{"id":32155,"date":"2022-12-13T11:28:38","date_gmt":"2022-12-13T10:28:38","guid":{"rendered":"https:\/\/coinfomania.com\/?p=32155"},"modified":"2024-04-24T06:02:47","modified_gmt":"2024-04-24T05:02:47","slug":"what-is-bitcoin","status":"publish","type":"post","link":"https:\/\/coinfomania.com\/what-is-bitcoin\/","title":{"rendered":"What is Bitcoin? A Simple Stupid Guide for Beginners"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Bitcoin is a fully decentralized <a href=\"https:\/\/bitcoin.org\/\" target=\"_blank\" rel=\"noopener\">peer-to-peer electronic cash<\/a> system that allows users to exchange value without intermediaries. <\/span><span style=\"font-weight: 400;\">It is the first <a href=\"https:\/\/coinfomania.com\/the-global-cryptocurrency-market-cap-hits-2-trillion-for-the-first-time-in-30-days\/\">globally adopted cryptocurrency network<\/a> that records and verifies transactions through a public ledger known as Blockchain.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These days, if you are active in the world of investments, it is impossible to go days or even weeks without hearing about Bitcoin or cryptocurrency in general. If you don&#8217;t hear it from folks around you, you can&#8217;t escape from seeing it on social media, television, or from your favorite celebrities and politicians.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The truth is, Bitcoin is a lot of things, and in this article, you will <strong>understand what Bitcoin is<\/strong> and the mechanism behind the cryptocurrency.\u00a0\u00a0<\/span><\/p>\n<p>In this <strong>comprehensive Bitcoin guide<\/strong>, we introduce you to the leading cryptocurrency and cover the following sub-topics:<\/p>\n<ul>\n<li><a href=\"#bitcoin\">What is Bitcoin?<\/a>\n<ul>\n<li><a href=\"#blockchain\">What is Blockchain?<\/a><\/li>\n<li><a href=\"#creator\">Who Created Bitcoin?<\/a><\/li>\n<li><a href=\"#satoshi\">Who is Satoshi Nakamoto?<\/a><\/li>\n<li><a href=\"#know\">What We Know About Satoshi Nakamoto<\/a><\/li>\n<li><a href=\"#dont\">What We Don&#8217;t Know About Satoshi Nakamoto<\/a><\/li>\n<\/ul>\n<\/li>\n<li><a href=\"#real\">What Does a Real Bitcoin Look Like?<\/a><\/li>\n<li><a href=\"#backing\">What is Backing Bitcoin?<\/a><\/li>\n<li><a href=\"#mining\">How Does Bitcoin Mining Work?<\/a><\/li>\n<li><a href=\"#ethereum\">Difference Between Bitcoin and Ethereum<\/a><\/li>\n<li><a href=\"#advantage\">Advantages of Bitcoin<\/a><\/li>\n<li><a href=\"#disadvantage\">Disadvantages of Bitcoin<\/a><\/li>\n<li><a href=\"#investment\">Is Bitcoin a Good Investment?<\/a><\/li>\n<li><a href=\"#regulation\">Bitcoin Regulation Around the World<\/a><\/li>\n<li><a href=\"#buyingbitcoin\">How to Buy Bitcoin for the First Time<\/a><\/li>\n<li><a href=\"#wallets\">The Best Bitcoin Wallets<\/a><\/li>\n<li><a href=\"#faq\">Frequently Asked Questions About Bitcoin<\/a><\/li>\n<li><a href=\"#conclusion\">Conclusion<\/a><\/li>\n<\/ul>\n<h2 id=\"bitcoin\">What is Bitcoin?<\/h2>\n<p><span style=\"font-weight: 400;\">Bitcoin is the first ever cryptocurrency that operates without a central authority, such as governments or banks. It is an open-source technology that cannot be controlled or owned by anyone.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bitcoin is an innovative payment system and a new evolution of money. It was first introduced in 2008 as an electronic cash and can be transferred quickly between users worldwide.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is fast, secure, and reliable, with remarkably low transaction fees compared to traditional financial systems. Network nodes process and verify transactions<\/span><span style=\"font-weight: 400;\">\u00a0through cryptography, and the records are kept in a publicly distributed ledger called the blockchain.\u00a0<\/span><\/p>\n<h3 id=\"blockchain\">What is Blockchain?<\/h3>\n<p><span style=\"font-weight: 400;\">Blockchain is a digital ledger that records information in a way that makes it impossible for anyone to alter. In other words, once data is stored on the blockchain, nobody can manipulate or change it.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Blockchain is generally made up of a single chain of separate blocks of information arranged in sequence. This simply means that blockchains are designed to record and store information, including personal documents, contracts, or even transactions between people and organizations.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thanks to innovation, blockchain has since evolved into a separate concept, and many blockchains have been created using the same cryptography algorithm as the original Bitcoin Blockchain.\u00a0 Many people misunderstand this concept and sometimes refer to every blockchain as the one built on Bitcoin protocol instead of it as a technology.\u00a0<\/span><\/p>\n<p>Also as blockchain technology has grown, so has the desire to learn and develop within the ecosystem across almost all industries. We&#8217;ve seen an explosion of courses developed specifically to teach blockchain, including accredited degree programs and <a href=\"https:\/\/online.maryville.edu\/online-certificates\/blockchain\/\" target=\"_blank\" rel=\"noopener\">certificates in blockchain technology<\/a>. As more students choose this educational path, we&#8217;ll no doubt see exponential growth in its use and adoption.<\/p>\n<h3 id=\"creator\">Who created Bitcoin?<\/h3>\n<p>Bitcoin was<span style=\"font-weight: 400;\"> created by a person or group of persons with the pseudonym Satoshi Nakamoto back in 2008.\u00a0<\/span>However, the <span style=\"font-weight: 400;\">identity of Satoshi Nakamoto remains a mystery to date. Let&#8217;s take a closer look into some of the information we have on the creator.\u00a0<\/span><\/p>\n<h3 id=\"satoshi\">Who is Satoshi Nakamoto?