of the Bitcoin farm. For example, it is obvious that the equipment required for a large farm is different from the equipment required for a small farm; but apart from these, you definitely need the following things to do Bitcoin mining:
- Mining device or ASIC
- Bitcoin wallet
- Internet access
- Electricity, cable and suitable electrical equipment
- Ventilation equipment (fan)
1. Mining device or ASIC
In the early days and months of Bitcoin, mining was done with CPU or regular processors; in 2010 and early 2011, if you dedicated your computer to Bitcoin mining, you could probably mine more than fifty Bitcoin per day.
Today, with the expansion of the Bitcoin network and the increase in the power of its miners, mining Bitcoin with a home computer is nothing more than an illusion, and economical mining of this digital currency is only possible with special devices. Bitcoin mining with regular computers or mobile phones only causes damage to the hardware and could be more cost-effective.
To mine Bitcoin cost-effectively, you need a specialized device known as an ASIC. Bitcoin mining devices, like cell phones, come in different brands, designs and models. Each device may differ from another in the following aspects:
- Brand and model: The manufacturer of the device and its model. Example: Bitmain Antminer S9.
- Processing power: The processing power of the mining device is displayed in terms of (TH/S). Example: 14TH/S – means this device has 14 terahertz of power.
- Power consumption: the amount of power consumed by the device in watts. Example: 1400W.
2. Bitcoin wallet
As a miner, you need a Bitcoin wallet to receive and store your earnings. Since Bitcoin is the top digital currency in the market, there are a lot of suitable wallets for it. Bitcoin wallet is divided into two types of software and hardware. Bitcoin wallet software is free; you can install one on your PC or smartphone. The best Bitcoin wallet is safe and reliable, and the user feels comfortable working with it.
Due to the decentralized nature of digital currencies, where everyone is responsible for their assets, the main factor in choosing a wallet should be its validity and security. Although there are more than a hundred wallets with different names for Bitcoin, in this article, we will introduce nine wallets that are the best options for storing Bitcoin in 2023:
- Trust Wallet (phone): the best choice for beginners
- Ledger wallet (hardware): the most secure option
- Trezor wallet (hardware)
- Mycelium wallet (phone)
- BlueWallet (phone)
- Electrum wallet (desktop and phone): the best choice for professionals
- Exodus wallet (desktop and phone)
- Blockchain.com Wallet (Web-based)
3. Internet access
With internet access, it is possible to mine Bitcoin. For mining Bitcoin, you must connect to other nodes to receive and confirm new transactions.
4. Electricity and suitable electrical equipment
The most important thing to consider for Bitcoin mining is electricity. Mining devices use a lot of electricity, and you must have the right power and electrical equipment to operate safely.
5. Ventilation equipment
During mining, the mining devices produce a lot of noise and heat. This issue must be solved with some cooling equipment and fans.
Tips before buying a mining machine
Buying a mining device must be done with complete research and considering some conditions. In short, the most important factors to consider when purchasing devices are:
- Device power: How many hashes does your Bitcoin mining machine generate per second? More hash equals more power.
- Power consumption: The power consumption of the device is critical and directly affects profitability; The lower the power consumption and the higher the power of the device, the more profitable the device is.
- The price of the extraction device: This factor should also be considered related to your budget. The payback time is directly tied to the cost of the device.
Introducing the best Bitcoin mining device
From 2014 to now on, more than a hundred Bitcoin mining devices have been released to the market. Of course, most of these devices have lost their efficiency and profitability today. Mining device manufacturers are different in terms of reputation and popularity. Currently, the top five miner manufacturers are:
- Bitmain – manufacturer of Antminer devices
- MicroBT – manufacturer of Whatsminer devices
- Cannan – manufacturer of Avalon devices
- Innosilicon – manufacturer of Terminator devices
- Ebang – manufacturer of Ebit devices
Some miners may still use older models such as Antminer S9j. The most important thing is the profitability, the life of the device and the return-on-investment time, and not necessarily the newness of the device.
Is it possible to mine other digital currencies with the Bitcoin mining device?
The answer is almost negative. Most mining devices only support one specific encryption algorithm. For example, the Bitcoin mining algorithm is SHA-256. So you can only mine digital currencies that use the same algorithm as Bitcoin mining devices. These currencies include Bitcoin, Bitcoin Cash, Bitcoin SV and some digital currencies.
Of course, models may be released in the future that supports other algorithms other than SHA-256, in which case, the range of digital currencies that can be mined with one device will increase. Also, remember that one mining device cannot mine two or more cryptocurrencies simultaneously.
BTC mining profitability
The best way to Calculate the profitability of mining Bitcoin and other digital currencies is to use a mining calculator. You can calculate your profit in the mining calculator according to the power of your device, the amount of electricity consumed by the device and the electricity price you pay.
To better define “mining profitability,” the miner’s income is directly tied to the investment return time. What matters most is the investment return time, not the amount of bitcoins the device can earn. In other words, a device with a 6-month return on investment is more valuable than a device with a 10-month return on investment, Even if the second device has a higher hash rate.
The payback period is when the invested money (for the purchase of equipment and devices) returns, and after that, what remains at last is net profit. Many factors can be involved in the profitability of mining or, more precisely, in the time of investment return, But the following are the most critical factors:
As we explained above, mining difficulty is a parameter built into the Bitcoin network so that Bitcoin blocks are created approximately every ten minutes, neither earlier nor later. In other words, for miners to not be able to produce new blocks and Bitcoins all at once through the high power of their hardware, the more the miners’ processing power increases, the more difficult it is to mine.
Therefore, if the price of Bitcoin is low, the mining difficulty can significantly reduce profitability. Increasing the difficulty of mining means that you need more processing power to maintain your profitability, which you need to use more powerful mining machines to achieve.
Electricity prices and cost
The electricity consumption of the device and the electricity price directly affects the profitability of mining. For this reason, you must calculate the electricity consumption costs well to measure the return on your investment. If the high price of electricity is combined with the difficulty of mining and the low price of Bitcoin, it will cause an irreparable loss to miners.
The current price of Bitcoin is another essential factor in the profitability of mining. For example, 2018, when the price of Bitcoin reached $3,200, many miners turned off their devices; because the mining profit did not even cover the electricity costs.
Is mining Bitcoin worth it in 2023?
The answer to this question is positive. Yes, Bitcoin mining is still profitable in 2023, but the reality is that it may not be as rewarding as it was in the past. However, there are still thousands of people around the world using home miners to earn Bitcoin.
It is also worth noting that many people do not use Bitcoin miners only to make money. Many people mine BTC to strengthen the Bitcoin network and decentralize the network hash rate due to their excellent understanding of the blockchain ecosystem.
Note that the volume of sound and heat generated by mining devices cannot be easily tolerated. Of course, if you live in a small apartment, making money from home, Bitcoin mining is not a good idea. Also, if you live in hot weather areas, you should know that these devices produce considerable heat and may disrupt your daily life.
For this reason, many Bitcoin miners have concluded that, in many cases, the cost they pay for electricity is much higher than the reward they receive from the Bitcoin network. Therefore, you should consider these calculations before buying your home miner.
How to earn free Bitcoin?
Gavin Andresen, also known as Satoshi Nakamoto’s substitute, created a site in 2010 that gave users free bitcoins. To receive five bitcoins, users only had to fill in a Captcha box, and after writing the correct sequence, they would win this prize. On this site, nearly 750 bitcoins were given to users for free. Is there still any way to get free bitcoins? There are two critical points about this:
- Popular sites like Coinbase, CoinMarketCap, SatoshiLab, and Airdrop.io give their users free bitcoins, which can prove the reality of free bitcoins.
- There are many methods, such as airdrop, bug bounty, telegram bots, and even exchange referral programs to earn free bitcoins, but only some of these methods are profitable, and the rest are just a waste of time.
…What are bitcoin mining pool?
After preparing the device and choosing the Bitcoin wallet, the most important part of the process is joining the mining pool and starting to work. Due to the rapid growth of the mining industry, you probably need to join a mining pool to mine Bitcoin or any other currency.
A mining pool, is a virtual location (like a website) where miners gather their processing power to mine a block. In this method, each miner benefits based on their processing power. It can be said that miners around the world provide the processing power of their hardware to a mining pool, and the mining pool competes with other pools on behalf of all miners in finding the equation of blocks.
The truth is, with the strengthening of Bitcoin miners and the influx of heavy capital to buy mining hardware, small miners can no longer make a profit without joining the mining pool; and only some large mining farms with several tens of thousands of machines can cope with direct mining (solo mining). The general process of connecting to a mining pool is very simple:
- After researching, you sign up on a mining pool’s website.
- You give your wallet address to the mining pool.
- You get the settings for your devices from the mining pool and activate your devices with it.
Miner devices, especially new models, have a simple user interface that anyone can connect it to the mining pool very quickly.
