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All You Need to Know About Bitcoins

Updated on January 2, 2018
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Digital currency is continuously growing in popularity. This article helps to explain what Bitcoins are and how they may be used to purchase items and services. Links to outside websites with additional information will be provided for further reading.

What are Bitcoins?

Bitcoins (BTC) are a form of digital currency that were first introduced in 2009. They are obtained in quite an interesting manner, other than being accepted as a form of payment. Bitcoins are obtained (become available) by a process known as mining in which computer processing power is used to crack or otherwise solve various algorithms. There are "blocks" of these encrypted algorithms that must be solved in order for the Bitcoins to be disbursed to the individuals that helped to solve a particular block. As stated on Bitcoin.org, "Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part."

Although there is a determined number of Bitcoins that are available to the market, not all Bitcoins have been mined.

Bitcoins can be used to purchase items and services the same way that other currencies can be used. Individuals can also trade their Bitcoins for real cash on various websites known as exchanges. As a merchant, you can accept them on your website as a form of payment. You can then either trade or sell them for cash or use them to purchase goods from places that accept Bitcoins. Transactions are currently less expensive than they are for typical credit card payments so you get more for your money. Offering digital currencies as a payment option may even help to bring in new customers.


How Much Is a Bitcoin Worth?

The value of Bitcoins has changed drastically since its inception in 2009. Begining at just pennies a piece, the BTC has risen as high as $1200 during its peak. Although there have been a lot of changes in the worth of Bitcoins, they have begun to have a somewhat stable worth.

To check the current worth of a Bitcoin you can visit the website:

bitcoinwisdom.com

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How Do I Use Bitcoins?


Bitcoins can used as a currency for items and services that are sold by merchants that accept them.

Individuals or merchants that have Bitcoins have them contained in what is known as a Bitcoin wallet. This is a virtual or digital wallet that stores the amount of Bitcoins that you own. When you purchase something from a website you will be given an address. This address is a random string of numbers and letters. You use your Bitcoin wallet to send your payment to this address.

Using your Bitcoins to purchase things can be just as easy as purchasing things with a credit card. Merchants that accept this type of currency have processors that, as the name implies, will process your Bitcoin payments.

Merchants can use services such as ShiftCoins to accept payments in Bitcoins and Litecoins and exchange them for US dollars.


Where Can I Use Bitcoins?


Bitcoins can be used to purchase things from online vendors that accept this type of currency. As digital currency becomes more and more popular, a lot more merchants are beginning to accept this form of payment.

Bitcoins can also be sold for cash, or purchased with cash from online exchanges. It works in a similar way to stock exchanges in that the price for a Bitcoin varies and can go up in worth or down. If you purchase them at a low price, you may be able to sell them later for a higher price. Likewise, you may lose money of the value of Bitcoins declines. Many people have made money from selling their Bitcoins as they rose tremendously in worth. However, the value of Bitcoins has since dropped from its peak.

Poll: Would You Use Bitcoins or Other Digital Currency to Purchase Items and Services?

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Bitcoin ATM located in Vancouver, British Columbia
Bitcoin ATM located in Vancouver, British Columbia | Source

Interesting Facts About Bitcoins


  • There will only ever be 21,000,000 Bitcoins available (12,000,000 are presently out/have been mined)
  • The last Bitcoin is expected to be mined in 2140
  • A new Bitcoin is mined, on average, every 10 minutes
  • The reward given for mining Bitcoins is halved every four years (this means it will take twice as long to mine the same amount as you were previously able to)
  • The creator of Bitcoin is currently anonymous
  • An article posted in November 2013 says that the "global Bitcoin computing power is 256 times faster than the top 500 super computers combined."
  • The first ever Bitcoin ATM was placed in Vancouver, British Columbia

Bitcoin For Beginners - Learn How To Mine Bitcoin

Comments

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    • moviesreviews profile image

      Cacey Taylor 

      3 years ago from San Diego, CA

      Awesome article. You provided some great fact on bitcoin now and into the future.

    • Tolovaj profile image

      Tolovaj 

      3 years ago

      I learned few new things about bitcoins, but am still in doubt, if they are here to stay. Few months ago we got first exchange machine in our country, where you can change euros to bitcoins and vice versa, so this currency is now more known to wide audience.

    • CyberShelley profile image

      Shelley Watson 

      4 years ago

      Interesting article - more than likely the way we will go in time to come. Up, interesting and useful

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