Bitcoin Basics: “What is a Bitcoin?” — Beginner Bitcoin

For new people entering the cryptocurrency world, there can be a lot of confusion with terms. Many beginners mistakenly equate Bitcoin with the technology underlying it ( blockchain) or cryptocurrency in general.

While Bitcoin definitely dominates the news-cycle compared to other cryptocurrencies, and so that confusion is understandable, there are a multitude of things that make Bitcoin unique. Here are just a few:

If you’re not first, your last

Bitcoin was the first implementation of a digital currency on the blockchain that we know of. And for that reason alone, it stands out as unique, boasting the longest history and therefore is the household name for most cryptocurrency enthusiasts. It also boasts of the largest market capitalization and some of the largest trading volume on most cryptocurrency exchanges.

This site (Beginner-Bitcoin) utilizes the name Bitcoin, even considering our excitement around other blockchain products and cryptocurrencies. Bitcoin remains at the top as far as brand-recognition goes.

Is it money?

The debate for years in the financial world centered around one thing: is BTC an actual currency? And while some questions remain, and it is far from clear where the future of Bitcoin and Cryptocurrency is headed, this particular debate, at the very least, appears to have been settled.

Money is a “means of exchange”. Bitcoin certainly is that, if not more. You can think of bitcoin like “digital cash for a digital age”. Crypto-users have wallets to store their Bitcoin, they have investment accounts, trading accounts, have Bitcoin backed debit cards, and even buy pizza with it.

How does Bitcoin actually work?

This is a tough question. While Bitcoin operates as a currency, in reality, it is actually a network of computers that operate together as a decentralized, peer to peer system.

As transactions are made using Bitcoin, the computers work together to reach “consensus” to verify the authenticity of the transaction (This process uses what’s called a “distributed ledger”). This makes Bitcoin a highly secure form of money, as fraudulent transactions simply will not be able to be verified as authentic.

How can Bitcoin be used?

Bitcoin can be used in the same way that any money can be used, with one large caveat; it needs to be recognized and accepted as a form of payment by the various parties in a financial transaction.

To put it in perspective, an Indian Rupee is form of currency (money) however it is not accepted to be used in the United States. This means in order for someone holding INR (Indian Rupees), they need to first convert their currency into US Dollars.

Bitcoin operates similarly. It is a money that is increasingly being accepted as a form of payment, but requires retailers and shoppers to be willing to transact with it.

Where do people get it?

Bitcoin used to be available in a limited number of places, a few of which are notable for infamous hacks and less that reputable clientele. Nowadays, most casual investors begin using Coinbase or eToro as they are both well known entities that are working hard to bring Cryptocurrency in the mainstream.

More “advanced” users access BTC by using mobile wallets, or decentralized finance exchanges, or even Bitcoin ATMs (they exist) but we have found Coinbase to be the starting place for a majority of BTC holders in the United States. For those with Coinbase accounts, you need to see our “hack” eBook on how to get free cryptocurrency as you begin your journey into the world of crypto.

Originally published at https://beginner-bitcoin.com on December 29, 2021.

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