How to mine Bitcoin without hardware and other equipment?
If you don’t have the right place, the right electricity or enough equipment to mine Bitcoin and you are still determined to mine Bitcoin, you can go for “cloud mining”.
What is cloud mining?
Cloud mining refers to those services and companies that sell you the processing power of their hardware and do the work related to mining and equipment maintenance. In fact, with cloud mining, you can rent mining equipment from cloud mining companies or buy processing power (hash rate) from them without buying expensive hardware equipment or providing electricity and a suitable location.
With this, all you need is a simple computer or mobile phone to access your account and receive your profit in your wallet. The advantages of cloud mining are:
- You don’t need a place to mine.
- You do not need to provide electricity and electrical equipment.
- You don’t need mining and other equipment.
This was just one side of the coin. In cloud mining, due to the lack of transparency of activities, the risk of fraud is very high. In most cloud mining schemes, which are actually a kind of Ponzi scheme, no mining is done with your money, but you are only slowly paid a small amount of Bitcoins, which will eventually be less than your initial investment.
Simply put, most cloud mining companies are either working on unethical business models or just looking to empty your pockets. Unethical models mean that in the end you will either lose money or your profit will be less than if you invested directly in Bitcoin. Therefore, the disadvantages of cloud mining are:
- Fraud risk
- dark pool extraction
- Lower profit – operators have to cover their costs.
- Price fluctuations that may reduce profits or stop operations.
- Lack of control and flexibility in the process
How long does it take to mine 1 Bitcoin?
Due to difficulty rate the process of discovering bitcoins takes 10 minutes and the miner who discovers a new block is rewarded with 6.25 bitcoins (currently); But it is important to know that the entire network of Bitcoin miners compete to discover a new block.
This means that eventually only one miner will successfully discover a block, and since there are probably thousands of miners trying at the same time, the chances of a single person discovering a block are very small. The more miners there are in the network, the more difficult the mining process will be. As a result, each block needs more computing power to be solved.
Can you legally mine Bitcoin?
In some countries mining bitcoin is illegal. Therefore, it is important to know the rules of Bitcoin mining. We have to admit the fact that big investors in the world will never invest in a market that does not have credit and legal license. Most importantly, the lack of control and monitoring processes on digital currencies and besides increasing fraud methods through it, have caused doubts in some governments policies against bitcoin.
However, instead of denying the reality of digital currencies such as Bitcoin, many countries have tried to define frameworks for it so that they can control the future of the market and gain benefit from it.
Can I mine Bitcoin on my phone?
Smartphones use different computing hardware. Therefore, they can be used to mine Bitcoin and other cryptocurrencies. But in the meantime, one should pay attention to a very important issue, and that is the difference between feasibility and profitability of a process. The feasibility of an event or process does not necessarily mean that it is profitable.
Mining Bitcoin with a phone is like mining gold with a spoon. Although it is possible to use a spoon to dig up the gold stones and collect them bit by bit to finally melt them into gold, this process is so long that the gain is nothing compared to the time lost. On the other hand, the mismatch between the work and the tool, causes the tool to be lost. Digging the rock with a spoon will destroy the spoon more than it will crush the rock, and the miner will have to pay more for the tools.
The mining process requires continuous and heavy calculations, during which the hardware heats up quickly. This problem leads to the damage of the hardware and finally their destruction. In the rest of this article, we will examine why the process of mining Bitcoin with a phone is not cost-effective.
How to mine Bitcoin with PC?
Yes, this is theoretically possible. Since a few years ago, many software for mining digital currencies with personal computers have been produced, which allows miners to mine bitcoins using their laptops. However, but the truth is that using laptops and ordinary computers to mine Bitcoin is 99% unlikely to be profitable and cost-effective. The remaining 1% is due to the fact that you may be able to get a small amount of bitcoin with a laptop or home computer graphic card in the long run, which is not profitable at the current price, but the value of your bitcoins will increase greatly in the future.
What Can You Buy With Bitcoin?
Bitcoin can be used to purchase a growing number of goods and services. As more merchants and businesses begin to accept Bitcoin, the list of things that can be purchased with it continues to expand. Here are a few examples of what can be bought with Bitcoin:
- Online purchases: Many online retailers accept Bitcoin as a form of payment, including Overstock.com, Newegg, and Shopify.
- Travel: Some travel booking websites, such as Expedia and CheapAir, accept Bitcoin for hotel bookings and flight tickets.
- Food and dining: Many restaurants and cafes accept Bitcoin as payment, especially in larger cities around the world.
- Gaming: Some online gaming websites and platforms allow users to purchase games, in-game items, and virtual currency using Bitcoin.
- Gift cards: Various online retailers sell gift cards that can be purchased with Bitcoin, including Amazon, iTunes, and Google Play.
- Art and collectibles: Bitcoin can also be used to buy art, collectibles, and other unique items from online marketplaces like OpenBazaar and Bitify.
It’s worth noting that the acceptance of Bitcoin as a form of payment is still not universal, and you should always check if a merchant accepts it before attempting to make a purchase.
What will be after mining all 21 million bitcoins
Once all 21 million bitcoins have been mined, no new bitcoins will be created. The bitcoin supply will have reached its maximum limit, and from that point on, it will be a matter of managing the existing supply to meet demand.
The hope is that by that time, bitcoin will have become a widely-accepted currency and the supply will be able to meet the needs of the community. However, it may take several more years for all bitcoins to be mined, as the mining process gets increasingly difficult and time-consuming over time.
The pros and cons of Bitcoin
Bitcoin, like everything else in this world, is not perfect, but its revolutionary innovation has made it continue its way despite all the problems. In this article, we describe the most important advantages and disadvantages of Bitcoin in simple language so that you can get a correct view of it.
Bitcoin is a decentralized peer-to-peer digital currency and there is no authority or power to supply it. Bitcoin network works based on encryption protocol and its database is completely public. No error in this network is defined and it is also resistant to corruption. There is no centralized fund or regulatory system for transactions, and these transactions take place directly between users of the Bitcoin network.
Ever since Bitcoin was invented by its anonymous creator, Satoshi Nakamoto, its value and users have been on an upward trajectory. A large number of online stores and service provider websites support Bitcoin as a payment method, and on the other hand, investing in this digital currency is considered as one of the most profitable types of investment; at the same time, due to extreme price fluctuations, the possibility of loss is also high. As the leading digital currency, Bitcoin has several advantages that we will explain below.
what are Bitcoin advantages?
Bitcoin is a digital currency and uses encryption algorithms and protocols; So it’s practically impossible to get around. In Bitcoin, no one can manipulate another person’s account. Bitcoin has several advantages over traditional forms of currency and payment systems. Here are some of the key advantages:
Bitcoin is not controlled by any central authority or government. Transactions are verified by a network of nodes around the world, making it a decentralized currency.
Bitcoin transactions are highly secure due to the use of cryptographic algorithms. This makes it difficult for fraudsters to tamper with transactions.
Bitcoin transactions can be made anonymously, which is a big advantage for people who value their privacy. However, it is worth noting that transactions can still be traced back to a specific address.
Low transaction fees
Bitcoin transactions typically have lower fees compared to traditional payment methods like credit cards or bank transfers.
Bitcoin can be accessed from anywhere in the world with an internet connection, making it a truly global currency.
Bitcoin has a limited supply, which means that its value is not subject to inflation in the same way that traditional currencies are.
All Bitcoin transactions are recorded on a public ledger called the blockchain, which makes the system transparent and tamper-proof.
Overall, Bitcoin offers a number of advantages over traditional payment methods and currencies, which is why it has become increasingly popular in recent years.
what are Bitcoin disadvantages?
Like any other technology or asset, Bitcoin has its disadvantages as well. Here are some of the commonly cited ones:
Bitcoin’s value has been highly volatile since its inception. Its price can fluctuate rapidly in a short period of time, making it difficult for businesses and individuals to rely on it as a stable currency.
Lack of Regulation
Bitcoin operates outside of the traditional financial system and is not backed by any government or central authority. As a result, there is no regulatory framework to govern its use, which can lead to illegal activities and market manipulation.
Although Bitcoin is touted as a secure way to transfer funds, there have been instances of hacks and thefts of Bitcoin exchanges and wallets. Once stolen, there is no way to recover the funds.
Despite growing acceptance, Bitcoin is not yet widely accepted as a form of payment, which limits its usefulness in everyday transactions.
Bitcoin mining requires significant amounts of energy, which contributes to climate change. Critics argue that the environmental impact of Bitcoin mining is not sustainable in the long term.
These are just a few of the commonly cited disadvantages of Bitcoin. However, it is important to note that many of these issues are being addressed through ongoing technological advancements and regulatory efforts.
How much will I get if I invest $100 in Bitcoin?