<\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-12881 aligncenter\" src=\"https:\/\/coinfomania.com\/wp-content\/uploads\/Satoshi.jpeg\" alt=\"Bitcoin Satoshi Monero\" width=\"480\" height=\"320\" \/><\/p>\n<p><span style=\"font-weight: 400;\">This question is rather an interesting one as no one really knows who is behind the name Satoshi Nakamoto, the creator of Bitcoin.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite much digging by journalists and members of the crypto community, the identity of this individual or group remains a mystery.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The name &#8220;Satoshi Nakamoto&#8221; was used to submit the Bitcoin whitepaper. It had the title, &#8220;A Peer-to-Peer Electronic Cash System&#8221;\u00a0 back in 2008, later published by a cryptography mailing list.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The <\/span><a href=\"https:\/\/bitcoin.org\/en\/bitcoin-paper\"><span style=\"font-weight: 400;\">whitepaper<\/span><\/a><span style=\"font-weight: 400;\"> that first introduced Bitcoin contains a complete roadmap of how to use the peer-to-peer network. It is\u00a0 important to understand that the Bitcoin whitepaper wasn&#8217;t the first idea for digital currency based on the fields of cryptography.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On January 3, 2009, Bitcoin was launched with Satoshi Nakamoto mining the Bitcoin blockchain from <a href=\"https:\/\/coinfomania.com\/blockone-raises-10b-ahead-of-new-exchange-launch\/\">block one<\/a>, also known as the genesis block,\u00a0 which had a reward of 50 bitcoins (BTC). <\/span><span style=\"font-weight: 400;\">Satoshi continued mining until his disappearance in 2010.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Satoshi Nakamoto was responsible for developing most of the early software, such as the Bitcoin private keys and the Bitcoin protocol. He continued to modify and provide information related to the technology before he stopped all public communications.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Why did Satoshi Nakamoto leave?\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">There is no straight answer to this question. Just as no one knows Satoshi&#8217;s identity, it is difficult to say why Satoshi decided to go off the radar. <\/span><span style=\"font-weight: 400;\">However, there are some hypotheses from crypto experts that might explain this.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some crypto experts opined that Satoshi lost interest in Bitcoin and abandoned the project due to the complexity of the coding involved in the protocol. They also believed there were some flaws in the protocol that needed to be resolved.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another group of experts believes Satoshi is still actively involved with the project but with a different pseudonym. And then there are others who say Satoshi left because he thought Bitcoin wouldn&#8217;t prosper if he stayed behind.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, before Satoshi Nakamoto&#8217;s disappearance, the pseudonymous character dropped a final message warning developers that the software is not all resistant to denial-of-service (DoS) attacks.\u00a0<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">\u201cThere\u2019s more work to do on DoS, but I\u2019m doing a quick build of what I have so far in case it\u2019s needed, before venturing into more complex ideas. The build for this is version 0.3.19\u2026 Added some DoS controls. This is one improvement, but there are still more ways to attack than I can count. I\u2019m leaving the -limitfreerelay part as a switch for now and it\u2019s there if you need it.&#8221; <\/span><\/p>\n<p>As Gavin and I have said clearly before, the software is not at all resistant to DoS attacks. This is one improvement, but there are still more ways to attack than I can count. I\u2019m leaving the -limitfreerelay part as a switch for now and it\u2019s there if you need it,\u201d <span style=\"font-weight: 400;\">the message reads.\u00a0<\/span><\/p><\/blockquote>\n<h3><span style=\"font-weight: 400;\">People Claiming to be Satoshi Nakamoto<\/span><\/h3>\n<p>Although the real identity of Satoshi Nakamoto is still unknown, <span style=\"font-weight: 400;\">several people have come out to claim his fame. However, no one has been able to prove beyond reasonable doubt that they are the mysterious creator of Bitcoin.\u00a0<\/span><\/p>\n<h4><span style=\"font-weight: 400;\">Craig Steven Wright<\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Australian computer scientist Craig Steven Wright has claimed many times that<\/span><span style=\"font-weight: 400;\">\u00a0is Satoshi Nakamoto, the Bitcoin creator. <\/span><a href=\"https:\/\/coinfomania.com\/is-craig-wright-the-satoshi-nakamoto\/\"><span style=\"font-weight: 400;\">But is Craig really Satoshi Nakamoto?\u00a0<\/span><\/a><\/p>\n<p><span style=\"font-weight: 400;\">To back up his claims, Craig provided a list of 145 wallet addresses containing some of the addresses used to mine BTC during the Satoshi era of 2009.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Craig presented the list during his court battle with Ira Kleiman, the brother of the late David Kleiman, Craig&#8217;s former business associate.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The list of addresses was quickly re-sealed by Kleiman&#8217;s legal team, but CourtListener had already published it, making it public knowledge.\u00a0<\/span><span style=\"font-weight: 400;\">Some of these addresses were then used to <a href=\"https:\/\/coinfomania.com\/140-addresses-unmoved-bitcoin-signs-craig-wright\/\" target=\"_blank\" rel=\"noopener\">sign a message calling<\/a> Craig Steven Wright a liar and a fraud.