What is Bitcoin?
Bitcoin represents two concepts: a digital and universal currency but also a secure and anonymous payment system.
Who created Bitcoin?
Satoshi Nakamoto launched bitcoin as an open source software and released a manifesto with all the characteristics of Bitcoin (and Blockchain) in January 2009. The identity of Nakamoto remains unknown; he is the minor of the first block of Bitcoin, the “block of genesis”.
Who controls Bitcoin?
Bitcoin is a decentralized cryptocurrency. So, and it’s pretty amazing, nobody controls the BTC. No one, no business or no government. The BTC is managed by the community of its users. And this is the basis of all its specificity.
- Freedom of payment: you can exchange bitcoins anytime and anywhere in the world. No holidays, no borders, no forms. Full control of his currency.
- No transaction fees, unlike Paypal, Western Union or any other money transfer service.
- More security. Transactions are secure, anonymous, irreversible and therefore do not contain any personal or sensitive information. It is impossible to defraud and “hack” the payment system, unlike bank cards, for example.
- Transparent and neutral. No hidden fees, all transactions are recorded and therefore searchable, no institution receives commissions on transactions.
- Community. Bitcoin is seen as an alternative method to the domination of banks and states.
What are the disadvantages?
Mistrust. Not everyone is willing to accept bitcoin as a payment system. The list of institutions that accepts it is growing but remains limited, no network effect yet. Rumors are circulating that big names like Amazon may soon accept it as a means of payment. This is already the case for Expedia, Shopify, Microsoft and Paypal.
Volatility. The value of bitcoin is hyper volatile. Bitcoin was worth less than 30 euros in 2013 and, in October 2017, it is worth more than 4,800 euros. We do not know if bitcoin will still exist in 5 years and we do not know how much it can go up. Also, relatively minor geopolitical events can affect its value. China issued a temporary “ban” on Bitcoin in September 2017, which caused it to drop by 15% in a few days. However, stability should increase as the technology matures.
Development. We are still in beta versions of programs that govern Bitcoin. It is not yet fully democratized and many people in the world do not understand how it works.
Use. Transactions are more or less anonymous. It is thus a means of payment used for the purchase of weapons, drugs and pornographic videos. Because of this, Bitcoin sometimes has a bad reputation.
What are the use cases of Bitcoin?
Bitcoin wants to establish itself as a means of payment to the world, in the manner of coins, notes or bank cards. However, Bitcoin as a means of payment is far from universal and few institutions accept it. There are, however, some companies and some stores (mainly in Japan) that agree to sell goods for Bitcoins.
Is it anonymous?
Bitcoin is not completely anonymous, contrary to what we believe (we can always follow the path of IP addresses). It is thought to be anonymous for three main reasons:
First, unlike bank accounts and other payment systems, Bitcoin addresses are not tied to user identities. That is, anyone can create a new Bitcoin address (and associate it with a private key) at any time, without having to give anyone personal information.
Then, the transactions are not related to the identities of the users either. So (as long as a minor includes the transaction in a block), anyone can transfer bitcoins from any address to any address, without having to reveal any personal information (about sender or recipient).
Finally, Bitcoin transaction data is transmitted by nodes over the peer-to-peer network. Bitcoin nodes are well connected to one another using IP addresses. However, we do not know the role of each node.
Is it secure?
There is a lot of money that has been traded for Bitcoins. Thus, there is a real need for security. Bitcoin uses cryptography to ensure secure payments. That’s why the Bitcoin is called a “crypto” currency. Never has any bitcoin been hacked.
Why do we say it’s “the currency of terrorists”?
As far as Bitcoin is accessible by all, promises relative anonymity and allows for quick transactions, many have seen an advantage in using it as a means of payment.
In particular, it is widely used on darknet marketplaces, where pseudonymous members exchange weapons, drugs and all kinds of illegal products.
Many terrorist movements use these marketplaces to the extent that they constitute a unique place to obtain these products. Thus, even if this has never been proven, it is very likely that terrorists bought weapons (or other illicit products) using bitcoins.
What is the value of Bitcoin?
For real-time quotes from Bitcoin, we invite you to follow its news at coinmarketcap.com; Also you can find below a curve of the evolution of the exchange BTC / USD since the creation of Bitcoin:
At the time of writing, a BTC is worth $ 8,582.