The answer to this question depends on several factors, including the current price of Bitcoin and how long you plan to hold onto your investment. Bitcoin is a highly volatile asset, meaning its price can fluctuate rapidly and significantly over short periods of time.
Forexaple as cutoff date of September 2021, the price of Bitcoin has fluctuated wildly over the years. In 2009, when Bitcoin was first introduced, its price was essentially zero. However, in 2017, it reached an all-time high of nearly $20,000 per coin. Since then, the price has continued to fluctuate but has generally remained above $10,000.
If you were to invest $100 in Bitcoin at a price of $10,000 per coin, you would be able to purchase 0.01 BTC (Bitcoin). However, the value of your investment would depend on the price of Bitcoin at the time you decide to sell.
For example, if the price of Bitcoin were to increase to $50,000 per coin, your 0.01 BTC would be worth $500. If you were to sell your Bitcoin at this price, you would make a profit of $400 (minus any transaction fees or taxes).
On the other hand, if the price of Bitcoin were to drop to $5,000 per coin, your 0.01 BTC would be worth only $50. In this scenario, you would lose $50 on your investment.
It’s worth noting that Bitcoin, like all investments, comes with a level of risk. While some investors have made significant profits from Bitcoin, others have lost money. It’s important to thoroughly research the risks and potential rewards before making any investment decisions.
In summary, the amount you would get if you invest $100 in Bitcoin depends on the current price of Bitcoin and how long you plan to hold onto your investment. Bitcoin is a highly volatile asset, and there is no guarantee that its price will increase over time. As with any investment, it’s important to carefully consider the risks and potential rewards before making a decision.
What will Bitcoin be worth in 5 years?
Bitcoin’s value has been volatile and subject to rapid fluctuations since its inception in 2009. In recent years, it has experienced both significant highs and lows. It’s important to note that investing in cryptocurrencies, including Bitcoin, can be risky due to the unpredictable nature of the market.
Some experts believe that Bitcoin’s value may continue to rise in the next five years. They cite factors such as increased adoption, mainstream acceptance, and limited supply as reasons why the price could continue to appreciate. However, others warn that Bitcoin could experience significant declines or even become obsolete due to increased competition from other cryptocurrencies or regulatory hurdles.
Ultimately, the future value of Bitcoin is impossible to predict with certainty. It’s important for individuals to do their own research, assess their risk tolerance, and consult with financial professionals before making any investment decisions.
What is Bitcoin Pizza Day?
13 years ago on this day, Laszlo Hanyecz, one of the first users and adopters of Bitcoin, paid 10,000 Bitcoin units for two pizzas; Bitcoins that seven years later, in 2017, were worth about $200,000,000 ($200 million). Every year Bitcoin fans celebrate this day as “Pizza Day”.
On May 18, 2010, in the Bitcoin Talk forum, Laszlo Hanyecz, with the username “Laszlo”, creates a topic with the following title and content:
“I’ll pay 10,000 bitcoins for a couple of pizzas, like maybe 2 large ones so I have some left over for the next day. I like having left over pizza to nibble on later.
You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but I’m aiming for is getting food delivered in exchange for bitcoins where I don’t have to order or prepare it myself, kind of like ordering a ‘breakfast platter’ at a hotel or something, they just bring you something to eat and you’re happy.
I like things like onions, peppers, sausage, mushrooms, tomatoes, pepperoni, etc… just standard stuff no weird fish topping or anything like that. I also like regular cheese pizzas which may be cheaper to prepare or otherwise acquire.
If you’re interested please let me know and we can work out a deal.
When Laszlo published that post, Bitcoin price was about $0.004. Now, assuming a price of 30,000 dollars for each bitcoin, ten thousand bitcoins is equivalent to 300 million dollars. A dream that once cost only $40.
It took a few days for Laszlo to find someone willing to give two pizzas for something that has no roots or a very clear future. Finally, on May 22, 2010, Laszlo was able to buy two large pizzas by paying ten thousand bitcoins to a person nicknamed Jercos who lived in the same neighborhood. It was later revealed that Jersus’ real name was Jeremy Sturdivant.
Just a few months later in November 2010, the price of bitcoins reached $2,600. In 2011, ten thousand bitcoins cost about $18,000; But even the most optimistic Bitcoin fans didn’t think that $41 Bitcoin would be worth more than $300 million a day.
After that, Laszlo paid bitcoins several times to buy pizza and other things, and he claimed to have spent about 100,000 bitcoins in this, which are worth more than 3 billion dollars today. But this was not the end. In February 2018, Laszlo once again bought two pizzas with Lightning, this time to help expand the Bitcoin Lightning network. On February 2018, Laszlo once again bought two pizzas to help expand the Bitcoin Lightning Network.
But Jeremy Sturdivant, who made a hidden fortune by giving away two pizzas, probably regrets not waiting these days. He said in an interview that he sold them a long time ago when the price of Bitcoin reached several hundred dollars.
Every year, Bitcoin fans celebrate Pizza Day, and as people’s awareness of Bitcoin has increased over the past years, the celebration has expanded and the number of participants has grown. Bitcoiners usually make pizzas with bitcoin symbol on this day or symbolically buy pizza with bitcoins. Many consider this day as the true birthday of Bitcoin, as the day the first real, daily Bitcoin transaction took place.
What happened to the 10,000 Bitcoin pizza?
Grant Blaisdell, one of the founders and CEO of Confirm analytics company, says: “Over the years, these bitcoins have gone to multiple addresses. Some of them are in an inactive exchange and others are held in a wallet with very high value. “It appears that some of these bitcoins have been cashed out on the BTC-e exchange.” he said.
The exchange was established in 2011 and stopped working in 2017 due to accusations related to money laundering.
According to substantiated findings, 5.79% of these Bitcoins are also located in one of the largest Bitcoin addresses. About 579 bitcoins (equivalent to $5 million) are said to be in the wallet, which ranks among the 12 richest bitcoin wallets. This wallet has about 500 million dollars of bitcoins in it. “She/he is probably one of the first people who entered the field of Bitcoin” Blaisdell says.
We do not know who controls this wallet, as this address does not appear to be associated with entities such as exchanges. His secret identity is kind of interesting because it reminds us of Satoshi. The bitcoin community values pizza day and considers it one of the turning points in the history of this digital currency.
What is bitcoin dominance?
Bitcoin Dominance is an indicator that shows how much of the total market value of digital currencies is made up of Bitcoin. For example, if the dominance of Bitcoin is 40%, it means that 40% of the total value of the digital currency market is owned by Bitcoin.
The easiest way to determine the dominance of Bitcoin is to calculate the ratio of the market value of Bitcoin to the total value of digital currencies; Therefore, when Bitcoin was the only digital currency available, its dominance was 100%; But with the creation of new digital currencies, including Bitcoin forks, this domination gradually decreased.
Why does Bitcoin dominance matter?
Bitcoin also affects the projects in the world of digital currencies through the “price” factor. Price is one of the components of dominance, and for this reason, the price of Bitcoin has a direct and strong relationship with the price of other digital currencies. However, this does not mean that all currencies have such a strong influence and the price change of any currency affects other currencies. The truth is that the degree of influence is proportional to the degree of dominance.
It is interesting to know that, like other concepts in the world of digital currencies, change of dominance has its own term. Flippening is one of these terms; Changing the ownership of a digital currency is called flipping. A shift occurs when the market value of one digital currency overtakes that of another. Shifting dominance is important; Because it shows the competitive nature of the digital currency market.
In this competition each digital currency tries to overcome another. About Bitcoin and Ethereum this competition occurs in their different consensus methods. Bitcoin uses the POW consensus algorithm and Ethereum is moving towards the full implementation of the Proof of Stake algorithm.
What is Bitcoin ETF in crypto?
Exchange-traded fund (ETF) is a fund in which there are one or more assets and individuals can invest in the assets they want by buying shares of that fund.Buying and selling of ETF shares is done through the stock exchange, and its transaction is like a normal share transaction; Therefore, it is official and in accordance with the stock exchange regulations of a country.
Today, there are ETFs for very important and practical assets such as gold and oil, and they are traded every day on the stock exchanges of different countries around the world. Investors who buy ETF shares, can invest in it without going through complicated buying processes and without experiencing the risk of holding an asset.
For example, if you buy a share of a gold ETF, you are investing in gold without owning actual gold. Simply put, a Bitcoin ETF is a fund that holds a large amount of actual Bitcoin or is tied to the Bitcoin futures market (relative to the type of fund). Individuals and legal entities can trade Bitcoin ETF shares like a stock on the stock exchange. The stock price of the fund rises and falls based on the price of Bitcoin.
Bitcoin ETF shares are traded on stock exchanges instead of digital currency exchanges. It is obvious that transactions are done only during the hours when the stock exchange of a country is open. In general, there are two types of exchange-traded funds for Bitcoin:
This type of fund is fully backed by real Bitcoin; The big risk with that is that it is very difficult to hold real Bitcoins (in high volume).