\u00a0<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">&#8220;<\/span><span style=\"font-weight: 400;\">Craig Steven Wright is a liar and a fraud.<\/span><span style=\"font-weight: 400;\"> He doesn&#8217;t have the keys used to sign this message. The Lightning Network is a significant achievement. However, we need to continue to work on improving on-chain capacity. Unfortunately, the solution is not to just change a constant in the code or to allow powerful participants to force out others. We are all Satoshi.&#8221;<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Note that the<\/span> <a href=\"https:\/\/coinfomania.com\/craig-wright-kleiman-lawsuit-unfold\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">court filing<\/span><\/a><span style=\"font-weight: 400;\"> wasn&#8217;t about Craig&#8217;s claims of being Satoshi rather it was about his business dealings with his former partner David Kleiman.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Craig also registered a copyright for the Bitcoin Whitepaper in 2019. Afterwards he requested for<a href=\"https:\/\/coinfomania.com\/remove-bitcoin-whitepaper-bitcoin-org\/\"> every website that published the whitepaper to pull it down<\/a>. This caused uproar within the media community and led to more publications of the whitepaper.\u00a0\u00a0<\/span><\/p>\n<h4><span style=\"font-weight: 400;\">Dorian Nakamoto<\/span><\/h4>\n<p><span style=\"font-weight: 400;\">In March 2014,<\/span><span style=\"font-weight: 400;\"> Newsweek<\/span><span style=\"font-weight: 400;\"> identified a man known as Dorian Nakamoto as <a href=\"https:\/\/www.newsweek.com\/2014\/03\/14\/face-behind-bitcoin-247957.html\" target=\"_blank\" rel=\"noopener\">the brain behind Bitcoin<\/a>. The publication caused chaos among members of the crypto community as this was the first attempt made at discovering who the hell created Bitcoin.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The news media displayed several similarities between Satoshi Nakamoto and Dorian Nakamoto as both shared a Japanese connection. In the end Dorian stated clearly that he had no connection with Bitcoin.\u00a0<\/span><\/p>\n<h4><span style=\"font-weight: 400;\">Nick Szabo<\/span><\/h4>\n<p><span style=\"font-weight: 400;\">The third individual who might be Satoshi Nakamoto is computer engineer and scholar Nick Szabo.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Szabo came up with the concept of a smart contract in 1996 way before Bitcoin was created. Back in 2008, he launched a Bitcoin precursor called Bit Gold.\u00a0 His case for being a Bitcoin creator was made by Dominic Frisby, author of a book titled Bitcoin: The Future of Money.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to the author, Szabo shared the same writing style as Satoshi Nakamoto in the Bitcoin whitepaper. More so, both Szabo and Satoshi referenced Carl Menger, an Economist in their books.\u00a0<\/span><\/p>\n<h3>What We Know And Don&#8217;t Know About Satoshi Nakamoto<\/h3>\n<p><span style=\"font-weight: 400;\">Satoshi Nakamoto is an interesting character as no one knows his identity. <\/span><span style=\"font-weight: 400;\">Bear in mind that very little in terms of facts is known about the<\/span><span style=\"font-weight: 400;\">\u00a0Bitcoin creator and that&#8217;s because he hasn&#8217;t been identified yet.\u00a0<\/span><\/p>\n<h4 id=\"know\">What We Know About Satoshi Nakamoto<\/h4>\n<ul>\n<li>Satoshi Nakamoto might be a group<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Thirteen years ago, a person or group of persons called Satoshi Nakamoto released a paper which contained details of the Bitcoin software. Although the name is Japanese, the whitepaper was completely written in English.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the paper, Satoshi also used the words &#8220;we&#8221; and &#8220;I&#8221; at intervals to address himself which makes us believe there could be a team behind the pseudonym.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">The short public life of Satoshi Nakamoto<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">After the launch of Bitcoin in 2009. Satoshi regularly interacted with a group of developers on the<\/span> <a href=\"https:\/\/bitcointalk.org\/index.php?action=profile;u=3;sa=showPosts\"><span style=\"font-weight: 400;\">BitcoinTalk forum,<\/span><\/a><span style=\"font-weight: 400;\"> updating them on the progress of the new software.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At the time no one cared about his identity as most of the people in the group were skeptical of the new idea. Satoshi continued to exchange information on the platform before leaving for good.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">His private email conversations with Mike Hearn and Garvin Anderson were later published in April 2011 where Satoshi claimed to have moved on to other things.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Satoshi mined the first bitcoins<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">During the first year of the Bitcoin release, Satoshi Nakamoto mined about one million bitcoins. <\/span><span style=\"font-weight: 400;\">The coins are estimated to be worth about $55 billion in today&#8217;s market which is a lot of money for those behind the pseudonym.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Satoshi&#8217;s BTC stack remains unclaimed<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Interestingly, the 1,000,000 BTC belonging to acclaimed Satoshi addresses has never been claimed or moved between wallets.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the early years, members of the crypto community assumed the coins were left untouched out of fear. Some are of the opinion that Satoshi Nakamoto might have lost access to the private keys and cannot\u00a0 move the coins.