Bitcoin Education for a Newbie: Getting Started with the Basics
Bitcoin is a topic that no one is unheard of these days. No matter who you are and what you do, you must have heard of bitcoins or cryptocurrency Exchange. A lot of news is out there about bitcoin. However, before you proceed to believe all the news and start investing, let’s get a detailed idea about blockchain technology along with bitcoin.
Overview of Cryptocurrency- Points To Note
Cryptos are the digital currency that was first conceptualized in 2008 when the great recession was going on. The idea of cryptocurrencies took place with the first of its kind, the bitcoin.
The significance of the name cryptocurrency is that it is made of two words – currency and cryptography. Both make – cryptocurrency. The currency’s network, the blockchain, uses the cryptographic method.
Use of Cryptocurrency
Cryptocurrencies can be used for various purposes. You can make payments for multiple things. You can pay someone for something. Or just send your friend some crypto for some financial help. Buying products and services are also possible these days with it.
What Is Bitcoin? A Brief Overview
Bitcoin is the first digital currency or the first cryptocurrency. You can imagine it as digital cash. Just the way we use our fiat currency digitally, we can use cryptos digitally too. However, the only difference is that fiat currencies do have a physical form that the digital currency is devoid of.
Bitcoin is a decentralized process which means there is no central power or authority that can take control of the cryptos. It functions on its own completely. On the other hand, you can find a bit of a centralized factor, but that is in the exchanges.
Overview of Bitcoin Exchange Platforms
Well, bitcoin exchanges are an important part of the entire bitcoin system. It is the platform where people can buy and sell bitcoins. Also, if you are more into an investment than trading, exchanges are the solution for you. There are types of exchanges, though.
Types of Bitcoin Exchange Platforms
Based on authority, there are two types of exchanges- centralized and decentralized. Centralized exchanges have a third-party control which is why it is named such. However, these exchanges are better with security though. For example, the Bitcoin Code trading appwas developed to keep up with the trading trends, thus simplifying the trading journey of individuals. It is a platform that provides great and secure transactions along with good returns. And decentralized exchanges are those that are run by any software. As no one else is taking responsibility, the exchange is quite less secure than the centralized ones.
Apart from this division, there are other two types as well. one is the exchange that accepts both cryptos and fiat currency for selling some other crypto or bitcoin. If you are a beginner and do not have any crypto assets, this bitcoin exchange is perfect for you. on the other hand, the other type of exchange only accepts cryptos in exchange for cryptos. Therefore, as a first-timer, you will not be able to avail that.
Overview of Bitcoin Wallets
The concept of a bitcoin wallet is not very hard to understand. A currency must need a place or space to be in it does not matter whether it is a digital currency or physical currency. The cryptocurrencies require digital wallets, which mainly safeguard the assets, keeping them safe.
There are mainly two types of wallets such as hot and cold wallets. The hot wallets are more useful for transactional purposes as they have a direct connection with the internet. Therefore, using them, you can trade anytime. There are three types, though – exchange wallet, mobile wallet, and desktop wallet.
On the other hand, cold wallets are very efficient in saving the cryptos most securely. It is possible because the cold wallets are designed in a way that does not require to have an internet connection. When we talk about hot wallets, they usually require internet connectivity. Also, connecting it will reduce the security aspect.
At the end of the day, insufficient knowledge can lead novice investors to financial loss. That is why we decided to educate the newbies who do not have a proper idea about bitcoin. On the other hand, knowing the factors may even interest you in some investments as well.