How to have Bitcoins?
- You can accept it as a means of payment for a good or a service
- You can buy it on exchange platforms like Coinbase
- You can buy one of your relatives who owns it (nothing prevents you from setting your own exchange rate, you can even give bitcoins)
- You can also “undermine” it with your computer (requires a powerful computer system)
How to buy and sell Bitcoins?
To send Bitcoins from one wallet to another, you must first authorize the transaction. As in real life, you authorize the transaction with a signature. For Bitcoin, this signature is a form of password that is called a private key.
Option 1 – Bitcoin Platforms
- Just follow these steps to be able to buy bitcoins on an exchange
- Choose the exchange of your choice
- Create an account
- Add a payment method
- Buy Bitcoin
- Option 2 – ATM
- Just follow these steps to be able to buy bitcoins with an ATM
- Choose a Bitcoin distributor
- Add your portfolio information
- Check your identity
There are two main ways to proceed when you want to exchange bitcoins. You can decide to buy and keep your bitcoins (for long-term investments) or you can choose to frequently buy and sell (for short-term investments). Because of the risk involved, investing in Bitcoin should be practiced by experienced people and you should only invest money that you can afford to lose. Here is a list of popular exchanges to exchange Bitcoins: CoinBase, Bittrex, Bitfinex, GDAX, Bitstamp, Kraken, Gemini, Poloniex, LakeBTC and BTCC.
How to secure your Bitcoins?
There are several easy ways to store your bitcoins. If you are a beginner, we recommend that you start with free and easy-to-use wallet software … or you can buy a real “wallet”.
- Hardware Wallets
- Software Wallets
- Online Wallets
- Paper Wallets
- Hardware Wallets are easy to use and also very secure. They also offer data recovery capabilities. However, they are not free.
- Software Wallets are free and easy to use. They also offer data recovery capabilities. However, they offer less security than Hardware Wallets, as they are easier to hack.
- Online Wallets (also known as Web Wallets) are free and easy to use. However, they offer less security than Hardware Wallets. They offer security equivalent to that of Software Wallets.
- This type of wallets were rather popular at the time. However, they have made many mistakes in the past. We include them in this list for completeness, but we do not recommend them.
Where to buy Bitcoins in France?
In France, thanks to your French bank account, you have access to most trading platforms that allow you to buy and sell BTC.
Is Bitcoin legal?
It depends on the country in which you are. If you are in Japan, it will soon be a means of formal payment. India is also thinking about its formalization. However, China has decided to ban it temporarily, the time to find a system of regulations. Countries like Estonia or Vanuatu have accepted it perfectly. In most countries, it is still a gray area, with no “ban” or official authorization. At the time of writing, Bitcoin is legal in France.
What is mining?
Cryptocurrency mining includes two main functions: adding transactions to the blockchain by verifying and securing them, but also producing new money.
Individual blocks added by minors must contain what is called a “proof-of-work” (or PoW) protocol.
The mining activity requires a computer and a special program, which allows miners to compete with other miners to solve complicated mathematical problems. This requires a lot of computing resources. On regular intervals, the miners try to solve a block using cryptographic hash functions. What is it ? As Wikipedia tells us, it is a hash function that associates an image of fixed size with an arbitrary size datum, and whose essential property is that it is practically impossible to invert, that is, that is, if the image of a data item by the function is calculated very efficiently, the inverse calculation of an input data having an image as a value is practically impossible. For this reason, it is said of such a function that it is one-way.
The hash value is a numeric value of a specified size that identifies the data. Minors use their computers to solve a block as quickly as possible. Whoever solves the first becomes the miner of the block and therefore receives a reward. The rewards for bitcoin blocks decrease over time.
Previously, only cryptography fans were miners. However, cryptocurrencies became popular and appreciated. Thus, the mining activity can quickly become a lucrative activity. Thus, many people and companies have started to invest in mining workshops and powerful equipment to be competent. Individuals have created “mining pools” where they join forces to cope with huge corporate resources. A complete mining kit consists of a set of graphics cards, a processor, a power generator, memory, cables and fans. On Amazon, there are mining kits whose price varies between 2000 and 3500 euros. If you’re interested in mining, you can look at the Avalon6, AntMiner S7 and AntMiner S9 kits. There are mainly two companies that dominate the mining market: Bitmain (based in Beijing) and Canaan.