This type of fund is not directly backed by Bitcoin; Rather, it uses the futures market. The full explanation of futures contracts is not included in this article; But just so you know that the real bitcoin is not stored in it, and the value of the stock goes up and down only with the price of bitcoin. Bitcoin ETFs that are going to be accepted in America are of this type.
Why buy ETF over Bitcoin?
The question that is what exactly is the advantage of a Bitcoin ETF for an investor that makes someone buy its stock instead of buying Bitcoin itself. Maybe it is better for an ordinary investor to buy his own Bitcoin; But for wealthy individuals or investment companies, buying ETF shares is a great opportunity; for the following reasons:
1. Legality of ETFs
A Bitcoin ETF is recognized by regulatory authorities. If you hold a large organization and you are worried about buying Bitcoin directly for legal reasons, you can invest in its exchange fund to be covered and supported by legislative institutions. For example, in the United States, the Securities and Exchange Commission (SEC) is directly responsible for protecting ETF investors from numerous market risks.
ETFs are also inheritable under securities laws, a rare benefit for those concerned about the fate of their bitcoins after death.
2. Ease of investment and maintenance
For someone who has worked in the stock market, entering the world of digital currencies seems complicated. To invest in Bitcoin, such a person can buy a share of the fund like a normal share in the stock market. If you are a rich person and want to buy a lot of bitcoins, you may worry about the safe keeping of bitcoins as well as the liquidity challenge. In this case, buying ETF shares instead of real bitcoins can make sense.
3. Tax discount or exemption
In most countries, ETFs include tax exemptions or rebates. For an investor who has a lot of bitcoins, dealing with the tax authorities is risky and may prefer to buy ETFs instead of real bitcoins.
In an exchange fund, in addition to Bitcoin, other assets such as company shares or gold may be invested; Therefore, a person who owns a share of an ETF can benefit from the profits of all the assets in the fund at the same time.
In fact, investing in ETFs is one of the best ways to help you implement this idea: “Don’t put all your eggs in one basket.”
A Wrapped Token is a digital asset that represents another cryptocurrency or physical asset such as gold, stocks, and real estate. It is designed to work on a different blockchain than the one it was originally issued on. Wrapped Tokens make it possible for users to access and utilize different assets across blockchain protocols without having to undergo complex technical processes.
These tokens have been created, to be able to be used on DeFi platforms. The original asset within the digital storage space is complexed or so-called ” Wrapped ” and a new token is created for exchange on other platforms.
Wrapped Tokens enable the use of non-native assets in blockchains and create a bridge or interface between networks and interoperability in the digital currency space. These tokens can represent anything; Including art and collectibles, goods, digital assets, stocks, bonds, fiat currencies and real estate.
Since Wrapped Tokens are tied to another asset, they must be managed by a custodial entity that wraps and unwraps the assets. In other words, these entities link tokens with assets or cancel them.
Wrapped Bitcoin (wBTC), was the first Wrapped Bitcoin token that was used through smart contracts in the Ethereum blockchain. Wrapped Bitcoin is not the only Wrapped token available, and there are other Wrapped tokens that mostly include ERC-20 Ethereum and BEP-20 Binance Smart China compliant assets.
Types of wrapped tokens
There are several types of Wrapped Tokens, and they generally fall under the following categories:
- BTC Wrapped Tokens. These are tokens that represent Bitcoin and are issued on other blockchain networks. Examples of BTC Wrapped Tokens include Wrapped Bitcoin (WBTC), RenBTC, tBTC, and sBTC.
- ETH Wrapped Tokens. These are tokens that represent Ethereum and are issued on other blockchain networks. Examples of ETH Wrapped Tokens include Wrapped Ether (WETH), RenETH, TBTC, and pBTC.
- Stablecoin Wrapped Tokens. These are tokens that represent various stablecoins and are issued on other blockchain networks. Examples of Stablecoin Wrapped Tokens include Wrapped USD (wUSD), Wrapped Euro (wEUR), sUSD, and sEUR.
- Other Asset Wrapped Tokens. These are tokens that represent various other digital assets and are issued on other blockchain networks. Examples of Other Asset Wrapped Tokens include Wrapped XRP (WXRP), Wrapped Zcash (WZEC), and Wrapped Litecoin (WLTC).
Overall, Wrapped Tokens provide users with increased accessibility and flexibility when interacting with different blockchain protocols and assets.
What does hard cap mean in bitcoin?
One of the distinguishing features of Bitcoin is its hard cap, which refers to the limit on the total number of bitcoins that can ever be created. The hard cap for Bitcoin is set at 21 million, and once this number is reached, no new bitcoins will ever be generated. This fixed supply of bitcoins is one of the main benefits of the cryptocurrency.
Bitcoin Hard cap advantages
The Bitcoin hard cap refers to the maximum limit of 21 million Bitcoins that can ever be in circulation. This limit was set by the creator of Bitcoin, Satoshi Nakamoto, to prevent inflation and preserve the value of the cryptocurrency. The hard cap has numerous benefits for Bitcoin and its users.
- Firstly, the hard cap helps to ensure that the value of Bitcoin is preserved over time. Since there can never be more than 21 million bitcoins in circulation, there is a finite supply of the cryptocurrency. This makes it less susceptible to the effects of inflation as there cannot be an unlimited supply of the currency, like with fiat currencies. As a result, the value of Bitcoin tends to increase over time as demand for the cryptocurrency grows.
2. Secondly, the hard cap enhances the security of the network. Unlike fiat currencies, which can be printed in unlimited quantities, Bitcoin is scarce, which makes it more difficult to manipulate or counterfeit. The hard cap ensures that no one can create millions of new bitcoins, as this would require a consensus on the network, which is unlikely given the decentralized and democratic nature of the cryptocurrency.
3. Finally, the hard cap helps to prevent centralization of Bitcoin by large players in the market. Since there is a limited supply of bitcoins, large investors cannot accumulate massive amounts of the cryptocurrency over time, which would enable them to manipulate the price of the coin. This prevents the concentration of wealth and power within the cryptocurrency ecosystem and ensures that all users have an equal opportunity to participate in the network.
What does HODL mean?
The term “HODL” originated from a typo made by a Bitcoin forum user in 2013, who meant to write “hold”. It has since become a popular term in the crypto community and stands for “hold on for dear life”.
Hodling refers to the act of holding onto cryptocurrency instead of selling it during price dips or market corrections. It is often seen as a long-term investment strategy, where investors believe that the price of their crypto assets will increase over time, and are willing to wait it out through short-term fluctuations.
Hodling can be a risky strategy, as it’s not guaranteed that the price will go up, and investors can potentially miss out on opportunities to sell high and buy low. However, some investors find it to be a more stable and less stressful approach to the volatile world of cryptocurrency trading.
What is Bitcoin core? Is Bitcoin Core the same as Bitcoin?
Bitcoin Core is a software project that aims to provide the Bitcoin network with a full node implementation. Full node means that the software downloads a copy of the entire blockchain database and keeps it up-to-date with the latest transactions and blocks being added to the network.
The Bitcoin Core software is maintained by a volunteer community of developers and is available for anyone to download and use. It supports a variety of features such as multi-signature transactions, payment batching, and transaction fee estimation.
Bitcoin Core is often considered the reference implementation of the Bitcoin protocol, and many other projects and wallets are built on top of its code. It is an open-source project that is continuously being improved and updated. So while bitcoin core is not technically the same thing as bitcoin, it is an important part of the bitcoin ecosystem
In summary, Bitcoin Core is a crucial piece of software that helps maintain the integrity and security of the Bitcoin network.
What is a Bitcoin Faucet?
Is there any way to get free bitcoins from? This is a question that maybe every newcomer in digital cryptocurrency world and even experienced people ask themselves. But yes; Using Faucet, you can get free bitcoins or digital currency.
Note: Don’t forget that most of today’s Faucet are scams and also the amount you get from them is insignificant that it’s kind of just a waste of your time.
Faucet (Faucet) in the field of digital currencies are websites that, if you visit them, you can receive some bitcoins or other digital currencies every few seconds or minutes. Of course, the minimum amount of withdrawal from these websites is very high and the amount of digital currency received is very small. For this reason, in most cases, you can’t get any feedback from them; in fact, Faucet websites make real profit by getting a lot of traffic.
Faucet in English means a dripping water tap, which can be taken from the meaning of “trickle income”. Bitcoin Faucet or any other digital currency are a type of reward systems that pay visitors small fractions of Bitcoin (or other digital currencies). These rewards are released to users at certain time intervals. In other words, Faucet do not provide the possibility of immediate withdrawal for their users.
