What is Bitcoin?
By now, you’ve likely heard peripherally about Bitcoin. The news you may have come across would range from good to bad, talking about its profitability, its risks, and perhaps some about Bitcoin itself. But what is it? At its core, Bitcoin is a decentralized (meaning uncontrolled by any specific entity; private or government) ledger system called a blockchain. The blockchain keeps track of how many Bitcoins are in the system, where they’re located, and the transactions of all the Bitcoins throughout the network.
Often times you’ll hear the term ‘mining’ associated with Bitcoin and in a simplified manner, this is just a way of describing the upkeep of the ledger. Bitcoin’s are created in the system when someone dedicates computing power to work on verifying the ledger, or mining a new block on the blockchain. By verifying the ledger, or mining it, people are rewarded based on the amount of computing power they contributed. The blockchain represents the entire history of Bitcoin transactions from its inception and newly created blocks (millions of current Bitcoin transactions) must be attached through verifying the contents of the block before it’s attached to the blockchain itself.
Woah! That’s a bit confusing, right? Trust me, you can spend a little time on Google and enlighten yourself a lot more, but for now we’ll try to keep it simple. Bitcoin is a currency system, where each Bitcoin represents a real world monetary value. At the time of this writing 1 Bitcoin is worth about $450. So 0.1 Bitcoin is worth $45, 0.001 Bitcoin is worth $4.50, and 0.00517898 Bitcoin is worth $2.39. Type in ‘BTC Value‘ in Google to get an easy estimate on how much BitCoin is worth at a given time.
So, you may be asking, how can this be worth anything? Its value lies in its decentralized nature, no banks or government agencies control Bitcoin, owners of Bitcoin control Bitcoin. What that means is, much like gold as a currency, what you own in Bitcoin you own. Because of the blockchain there is no question of how much Bitcoin you own, and because of miners ensuring the validity of each newly created block, every transaction is nearly instantaneous when you send Bitcoin from your Bitcoin Wallet to another Bitcoin Wallet.
Since I’m asking all the questions for you, I’ll ask another; but doesn’t my credit card or bank instantly transfer funds when I use my debit/credit card? The answer is, no. Check your statement at any time after you make a purchase and you’ll see the funds are in a ‘pending’ state. This state can exist for a few days before the transaction ‘officially’ goes through, where as with Bitcoin the transaction will take at most a half hour. This is ideal for Online Casinos, Sports Betting, or other wagers because you don’t have to wait days for your funds to go through or get back to you, it only takes minutes!
In part two of this series, I’ll be talking about the Bitcoin Wallet, how it stores funds securely, how to transfer funds and how you can use BitCoin to open a world of online gaming sites to keep you entertained for hours!