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, this is just speculation as no one knows why the asset remains untouched.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Nobel Prize Nominee<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Satoshi Nakamoto was nominated in 2015 for a Nobel Prize in Economic Science by a professor of finance at UCLA, Bhagwan Chowdhry.\u00a0<\/span><\/p>\n<h4 id=\"dont\">What We Don&#8217;t Know About Satoshi Nakamoto<\/h4>\n<ul>\n<li><span style=\"font-weight: 400;\">Satoshi Nakamoto biography<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Apart from the fact that he created Bitcoin, there is no public record of Satoshi&#8217;s biography anywhere on the internet.\u00a0 In a digital era where it&#8217;s difficult to conceal information, Nakamoto&#8217;s mystery has remained unsolved.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He was too careful not to reveal anything related to his personal life. All the information he shared was about Bitcoin and its code.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">He could be dead<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">There is speculation that one of the reasons Satoshi Nakamoto is still unable to be identified is probably because he&#8217;s dead.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One theory was\u00a0 that Hal Finney, a computer scientist who received the first bitcoin transactions on 12 January 2009 was really Satoshi Nakamoto. If this is true, then the identity of Satoshi may never be uncovered as <a href=\"https:\/\/coinfomania.com\/late-hal-finney-predicted-10-million-per-btc\/\" target=\"_blank\" rel=\"noopener\">Finney passed away<\/a> in August 2014.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Satoshi Nakamoto could be a group of companies<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Some crypto community members have suggested that Satoshi Nakamoto may not be a person. Instead, some groups of companies such as Samsung, Toshiba, Nakamichi, and Motorola formed an alliance and crafted the name from their brand names.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Satoshi Nakamoto may be the NSA<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">There are claims that Bitcoin was invented by the NSA or CIA\u00a0 and that Satoshi Nakamoto is an acronym for a group of secret service cryptocurrency experts.\u00a0<\/span><span style=\"font-weight: 400;\">According to the claims, Bitcoin is a privatized asset of an American intelligence agency designed to provide quick funding to United States intelligence activities across the globe.\u00a0<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Will Satoshi Nakamoto ever reveal himself?<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Well, no one knows if Satoshi Nakamoto will ever reveal his personal identity as numerous attempts to uncover this truth have proven elusive.\u00a0<\/span><\/p>\n<h2 id=\"real\">What does a real bitcoin look like?<\/h2>\n<p><span style=\"font-weight: 400;\">In the wake of growing interest in Bitcoin, many people have been asking questions about the appearance of a real bitcoin. <\/span><span style=\"font-weight: 400;\">However, the cryptocurrency doesn&#8217;t have a physical attribute except for the computers used for mining (verifying and processing transactions on the network).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In other words, bitcoin is a digital currency that does not have a physical form. You may have seen many images depicting what Bitcoin looks like, but none is correct.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bitcoin is a computer code that looks like 1s and 0s on a computer screen because it does not exist outside the Internet. Just look at it as a file stored on your computer, but in this case, the file is stored in your Bitcoin wallet rather than a computer.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A wallet address refers to an alphanumeric string of characters such as lowercase a to z, uppercase A to Z and the numbers 0 to 9. You can learn <a href=\"https:\/\/coinfomania.com\/how-to-get-a-bitcoin-address\/\" target=\"_blank\" rel=\"noopener\">how to get a Bitcoin address<\/a> here.<\/span><\/p>\n<figure id=\"attachment_32174\" aria-describedby=\"caption-attachment-32174\" style=\"width: 498px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-32174\" src=\"https:\/\/coinfomania.com\/wp-content\/uploads\/Bitcoin-Address-Example.png\" alt=\"Example of Bitcoin address\" width=\"498\" height=\"230\" \/><figcaption id=\"caption-attachment-32174\" class=\"wp-caption-text\">(Example of a Bitcoin address)<\/figcaption><\/figure>\n<h2 id=\"backing\">What is backing Bitcoin?<\/h2>\n<p><span style=\"font-weight: 400;\">As you may already know, Bitcoin is an open-source system and does not need the backing of centralized authorities, such as the government, nor does it require intermediaries like banks to propagate its use.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Simply put, Bitcoin is backed by anyone who interacts with the protocol, ranging from developers to miners and end users who send and receive coins on the network. <\/span><span style=\"font-weight: 400;\">The value of BTC is determined by demand, supply, usability, acceptance and its technological value and not by any assets like gold or silver.\u00a0<\/span><\/p>\n<h2 id=\"mining\"><span style=\"font-weight: 400;\">How does Bitcoin mining work?