These rewards are intended to attract visitors to Faucet’s website and usually these they also contain a lot of advertisements. Advertising companies pay the owner of Faucet to show these ads. The costs of these ads will be calculated on a pay-per-thousand-impression (CPM) basis.
What is a satoshi? How much Bitcoin is 1 Satoshi?
A Satoshi is the smallest unit recorded on the Bitcoin blockchain: one Satoshi is equal to: 0.00000001 Bitcoins.
Bitcoin forks, namely Bitcoin Cash and Bitcoin SV, also have this small unit. Satoshi Nakamoto, the anonymous creator of Bitcoin, thought of smaller units so that his invention could be used as money.
How to recover bitcoin(s)?
- Lost, damaged or stolen mobile phone or laptop
- Forget wallet details
- Bitcoin wallet damage
- Sending bitcoins to a wrong address
- Computer virus and address change
Use the wallet seed
Use private keys
What is Lightning Network? how does Lightning Network work?
Lightning Network is a layer-2 payment protocol built on top of a blockchain network, such as Bitcoin or Litecoin. It aims to improve the scalability and speed of decentralized transactions by enabling instant, low-cost payments between parties without requiring every transaction to be recorded on the blockchain.
The Bitcoin blockchain processes an average of 7 transactions per second, and the time required for the final confirmation of each transaction varies from 10 minutes to several hours. After all, the transaction fees on the Bitcoin blockchain are so high that they are unaffordable for small payments.
Instead, Lightning Network facilitates transactions through a network of payment channels established between parties, where only the opening and closing transactions are recorded on the blockchain. This allows for a large number of transactions to occur off-chain, significantly reducing transaction fees and confirmation times.
- The transaction fee in the Lightning network is very small and close to zero.
For Lightning Network payments, it is not always necessary to establish a direct channel between two parties. For example, you and your friend may have a channel between you. If your friend wants to buy from a store with which you have a channel, your friend can buy from that store without creating a new channel.
How to use Lightning Network?
As said above, the Lightning Network is a second layer technology that allows for faster and cheaper bitcoin transactions by creating a secure off-chain network for micropayments. Here are the steps to use Lightning Network:
- First, you need to set up a Bitcoin wallet that supports the Lightning Network. There are many wallets available, and some popular ones include Electrum, Bluewallet, and Zap.
- Once you have set up your wallet, you need to fund it with some bitcoin. You can do this by transferring bitcoin from your regular bitcoin wallet to your Lightning Network wallet.
- Next, you need to find a Lightning Network node to connect to. You can do this using a Lightning Network explorer like 1ML or lnmainnet.gaben.win. Look for a node with good connectivity, low fees and high capacity.
- After connecting to a node, you can start sending and receiving bitcoin through Lightning Network channels. To send a payment, you need to open a payment channel with the recipient, and then use the Lightning Network wallet to send the payment. The payment will be confirmed almost instantly, and the fees will be much lower than on-chain Bitcoin transactions.
- To receive payments, you need to share your Lightning Network node’s public key with the sender. The sender can then open a channel with your node and send the payment. The payment will be instantly confirmed, and the funds will be immediately available in your Lightning Network wallet.
Overall, using the Lightning Network can significantly improve the speed and cost of Bitcoin transactions, making it a popular choice for micropayments and small-value transactions.
What SegWit means for Bitcoin?
SegWit, which is short for Segregated Witness, is actually a Bitcoin improvement project that was implemented in order to solve two major problems. The purpose of this soft fork is primarily to provide conditions to protect the flexibility (Malleability) of transactions and in the next step to increase the block capacity (Block Capacity) in the Bitcoin blockchain network.
Currently SegWit was proposed and implemented on the Bitcoin blockchain in August 2017 by the most popular Bitcoin reference client, the Bitcoin Core development team.
How does SegWit work?
SegWit aims to improve the efficiency and capacity of the Bitcoin network by separating the transaction signature data from the transaction data, allowing more transactions to be included in each block. SegWit also introduced a new address format that starts with “bc1”, which is more efficient and allows for easier integration with other technologies such as the Lightning Network.
Overall, SegWit has helped to reduce transaction fees and processing times on the Bitcoin network, making it more accessible and user-friendly for everyday transactions. It has also paved the way for further upgrades and innovations in the future.
How does bitcoin transactions work?
Bitcoin transactions work by sending and receiving digital currency between two parties through a decentralized network.
When a user initiates a transaction, they create a message that includes the recipient’s Bitcoin address, the amount of Bitcoin being sent, and a digital signature that proves the transaction was authorized by the owner of the Bitcoin.
This message is then broadcast to the network of nodes, which are computers running the Bitcoin software. The nodes verify the transaction by checking that the sender has enough Bitcoin to cover the transaction and that the digital signature is valid. Once the transaction is verified, it is added to a block of transactions that is then added to the blockchain a public ledger of all Bitcoin transactions.
Miners then compete to solve a complex mathematical problem to add the block to the blockchain. The first miner to solve the problem is rewarded with newly created Bitcoins and transaction fees from the block. Once the block is added to the blockchain, the transaction is considered complete, and the recipient can access their Bitcoin in their digital wallet.
which countries officially use bitcoin?
Regulations regarding Bitcoin can change rapidly; However, as of August 2021, some countries that have officially legalized or accepted the use of Bitcoin include the United States, Canada, Australia, Japan, and the European Union. Other countries have varying degrees of regulation and acceptance of Bitcoin. It is important to research the specific laws and regulations in your country before using Bitcoin.
How is El Salvador doing with Bitcoin?
In June 2021, El Salvador became the first country in the world to adopt Bitcoin as legal tender, meaning that it can be used to pay for goods and services and is recognized as a form of currency alongside the US dollar. The government has also launched a digital wallet app called Chivo, which allows citizens to store and transact with Bitcoin.
However, this move has been met with some criticism and concerns about the volatility and security of Bitcoin as a currency. It is important to research and understand the implications of using Bitcoin in El Salvador before investing or transacting with it.
What is play to earn crypto games?
Play-to-earn is a new concept in the world of gaming that allows players to earn cryptocurrency by playing games. Bitcoin play-to-earn games are games that offer players the opportunity to earn Bitcoin as a reward for completing tasks or achieving certain milestones in the game.
These games are becoming increasingly popular, and there are now several Bitcoin play-to-earn games available on various platforms. However, it is important to note that these games can be risky, and players should do their research and exercise caution before investing time and money into them. Additionally, the value of Bitcoin is highly volatile and can fluctuate rapidly, so any earnings from play-to-earn games should be carefully monitored and managed.
What are the best bitcoin reward games and websites?
Each crypto game offers a unique way for players to earn different rewards for performing in-game activities. This reward can be in the form of digital currency, a non-fungible token (NFT), or an increase in the value of the player’s NFT.
P2E (play 2 earn) games are very popular due to their ability to generate income and are currently the hottest topic in the cryptocurrency world. You can sell these game tokens to others or use them to upgrade your game.
(Axie Infinity) and (NBA Top Shot) are popular games with the purpose of earning money that have managed to attract thousands of users. With the increasing popularity of these games, it’s no wonder that so many people are turning to them; But you should not forget that starting these games is not without cost and all of them require initial financial investment. Users need to set up a cryptocurrency wallet and buy some coins or tokens and pay transaction fees.
These unique games have native tokens that support the game economy. The player can buy and sell different items using these tokens in the game. However, some of these games such as (Upland) and (AXIE INFINITY) require an initial investment to start, while some games such as (Decentraland) and (Thetan Arena) can be played for free.
(CryptoKitties) is a unique token-based blockchain game where you can collect digital cat NFT cards or breed these colorful cats yourself. (Cryptokitties) was launched in 2017. (CryptoKitties) is the first game on the Ethereum blockchain and is one of the first attempts to use blockchain technology to experience play-to-earn games. The game encourages users to exchange in-game assets for fiat money and thus earn money.
What are the difference between fiat and digital currency?
Fiat currency is a physical form of currency that is issued and controlled by a government or central authority. Examples of fiat currency include the US dollar, Euro, and Japanese yen. These currencies are backed by the government and are widely accepted as a means of payment for goods and services. On the other hand, digital currency is a type of currency that is created and managed using computer algorithms and cryptography.
Digital currencies are not backed by any government or central authority, and their value is determined by market demand and supply. Examples of digital currencies include Bitcoin, Ethereum, and Litecoin.
One key difference between fiat and digital currency is their physical form. Fiat currency exists in physical form, such as banknotes and coins, while digital currency exists purely in electronic form.
Another difference is the level of control over the currency. Fiat currency is controlled by governments and central authorities, while digital currencies are decentralized and operate independently from any central authority. Finally, the value of fiat currency is generally more stable than digital currency, which can experience significant price fluctuations due to market demand and supply.
How does cryptocurrency affect fiat money?
