Before you can make money from Bitcoin you have to understand how it works. In this two-part article we will explain as simply as possible what exactly bitcoin is, how it works and how you can make money from it. Enjoy the first part of the article.
Bitcoin is a digital currency that is created and held electronically. Unlike traditional currencies like the dollar or Ghana cedis, it exists outside the control of any central bank or laws. Bitcoins can be used to buy merchandise anonymously. Some people just buy Bitcoins as an investment hoping that they’ll go up in value. You don’t have to buy a whole Bitcoin since its digital and can be divided into smaller parts. The smallest divisible amount is one hundred millionth of a Bitcoin and is called a ‘Satoshi’, named after the founder of Bitcoin, who is anonymous but known by an alias Satoshi Samoto.
Bitcoin soon to reach GH¢70,000 per coin
These Bitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer and are created through a process known as mining. It is called Bitcoin mining because it resembles the mining of other commodities. Miners process and secure the network using specialised hardware that “mine” for new Bitcoins. “Bitcoin mining” is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid.
The Bitcoin is known for its anonymity; however Bitcoin stores details of every single transaction that ever happened in the network in what is called the blockchain. If you have a publicly used Bitcoin address, anyone can tell how many Bitcoins are stored at that address. They just won’t know that it’s yours.
Unfortunately due to its anonymity, people can buy and sell drugs and other illegal items with significantly less risk of being tracked by authorities.
If somebody hacks into your wallet where you store your Bitcoins you lose them for good. The best way to store your Bitcoins is on a disk that is disconnected from the internet.
While Africa has not yet witnessed the high level of Bitcoin adoption that the United States and Europe have seen, there are several start-ups and individuals in Africa that are building an African Bitcoin ecosystem. In East Africa, BitPesa was established in 2013 to offer instant, low-cost international transfers and payments using Bitcoin as a means of settlement.
With more countries legalising the use of the Bitcoin, how soon do you think it will be till Ghana legalises it?
The Bitcoin craze has been a topic of much speculation for the better part of 2017 and is eating its way into 2018. Even though it is spoken about quite often there are still many people who are not quite sure how exactly the crypto-currency works. This article, explaining what Bitcoin is and how it functions, was submitted by Xenia Atidigah.