\u00a0<\/span><\/h2>\n<figure id=\"attachment_17520\" aria-describedby=\"caption-attachment-17520\" style=\"width: 475px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-17520\" src=\"https:\/\/coinfomania.com\/wp-content\/uploads\/Bitcoin-mining-operations.jpeg\" alt=\"Bitcoin mining operations\" width=\"475\" height=\"317\" \/><figcaption id=\"caption-attachment-17520\" class=\"wp-caption-text\">Bitcoin Mining Machines<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">Bitcoin mining refers to the process of verifying and recording new transactions on the Bitcoin public ledger. Mining requires the use of\u00a0 extremely high processing machines including Graphics Processing Units (GPUs) and Application-specific Integrated Circuits (ASICs) to solve complex computational puzzles called hashes.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Bitcoin protocol uses a <a href=\"https:\/\/academy.binance.com\/en\/articles\/proof-of-work-explained\" target=\"_blank\" rel=\"noopener\">Proof-of-Work (PoW)<\/a> consensus to enable miners to create new blocks. <\/span><span style=\"font-weight: 400;\">In addition to adding blocks and verifying transactions, mining also creates new bitcoins as a reward for the miners, which adds to those already existing.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Technically anyone can set up powerful miners to participate in the Bitcoin mining process. Sadly mining has become saturated and competition is on the high side.\u00a0 Miners have now resolved to purchase even more powerful machines that consume less electricity to profit from mining.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bitcoin has\u00a0 a limited supply of 21 million, which is the total number of bitcoins that will ever exist. This makes the cryptocurrency the most desirable coin among investors.\u00a0 So far, about 90.5% of the total supply has been mined, and the last BTC will be mined around <\/span><span style=\"font-weight: 400;\">the year 2140.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Currently, miners receive up to 6.25 BTC as a reward for completing each block. Anyone who solves the puzzle first gets the reward. Although this amount decreases by half at four years intervals due to a process called <a href=\"https:\/\/coinfomania.com\/365-days-from-bitcoin-halving-what-to-expect\/\">Bitcoin halving<\/a>. The halving occurs after each set of 210,000 blocks is mined.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">By reducing the number of rewards, fewer bitcoins are created. The <a href=\"https:\/\/coinfomania.com\/bitcoin-halving-done-block-629999-coinbase-message\/\">last halving took place in May 2020<\/a>, which means the next one will happen in 2024, and miners will start to receive <\/span><span style=\"font-weight: 400;\">3.125 BTC per block.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Miners also receive rewards for each transaction fee paid within the network. These rewards are sent directly to their wallets that have been set in place. It takes the blockchain roughly 10 minutes to process and record transactions once the math problem has been solved.\u00a0<\/span><\/p>\n<h2 id=\"ethereum\"><span style=\"font-weight: 400;\">Difference between Bitcoin and Ethereum\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">When people talk about cryptocurrency, at least one person who is new to crypto must ask about the differences between Bitcoin and Ethereum.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Due to the random mentions of cryptocurrency on television and everywhere else in the mass media, the phrase &#8220;Bitcoin and Ethereum&#8221; has been drilled into our collective consciousness.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bitcoin and Ethereum are unarguably the most influential cryptocurrencies, both by market cap and adoption. They have greatly contributed to the growth of the crypto industry.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To many, Bitcoin and Ethereum are examples of cryptocurrencies that use blockchain technology and encryption to run their operations.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although both cryptocurrencies share some similarities, there are differences in their designs and functionalities so much that sometimes it might seem as though they are two completely different technologies.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bitcoin was originally designed as a payment gateway and a store of value. Simply put, Bitcoin is built as a database of accounts or wallets for monetary transactions, which allows nodes or messages to be attached to each transaction.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ethereum, on the other hand, was created by a group of developers, including Vitalik Buterin, as a smart contract ecosystem that facilitates the development of <\/span><span style=\"font-weight: 400;\">decentralized applications (dApps). This simply means that developers can build crypto projects on the Ethereum network. Other New Age networks like <a href=\"https:\/\/coinfomania.com\/what-is-solana-sol\/\" target=\"_blank\" rel=\"noopener\">Solana<\/a> and <a href=\"https:\/\/coinfomania.com\/what-is-polygon-matic\/\" target=\"_blank\" rel=\"noopener\">Polygon<\/a> also offer similar functionalities to Ethereum, albeit with significant improvements to speed and transaction costs.\u00a0<\/span><\/p>\n<p>With that said, Ether (ETH) is the native cryptocurrency of Ethereum. It is used to process transactions and interact with applications<span style=\"font-weight: 400;\"> built on the network.\u00a0<\/span><\/p>\n<p><strong>Read More:<\/strong> <a href=\"https:\/\/coinfomania.com\/what-is-ethereum-and-where-can-i-buy-it\/\" target=\"_blank\" rel=\"noopener\">What is Ethereum?<\/a><\/p>\n<h2>Advantages and Disadvantages of Bitcoin<\/h2>\n<p><span style=\"font-weight: 400;\">To help you decide whether investing in Bitcoin is the right move for you, let&#8217;s explore some of the advantages and disadvantages of the cryptocurrency.