The rise of digital currency has significant implications for fiat currency. One potential impact is that the increased popularity of digital currencies could lead to a decrease in demand for fiat currency. This could be due to the fact that digital currencies offer advantages such as faster transaction times, lower fees, and greater privacy.
Another potential impact is that digital currencies could challenge the dominance of fiat currencies as the primary means of payment for goods and services.
As more merchants begin accepting digital currencies as payment, consumers may begin to shift away from using fiat currency altogether. However, it is important to note that fiat currency still holds a significant role in the global economy, and it is unlikely that it will be completely replaced by digital currencies anytime soon. Governments and central authorities also have the ability to regulate and control the use of digital currencies, which could limit their impact on fiat currency.
What’s the meaning of DeFi?
Decentralized finance, or DeFi, is a rapidly growing sector of the cryptocurrency industry that aims to create a more open and accessible financial system. DeFi applications are built on top of blockchain networks, allowing for peer-to-peer transactions without the need for intermediaries such as banks or financial institutions.
DeFi offers a range of financial services, including lending, borrowing, trading, and investing. These services are typically provided through decentralized applications (dApps), which are built on blockchain networks such as Ethereum. DeFi dApps use smart contracts to automate transactions and enforce the rules of the system.
One of the key advantages of DeFi is its accessibility. Anyone with an internet connection can access DeFi services, regardless of their location or financial status. This makes DeFi particularly appealing to individuals who may be excluded from traditional financial systems, such as those in developing countries or those with limited access to banking services.
Another advantage of DeFi is its transparency. All transactions on a blockchain network are recorded on a public ledger, which means that anyone can view them. This creates a high degree of transparency and accountability, which can help to reduce fraud and corruption.
However, there are also some challenges associated with DeFi. One of the main challenges is the potential for smart contract bugs or vulnerabilities, which could lead to the loss of funds. Additionally, regulatory uncertainty remains a major issue for the DeFi industry, as many governments have yet to establish clear guidelines for DeFi activities.
Despite these challenges, the DeFi industry continues to grow at a rapid pace, with new projects and applications launching regularly. As the industry matures and becomes more established, it has the potential to transform the financial industry and create a more open and accessible financial system for all.
What is decentralized finance example?
An example of decentralized finance is a lending platform built on top of a blockchain network, such as MakerDAO. Users can deposit cryptocurrency as collateral and borrow stablecoins, which are pegged to the value of a fiat currency. The lending process is automated through smart contracts, which enforce the terms of the loan and ensure that collateral is sufficient to cover the borrowed funds. This allows individuals to access loans without the need for a traditional bank or financial institution.
Is Bitcoin a DeFi?
No, Bitcoin is not a DeFi. Bitcoin is a cryptocurrency that operates on a decentralized network, but it does not offer the same financial services and applications as decentralized finance platforms. DeFi refers to a specific subset of blockchain-based financial applications that aim to provide traditional financial services in a decentralized manner.
What is the meaning of NFT in crypto?
Non-Fungible Tokens (NFTs) are a type of digital asset that is stored on a blockchain, which is a decentralized and transparent ledger. NFTs are unique and cannot be exchanged for one another because each NFT has its own specific value. They are often used by artists, musicians, and creators as a way to monetize their work and provide proof of ownership.
NFTs can represent any type of digital content such as art, music, videos, and even tweets. They are often used by artists to sell digital art pieces, musicians to sell digital albums or songs, and creators to sell digital products or services. NFTs are created using smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. Smart contracts allow for the automatic transfer of ownership and payment upon completion of certain conditions. One of the main benefits of NFTs is that they provide proof of ownership for digital assets.
This is important because digital content can be easily copied and shared, making it difficult to determine who the original creator is. NFTs solve this problem by providing a unique identifier that proves ownership and authenticity. Another benefit of NFTs is that they allow creators to monetize their work in new ways.
For example, artists can sell digital art pieces as NFTs, allowing them to earn money from their creations in a way that was not possible before. Overall, NFTs are an exciting new development in the world of digital assets. They provide a way for creators to monetize their work and provide proof of ownership, while also leveraging the power of blockchain technology to ensure transparency and security.
What is an example of a NFT?
An example of an NFT is the digital artwork “Everydays: The First 5000 Days” by artist Beeple, which sold for $69 million at a Christie’s auction in March 2021. The artwork is a collection of 5,000 individual digital images created by Beeple over a period of 13 years, and it is stored as an NFT on the Ethereum blockchain. The NFT provides proof of ownership and authenticity for the artwork, and it allows the buyer to display the artwork in virtual galleries or sell it to other collectors.
Is NFT better than Bitcoin?
NFT and Bitcoin are different types of digital assets and cannot be compared as being better or worse than each other. Bitcoin is a cryptocurrency that is used as a medium of exchange, while NFTs are unique digital assets that can represent various forms of ownership, such as artwork, music, or collectibles. Both have their own benefits and drawbacks, and their value is determined by market demand and supply.
What is Liquidity Pool in crypto?
A liquidity pool in crypto refers to a pool of tokens that are locked into a smart contract on a decentralized exchange (DEX). These pools are used to facilitate trading by providing liquidity for buyers and sellers. Liquidity providers (LPs) add their tokens to the pool and receive a share of the trading fees generated by the DEX. The price of the tokens in the pool is determined by an algorithm that balances the supply and demand of each token.
Liquidity pools have become increasingly popular in the DeFi space as they allow for decentralized trading without relying on centralized exchanges. They also provide a way for investors to earn passive income through staking their tokens in the pool. However, liquidity providers should be aware of the risks involved, such as impermanent loss, which occurs when the price of one token in the pool changes relative to another.
How do crypto liquidity pools make money?
Crypto liquidity pools make money by charging trading fees on transactions that occur on the decentralized exchange (DEX). These fees are typically a percentage of the transaction value and are paid by both the buyer and the seller. The fees generated by the DEX are then distributed among the liquidity providers (LPs) who have contributed to the pool.
LPs receive a portion of the fees based on their share of the total liquidity in the pool. This means that LPs can earn passive income by staking their tokens in the pool and providing liquidity to the market. The amount of money that can be earned from liquidity pools varies depending on factors such as the trading volume, the size of the pool, and the fees charged by the DEX.
What is an example of a liquidity pool?
One example of a liquidity pool is Uniswap, which is a decentralized exchange built on the Ethereum blockchain. Uniswap allows users to trade ERC-20 tokens without the need for a centralized intermediary. The liquidity pools on Uniswap are created by users who deposit an equal value of two different tokens into the pool. These tokens are then used to facilitate trades on the platform, and LPs earn a portion of the trading fees generated by the DEX.
What are the risks of liquidity staking?
1. Impermanent loss: Liquidity providers (LPs) may face the risk of impermanent loss, which occurs when the price of one token in the pool changes relative to the other token. This can result in LPs losing value compared to holding the tokens separately.
2. Smart contract risk: Liquidity staking involves interacting with smart contracts, which are subject to bugs and vulnerabilities that could result in financial losses for LPs.
3. Market risk: The value of the tokens in a liquidity pool can be affected by market conditions, such as volatility and liquidity. LPs may experience losses if the market conditions change unfavorably.
4. Liquidity risk: LPs may face the risk of not being able to withdraw their tokens from the pool due to insufficient liquidity or high gas fees.
5. Platform risk: The platform hosting the liquidity pool may experience technical issues, hacks, or other security breaches that could impact LPs’ funds.
The price of Bitcoin since 2009; Overview of important historical events
Reviewing the Bitcoin price since the beginning when this digital currency entered the exchanges (2010) can provide a good perspective for long-term investment. We will review the changes in Bitcoin price since the beginning of trading in exchanges (2010 until now), as well as important historical events and events that have influenced the price of Bitcoin over the years.
January 2009: The first Bitcoin block is mined, and the first Bitcoin transaction takes place
In 2009, Bitcoin started its journey at the price of $0 and remained at this price until 2010, when Bitcoin entered to the first exchange. During this time, Bitcoin was in the stage of introduction and development and was basically worthless. So although Bitcoin price changes may be considered since 2009; To be more precise, Bitcoin did not enter any exchange before 2010 and there is no correct price history for it in this year.
• July 2010: The first Bitcoin exchange, Mt. Gox, is established
On July 18, 2010, Jed McCaleb, a programmer who became famous for developing the peer-to-peer network eDonkey in 2000, announced that the Mt. Gox exchange was launched for full-time Bitcoin trading. He later launched Stellar.
On March 6, 2011, McCaleb sold the exchange to Mark Karpelès in Japan, and within three years, the exchange accounted for most of Bitcoin’s trading volume.
• February 2011: Bitcoin reaches parity with the US dollar for the first time
Two years have passed since the birth of Bitcoin, and this digital currency is priced on the basis of dollars for the first time in the Mt. Gox exchange. The spread of the word “Bitcoin” in popular media was a turning point for Bitcoin and increased its popularity.