\u00a0<\/span><\/p>\n<h3 id=\"advantage\">Advantages of Bitcoin<\/h3>\n<ul>\n<li><span style=\"font-weight: 400;\">Bitcoin transactions are fast with low transaction fees compared to the traditional financial system<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Fully decentralized with no third-party involvement.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Anyone can trade and invest in bitcoin regardless of their age.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">No money \u201cchargeback\u201d after transaction confirmation since it cannot be reversed.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Cross-border transactions<\/span><\/li>\n<li><span style=\"font-weight: 400;\">BTC transactions are pseudonymous.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Bitcoin transactions do not involve banks or require bank accounts.\u00a0<\/span><\/li>\n<li>Bitcoin cannot be banned<\/li>\n<li><span style=\"font-weight: 400;\">BTC transactions are mobile and secure.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">BTC transactions are permanently recorded on the blockchain for reference purposes.\u00a0<\/span><\/li>\n<li>21 million max supply<\/li>\n<\/ul>\n<h3 id=\"disadvantage\">Disadvantages of Bitcoin<\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The price of BTC is volatile. It is called high-risk = high-profile for a reason.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government sees Bitcoin as a threat.<\/span><\/li>\n<li aria-level=\"1\">You cannot access your funds if you lose your private keys<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Bitcoin transactions cannot be canceled.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Bitcoin can be used for illegal transactions since there&#8217;s no central authority.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">High energy consumption.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The layer-one network has an in-built scalability issue. Transactions may take several hours to settle and may cost significantly higher fees.<\/span><\/li>\n<\/ul>\n<h2 id=\"investment\">Is Bitcoin a good investment?<\/h2>\n<figure id=\"attachment_32290\" aria-describedby=\"caption-attachment-32290\" style=\"width: 1776px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-32290\" src=\"https:\/\/coinfomania.com\/wp-content\/uploads\/Bitcoin-Historical-Chart.png\" alt=\"\" width=\"1776\" height=\"800\" \/><figcaption id=\"caption-attachment-32290\" class=\"wp-caption-text\">(<a href=\"https:\/\/coinmarketcap.com\/currencies\/bitcoin\/\" target=\"_blank\" rel=\"noopener\">Bitcoin Historical Chart<\/a>)<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">Many financial experts believe that bitcoin should be an important part of any diversified investment portfolio because its price increases in response to events relating to the crypto industry or other markets such as stocks and bonds causing their price to drop.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although the price of BTC can be volatile in the short term, it has always maintained its value over the long term. Over the years it has served as a hedge against inflation and the erosion of other cryptocurrencies, hence bitcoin is an investment worth considering.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">During the first decade of its existence Bitcoin has proven to be a worthy investment, going from $0.0008 to $69,000 during its current all-time high price in 2021.\u00a0 <\/span><span style=\"font-weight: 400;\">Today the cryptocurrency is trading around $44,000 and still has significant possibility for further increase.<\/span><\/p>\n<p>With that said, Bitcoin proponents often say that there is never a bad time to join the bandwagon. But<span style=\"font-weight: 400;\"> before investing in BTC, make sure you are not investing out of fear of missing out (FOMO) and you understand how the crypto market works. Having an investment strategy is also important as that will help you determine how long you are willing to hold your investment.\u00a0<\/span><\/p>\n<h2 id=\"regulation\">Bitcoin Regulation Around the World<\/h2>\n<p><span style=\"font-weight: 400;\">Since the invention of Bitcoin in 2009, the world has been highly divided on the cryptocurrency debate. Some of its supporters refer to the cryptocurrency as a new monetary system. However, the legal status of the cryptocurrency differs from one jurisdiction to another, and governments around the world are closely observing the fast-rising cryptocurrency debate on how to control it.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In some countries, buying and selling BTC is not illegal as regulators are more concerned about bitcoin use cases. Although some countries are completely against bitcoin thereby banning its citizens from participating in any crypto activities.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Meanwhile, El Salvador signed a bill to <a href=\"https:\/\/coinfomania.com\/el-salvador-bitcoin-legal-tender\/\" target=\"_blank\" rel=\"noopener\">adopt bitcoin as legal tender<\/a>, making it the first country to officially legalize Bitcoin. This opened a window for other countries to adopt the idea of Bitcoin legalization.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Back in November 2021, The Library of Congress (LOC) reported about 103 countries whose governments instructed its financial watchdogs to develop regulatory policies for financial institutions regarding BTC and other cryptocurrencies and their use in AML\/CFT.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Major economies such as the United States have been adamant towards Bitcoin legalization. Although the digital currency is fully regulated by several financial agencies such as the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) both at the federal and state level.