June 2011: Mt. Gox is hacked, resulting in the theft of thousands of Bitcoins.
By obtaining the user information of one of Mt. Gox’s official accountants, a hacker was able to obtain an old version of the customer database, including their email addresses and hashed passwords. Having network admin access, he started generating countless requests to sell bitcoins that didn’t actually exist.
This caused a decrease in prices and Bitcoin fell to $0.01. The Mt. Gox exchange reversed the fraudulent transactions and suspended trading for seven days to restore the system and its security. Two other major exchanges also stopped their transactions for a limited time to review their security.
It wasn’t long before a copy of the stolen database was leaked and used to attack the accounts of MyBitcoin wallet users who had the same password as Mt. Gox. In this attack, 4,019 bitcoins were stolen from 600 accounts.
November 2013: Bitcoin reaches an all-time high of $1,242.
As many predicted, after a great fall, Bitcoin started to rise again between November 2013 and January 2014. During these 4 months, with the influx of a large number of investors and the attention of the media, the price of Bitcoin reached an unimaginable number.
At the end of 2013, the value of Bitcoin reached about 1200 dollars($1,242). This price caused all previous bad memories to be forgotten from the minds of investors and Bitcoin owners. But Bitcoin again took the path of price correction and dropped to $150 later in January 2015.
February 2014: Mt. Gox files for bankruptcy, and it is revealed that they had lost over 850,000 Bitcoins.
After withdrawals were halted on the Mt. Gox exchange on February 6 and it was announced that hackers had been able to attack the exchange and its trading engine by using a harmful server flexibility, other Bitcoin exchanges and businesses issued a joint statement condemning the mismanagement by the managers of this Japanese exchange.
After disclosure of these attacks, it was found that 850,000 bitcoins were lost. This was the most influential event in the price of Bitcoin since 2009 and caused the market to stagnate for about two years.
December 2017: Bitcoin reaches an all-time high of nearly $20,000.
In 2017, Bitcoin experienced a significant increase in value, reaching an all-time high of nearly $20,000 in December of that year. This was largely attributed to increased mainstream adoption and media attention, as well as the introduction of Bitcoin futures trading on major exchanges. However, the price also experienced significant volatility throughout the year, with several major dips and recoveries.
December 2018: Bitcoin reaches a low of around $3,200.
2018 was a year of trial and error for Bitcoin. At the beginning of this year, Bitcoin was trading at $13,368. By January 7, it experienced an unexpected growth to $16,455.99, which was the highest price Bitcoin could reach in 2018.
Bitcoin was trading at the price of $11,547 at the beginning of March; But the declining pattern continued and its price fluctuated between 5000 and 6000 dollars for several months. Although everyone expected Bitcoin to revive itself; But this did not happen and the situation got worse and worse until the end of the year. At the end of 2018, Bitcoin was trading at $4,000.
May 2021: Bitcoin reaches a new all-time high of over $64,000.
This was largely due to increased institutional adoption, with companies like Tesla and Square investing in Bitcoin, as well as more mainstream acceptance of cryptocurrencies as a legitimate asset class. However, the price has also experienced significant volatility in recent months, with a sharp drop in value in May and June 2021.
This was attributed to concerns over environmental impact and regulatory crackdowns in China. Despite this, many investors remain bullish on the long-term prospects of Bitcoin and other cryptocurrencies.
Bitcoin price in 2022 and 2023
Many analysts and experts believe that the price of Bitcoin will continue to rise in the coming years. Some predict that it could reach $100,000 or even $500,000 by 2023. However, there are also concerns about potential regulatory actions and market volatility that could impact the price. Ultimately, the future of Bitcoin and other cryptocurrencies remains uncertain and subject to a variety of factors.
Overall, the price of Bitcoin has been volatile throughout its history, with significant fluctuations in value due to various factors such as market demand, regulatory changes, and hacking incidents.
Popular Bitcoin slang terms
Slang terms are very common in the world of digital currencies. If you read a text related to digital currencies for the first, you may come across phrases and terms that you do not understand the meaning of. It is enough to visit digital currency forums or social networks of their supporters. In these pages, you will encounter a lot of unfamiliar terms, which may not be easy to guess their meaning from the text.
Of course, this is not limited to social networks, and such phrases can be seen even in news and articles published in official news agencies. here are some popular Bitcoin slang terms:
- HODL: A term used to encourage holding Bitcoin for the long-term despite market fluctuations. Hodl is actually the same (hold) that one of the Bitcoin users, mistyped the two letters l and d while writing it because he was drunk.
- FOMO: “Fear of Missing Out” – refers to the feeling of anxiety that a person feels when they see others making money from an investment they didn’t make.
- Moon: Refers to the price of Bitcoin rising to extraordinary heights.
- Rekt: A term used to describe someone who has experienced significant financial losses due to a bad investment in Bitcoin or other cryptocurrencies.
- Whale: A term used to describe individuals or entities that hold large amounts of Bitcoin.
- Bagholder: A person who holds onto Bitcoin despite a significant drop in price, resulting in significant losses.
- Altcoin: Any cryptocurrency other than Bitcoin.
- Pump and Dump: A scheme where a group of individuals promote a specific cryptocurrency to drive up the price before selling off their own holdings at a profit.
- Mining: The process of verifying transactions on the blockchain and adding them to the network’s ledger, typically done using specialized computer hardware.
- FUD: FUD stands for “Fear, Uncertainty, and Doubt.” It is a tactic used to spread negative and false information to create panic and sell-offs within the cryptocurrency market.
- Shill: A shill is someone who promotes or advertises a particular cryptocurrency or project, usually for their personal gain.
- Sats: “Sats” is short for Satoshis, which is the smallest unit of Bitcoin. It is named after the pseudonymous creator of Bitcoin, Satoshi Nakamoto. One Satoshi equals 0.00000001 BTC.
How to give Bitcoin as a gift?
Giving bitcoin as a gift can be done in several ways. Here are some options:
- Physical bitcoin: You can buy a physical bitcoin or a coin that represents bitcoin and give it as a gift. These coins usually have a private key hidden behind a tamper-evident seal, which can be redeemed for the actual bitcoin.
- Gift card: You can buy a bitcoin gift card from a reputable exchange or platform and give it to the recipient. They can then redeem the card for bitcoin.
- Wallet transfer: If you have a bitcoin wallet, you can transfer some bitcoin to the recipient’s wallet address. This is the most direct way to give bitcoin as a gift, but it requires the recipient to have a bitcoin wallet.
- Bitcoin voucher: Some exchanges or platforms offer bitcoin vouchers that can be redeemed for bitcoin. You can buy a voucher and give it to the recipient, who can then redeem it for bitcoin.
- When giving bitcoin as a gift, make sure to educate the recipient about the basics of bitcoin and how to store it securely
What is a Bitcoin node?
A bitcoin node is a computer that runs the bitcoin software and helps to maintain the bitcoin network by validating transactions and blocks. Nodes communicate with each other to ensure that all transactions are valid and to prevent double-spending.
They also store a copy of the blockchain, which is a public ledger of all bitcoin transactions. Running a node helps to decentralize the network and increase its security and reliability. However, it requires a significant amount of computing power and storage space, so most users do not run their own nodes but instead rely on third-party services.
What is a meme coin?
In 1979, English biologist Richard Dawkins coined the term “Meme” for the first time in his book “The Selfish Gene”. He needed a word that conveys the concept of “spreading idea and culture”. Dawkins first came up with the Greek word “Mimeme” meaning “imitation”. But he was looking for a shorter word that rhymes with the English word Gene; Finally, he came up with the word meme.
In today’s Internet culture, memes refer to funny images, videos, and texts that users copy from each other on social networks and publish with slight changes. Their purpose in publishing these images is to convey their meaning with a joking tone and humorous interpretations. In other words, a meme is an online visual joke.
Meme coins are a type of cryptocurrency that is inspired by internet memes. They are created as a joke or as a parody of other cryptocurrencies, and their value is often based on the popularity of the meme they represent. The most famous meme coin is Dogecoin, which was created in 2013 as a joke by two software engineers. It is based on the Shiba Inu dog meme and has gained a cult following over the years.
Meme coins have become increasingly popular in recent years, with many new ones being created every day. Some of the most popular ones include Shiba Inu, Baby Doge, and SafeMoon. They are often used as a way to make quick profits, as their prices can fluctuate wildly based on social media hype and market speculation.
How do meme coins work?
Unlike traditional cryptocurrencies like Bitcoin and Ethereum, meme coins are not designed to be used as a means of payment or as a store of value. They are purely speculative assets that are traded on cryptocurrency exchanges. This means that their value can be highly volatile and unpredictable, and investors should be prepared to lose their entire investment.