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Financial regulators have issued warnings and laid out rules and regulations regarding Bitcoin activities. So far the crypto industry is still booming and who knows these\u00a0 regulations may not have negative effects on Bitcoin.\u00a0<\/span><\/p>\n<p><strong>Read More: <a href=\"https:\/\/coinfomania.com\/tag\/regulation\/\">Crypto Regulations<\/a><\/strong><\/p>\n<h2 id=\"buyingbitcoin\">How to buy Bitcoin for the first time<\/h2>\n<p><span style=\"font-weight: 400;\">The <a href=\"https:\/\/coinstats.app\/blog\/how-to-buy-bitcoin-btc\/\" target=\"_blank\" rel=\"noopener\">steps to buy BTC<\/a> for the first time are not as complicated as you may think. However, you will need to access a crypto trading platform to complete the process.\u00a0<\/span><\/p>\n<p>There are many crypto exchanges that you can choose from, but we recommend that you use a reputable company like <a href=\"https:\/\/coinfomania.com\/binance-exchange-a-complete-beginners-guide\/\">Binance<\/a> or Coinbase for your first purchase.<\/p>\n<p>You can use the steps below to buy BTC on Binance.<\/p>\n<p><strong>Step 1: Create your Binance account<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Millions of customers from all over the world use Binance to buy and sell BTC. By creating an account you agree to the terms and conditions of the <a href=\"https:\/\/coinfomania.com\/crypto-com-will-launch-an-exchange-platform-in-south-korea-by-the-end-of-april\/\">crypto platform<\/a>.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To sign up, head to Binance&#8217;s<\/span> <a href=\"https:\/\/www.binance.com\/?ref=35439047\"><span style=\"font-weight: 400;\">official webpage<\/span><\/a><span style=\"font-weight: 400;\"> or download the Binance trading app available for both Android and iOS users.\u00a0<\/span><\/p>\n<p><strong>Step 2:\u00a0 Verify your Binance account<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Binance implemented a know-your-customer (KYC) as part of its security protocol on the platform which requires users to provide their personal information such as a phone number and a valid identification card.\u00a0<\/span><\/p>\n<p><strong>Step 3: Time to buy BTC<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Once your <a href=\"https:\/\/coinfomania.com\/justin-sun-loads-100m-to-binance-account-what-next\/\">Binance account<\/a> has been verified, it&#8217;s now time to buy BTC. Head on to the homepage and click on the buy crypto option. Then select BTC and choose your preferred method of payment. After that input\u00a0 the amount of BTC you wish to buy.\u00a0<\/span><\/p>\n<p><strong>Step 4:\u00a0 Choose payment method<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Binance offers users two payment options and customers can choose to pay by card or from an existing cash balance.\u00a0 However, if you choose the card method, simply tap on add a new card and input your card details.\u00a0<\/span><\/p>\n<p><strong>Step 5: Activate fiat currency\/share account details<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Before proceeding to add the card details, you will be required to activate the fiat service. To do this, simply click on the box to accept the terms of service and then start.\u00a0 Once done, a menu will pop up asking you to share your account details. Tap on confirm and you are all set to continue with the purchase.<\/span><\/p>\n<p><strong>Step 6:\u00a0 Final Step<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Input your card details and click next to proceed with your purchase.\u00a0<\/span><\/p>\n<h2 id=\"wallets\"><span style=\"font-weight: 400;\">Best Bitcoin Wallets<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">After you have purchased BTC, the next thing that comes to mind is to make sure it&#8217;s properly stored in the right wallet.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bitcoin wallets contain a pair of cryptographic keys known as private and public keys used by the owner to send and receive BTC. Private keys must be kept safe away from unauthorized persons. Anyone who has access to your private keys can control your wallet.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let&#8217;s explore some of the types of wallets you can use to store your BTC.<\/span><\/p>\n<p><strong>Hardware w<\/strong><strong>allets: <\/strong><span style=\"font-weight: 400;\">Hardware wallets are the most secure type of wallets that allow users to store their private keys in a separate offline device. This wallet is recommended for storing large amounts of bitcoins. <\/span><span style=\"font-weight: 400;\">Unlike paper wallets which require you to import your keys to software in order to access your funds, <\/span><span style=\"font-weight: 400;\">hardware wallets can be used interactively.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>Web wallets:<\/strong> <\/span><span style=\"font-weight: 400;\">These are online Bitcoin wallets used mostly on centralized exchanges to send and receive BTC. Web wallets store private keys on an online server controlled by a third party.\u00a0 <\/span><span style=\"font-weight: 400;\">One of the amazing features of this type of wallet is that users can access their funds on the go from any device connected to the internet. However, the funds are not totally controlled by you as the organizations running the platform can gain access to your private keys.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Apart from gaining access to your funds, there <a href=\"https:\/\/coinfomania.com\/find-quadrigacxs-missing-funds-and-get-100000\/\">have been reports of exchanges shutting down<\/a> and users were unable to withdraw their funds.<\/span><\/p>\n<p><strong>Desktop wallets: <\/strong><span style=\"font-weight: 400;\">Just as the name implies, desktop wallets are downloaded and installed on your computer which gives the users total control over the wallet. Private<\/span><span style=\"font-weight: 400;\"> keys are stored directly on your hard drives or solid-state drives (SSD), although they are still connected to the internet.