Meme coins are often associated with the term “pump and dump,” which refers to a scheme where investors artificially inflate the price of a coin through social media hype and then sell off their holdings for a profit. This can lead to massive losses for those who bought in at the peak of the hype.
Despite their reputation as a speculative asset, meme coins have gained a loyal following among younger investors who see them as a way to participate in the cryptocurrency market without having to invest large sums of money. They have also been embraced by celebrities and influencers who use their social media platforms to promote them.
In conclusion, meme coins are a type of cryptocurrency that is based on internet memes and is highly speculative in nature. While they can offer the potential for quick profits, they are also associated with high risks and should only be considered by experienced investors who are willing to take on the volatility of the market.
What are airdrops in crypto?
Airdrops are a marketing strategy used by cryptocurrency companies to distribute free tokens or coins to their users. This is done in order to raise awareness about the company and its project, as well as to reward existing users and attract new ones.
Airdrops can be conducted in various ways, but they typically involve users performing certain actions in order to receive the free tokens. These actions can include following the company on social media, joining their Telegram group, or completing a survey.
Airdrops can be targeted towards specific groups of users, such as those who hold a certain amount of a particular cryptocurrency or those who have completed a certain number of transactions on a particular platform.
Airdrops can also be used to incentivize users to hold onto their tokens for a certain period of time. For example, a company may offer an airdrop of additional tokens to users who hold onto their tokens for a year or more.
While airdrops can be a great way for users to receive free tokens and for companies to generate buzz around their project, they can also be risky. Some airdrops may be scams designed to steal users’ personal information or cryptocurrency holdings. Users should always do their due diligence and research the company offering the airdrop before participating.
Additionally, receiving free tokens through an airdrop can have tax implications, as the tokens may be considered income by some tax authorities. Users should consult with a tax professional to understand their obligations.
In conclusion, airdrops are a marketing strategy used by cryptocurrency companies to distribute free tokens to users. They can be a great way for users to receive free tokens and for companies to generate buzz around their project, but they can also be risky and have tax implications. Users should always do their due diligence and research the company offering the airdrop before participating.
What is fundamental of Bitcoin trading?
Fundamental analysis in bitcoin trading involves analyzing the underlying factors that affect the value of bitcoin. This includes examining the supply and demand dynamics, market trends, adoption rates, regulatory developments, and technological advancements. Traders who use fundamental analysis may look at metrics such as hash rate, transaction volume, and network activity to gauge the health of the bitcoin network.
They may also analyze news and events that could impact the price of bitcoin, such as government regulations or major partnerships with companies. The goal of fundamental analysis is to gain a better understanding of the long-term value of bitcoin and make informed trading decisions based on that analysis.
Does Bitcoin have strong fundamentals?
Bitcoin’s fundamentals are a topic of much debate among experts in the field. Some argue that its decentralized nature, finite supply, and increasing adoption make it a promising long-term investment. Others argue that its volatility, lack of regulatory oversight, and scalability issues make it a risky investment.
Ultimately, the strength of bitcoin’s fundamentals will depend on a variety of factors, including its continued acceptance by businesses and consumers, the implementation of new technologies to address scalability, and the development of regulatory frameworks to provide greater stability and security for investors.
Bitcoin white paper in Mac computers
According to Cointelegraph, on April 5, blogger Andy Baio revealed that every copy of Apple operating system MacOS included a PDF of Satoshi Nakamoto’s Bitcoin whitepaper for the past five years. It should be noted that Baio discovered this by accident. He mentioned that while trying to repair his printer, he came across a PDF version of Satoshi Nakamoto’s Bitcoin White Paper.
However, Apple denied the rumor and has now removed the document from the latest version of the Mac operating system.
“This pretty much confirms our original theory that both the Bitcoin whitepaper and the internal tool were never meant to be found by regular users” 9to5Mac, A daily apple news website said.
Why is the Bitcoin whitepaper hidden in the Mac OS?
No one knew why this document should be in the MacOS. Some thought it was “just a joke between Apple engineers”. According to AppleInsider, there were also rumors that Apple co-founder Steve Jobs was Satoshi Nakamoto.
Baio further mentioned that this file is called simpledoc.pdf and its size is only 184 kilobytes. It is even possible that the purpose of placing it was only to test another topic and the existence of the Bitcoin white paper on the Mac operating system has no specific purpose.
What Is bitcoin technical analysis?
Bitcoin technical analysis is a method used to evaluate the price movements of bitcoin using charts, indicators, and other statistical tools. It is a popular approach used by traders and investors to identify trends and make informed decisions about buying or selling bitcoin.
The technical analysis of bitcoin is based on the idea that the market price of bitcoin reflects all available information, including market sentiment, news, and economic data.
How to do technical analysis for bitcoin?
Technical analysts use various tools to analyze the price movements of bitcoin, such as moving averages, trend lines, and chart patterns. there are some tools introduced in the following.
Moving averages (MA)
Moving averages are one of the most commonly used tools in bitcoin technical analysis. They are used to smooth out the price fluctuations of bitcoin and identify trends. Traders use moving averages to identify support and resistance levels, which are key levels at which the price of bitcoin is likely to reverse.
Trend lines are another important tool used in bitcoin technical analysis. Trend lines are drawn on a chart to connect the highs or lows of the price movements of bitcoin. They are used to identify the direction of the trend and determine potential entry and exit points for trades.
Chart patterns are also used in bitcoin technical analysis to identify potential trading opportunities. Chart patterns such as head and shoulders, triangles, and double tops can provide valuable insights into the future price movements of bitcoin.
In addition to these tools, technical analysts also use indicators such as Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Bollinger Bands to analyze the price movements of bitcoin. These indicators are used to identify overbought or oversold conditions in the market and help traders make informed decisions about when to buy or sell bitcoin.
Bitcoin technical analysis is not foolproof and does not guarantee accurate predictions of future price movements. However, it can provide valuable insights into market trends and help traders make informed decisions about buying or selling bitcoin. It is important for traders to use multiple tools and indicators in their analysis and to consider other factors such as market sentiment and news when making trading decisions.
Best Bitcoin news and exchange websites
Most of the data and information you can think of is available in digital currencies. One of the main pillars for long-term success in investments is to reach a level of knowledge where we can research and evaluate ourselves and make decisions based on our own personal opinion.
Cryptocurrencies are emerging compared to other markets and assets which use blockchain technology. The requirement of success in this field is to raise basic knowledge, which acts as an obstacle for many.
The positive point is that, there are reliable digital currency websites and sources that provide us with useful information and make it easy to research and review. we introduce you to the top 10 sites for researching digital currencies and the exchanges as well. Here are five of the best news websites for Bitcoin:
1. coindesk.com; BTC news website
Coindesk is one of the most well-known and respected sources of Bitcoin news, offering daily news and analysis on all things Bitcoin. Coindesk focuses on the world of cryptocurrencies and digital assets. The website provides up-to-date news, analysis, price charts, and other information related to the cryptocurrency industry. It also hosts various events and conferences related to cryptocurrencies.
2. Cointelegraph.com; BTC news website
Cointelegraph is another well-known and respected news source on Bitcoin and other cryptocurrencies, providing daily news and analysis on the latest developments in the industry. Cointelegraph specializes in reporting on blockchain and cryptocurrency news, analysis, and price movements.
It provides up-to-date news and analysis related to Bitcoin, Ethereum, Ripple, Blockchain, and other digital assets. The website is a popular source of information for anyone interested in the latest news about cryptocurrencies and blockchain technology.
3. Coingecko.com; BTC source website
Coingecko is a website that provides cryptocurrency market analysis, rankings, and pricing data on various cryptocurrencies. It was launched in 2014 and it tracks over 9,000 cryptocurrencies from over 400 exchanges. The site offers features such as coin information, historical price charts, market capitalization, trading volume, and links to various exchanges where you can buy and sell cryptocurrencies. CoinGecko also publishes articles and reports on the cryptocurrency market and industry.
4. Coinmarketcap.com; BTC platform
CoinMarketCap is a website that tracks the prices and other metrics of thousands of cryptocurrencies. It provides real-time market data on exchanges where users can buy and sell cryptocurrencies. The website ranks cryptocurrencies based on their market capitalization, which is calculated by multiplying their current price by their circulating supply. CoinMarketCap is one of the most widely used and well-known cryptocurrency price tracking websites in the world.
5. CoinBundle.com; BTC platform
CoinBundle is a cryptocurrency investment platform that allows users to purchase bundles of different cryptocurrencies, diversifying their portfolios and reducing the risks associated with holding a single cryptocurrency. CoinBundle offers a range of bundles that include various cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, Ripple, and many others. This platform simplifies the process of buying and selling different cryptocurrencies, making it easier for beginners to invest in the cryptocurrency market.
These websites provide up-to-date and accurate news about the cryptocurrency world, including information on bitcoin.