\u00a0<\/span><\/p>\n<p><strong>Mobile wallets:<\/strong> These are wallets designed for small phones. Since we live in the era of smartphones, mobile wallets <span style=\"font-weight: 400;\">are considered the best choice for small investors. The wallets are designed differently to meet your needs. Some focus on security, some on convenience while some are focused on decentralization.\u00a0<\/span><\/p>\n<h2 id=\"faq\"><span style=\"font-weight: 400;\">Frequently Asked Questions About Bitcoin\u00a0<\/span><\/h2>\n<h3>Is Bitcoin a bubble?<\/h3>\n<p>Bitcoin has gained <strong>more than five billion percent in profit<\/strong> since it first started trading in 2010. This has given critics the impression that the entire crypto market is nothing but a speculative bubble waiting to pop.<\/p>\n<p><span style=\"font-weight: 400;\">For clarity, a <a href=\"https:\/\/www.investopedia.com\/terms\/s\/speculativebubble.asp\">speculative bubble<\/a> refers to a situation where the meteoric rise in the price of an asset is not supported by its underlying fundamentals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Many Bitcoin critics have described the digital asset as a bubble, even though fundamental growth have been nothing short of awe since its inception.\u00a0<\/span><\/p>\n<p>For instance, r<span style=\"font-weight: 400;\">enowned investor and vice-chairman of\u00a0 Warren Buffett&#8217;s Berkshire, <\/span><span style=\"font-weight: 400;\">Charlie Munger, warned investors in December 2021 that BTC is a serious bubble.\u00a0 <\/span><span style=\"font-weight: 400;\">According to a<\/span><a href=\"https:\/\/markets.businessinsider.com\/news\/stocks\/charlie-munger-warren-buffett-deputy-markets-bubble-dotcom-boom-cryptocurrencies-2021-12\"><span style=\"font-weight: 400;\"> BusinessInsider report,<\/span><\/a><span style=\"font-weight: 400;\"> the billionaire investor said that the crypto market is worse than the infamous dot-com bubble.<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">&#8220;The dot-com boom was crazier in terms of valuations than even what we have now. But overall, I consider this era even crazier than the dot-com era,&#8221; he said.\u00a0<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Similarly, financial adviser Ryan Payne, president of Payne Capital, also commented on BTC, saying it&#8217;s going to be ugly when the<\/span> <a href=\"https:\/\/finance.yahoo.com\/news\/crypto-is-one-of-the-biggest-bubbles-ever-strategist-145315361.html\"><span style=\"font-weight: 400;\">financial bubble bursts.\u00a0<\/span><\/a><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">&#8220;This whole Bitcoin (BTC) thing \u2014 this whole cryptocurrency \u2014 is one of the biggest bubbles ever,&#8221; Payne said.\u00a0<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Despite this, Payne also believes that the price of bitcoin can still go higher because of its excessive liquidity.\u00a0<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">&#8220;There&#8217;s too much money out there that can funnel into this market. It&#8217;s just becoming a bigger and bigger casino,&#8221; he added. <\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">For the crypto community, Bitcoin is the utmost store of value and the most solid hedge against inflation. Irrespective of criticisms from critics around the world, the value of BTC has remained glued to the forces of demand and supply.<\/span><\/p>\n<h3>Is Bitcoin a Metal?<\/h3>\n<p><span style=\"font-weight: 400;\">Bitcoin is not a metal. The digital asset has no physical appearance, which means you can&#8217;t hold it.\u00a0<\/span><span style=\"font-weight: 400;\">Bitcoin is best described as a string of numbers and letters stored on a computer.<\/span><\/p>\n<h3>Is there a physical bitcoin?<\/h3>\n<p>The short answer is no.\u00a0 However, t<span style=\"font-weight: 400;\">here are some physical coins that claim to be physical bitcoins that you can touch like regular coins and fiats.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The first physical bitcoins are called <a href=\"https:\/\/en.bitcoin.it\/wiki\/Casascius_physical_bitcoins\" target=\"_blank\" rel=\"noopener\">Casascius Bitcoin<\/a> which was created by a user named Mike Caldwell. These physical coins have been around for years with only a few firms associated with them.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Casascius Bitcoins were later banned by the US Financial Crime Enforcement Network (<a href=\"https:\/\/coinfomania.com\/fincen-penalize-eric-powers-for-aml-violation\/\">FinCEN<\/a>) after being classified as money transmitting.\u00a0<\/span><span style=\"font-weight: 400;\">Other physical Bitcoins include Alitin Mint, Titan Bitcoin, Cryptmint coin, Antana Coins, and the rest.\u00a0<\/span><\/p>\n<h3>How old do you have to be to buy Bitcoin?<\/h3>\n<p><span style=\"font-weight: 400;\">Bitcoin is a digital currency with no law that says you have to be a certain age to buy it.\u00a0<\/span><span style=\"font-weight: 400;\">However, because of the know-your-customer (KYC) policy implemented in some crypto exchanges,\u00a0 teenagers younger than 18 are not eligible to buy <a href=\"https:\/\/coinfomania.com\/outrageous-this-user-paid-an-83-btc-fee-for-a-single-transaction\/\">BTC<\/a>.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Underaged teenagers can still buy and sell BTC on <a href=\"https:\/\/coinfomania.com\/7-anonymous-crypto-exchanges-no-kyc\/\" target=\"_blank\" rel=\"noopener\">anonymous crypto exchanges<\/a> without using these platforms. Parents and relatives can also purchase BTC for their kids like <a href=\"https:\/\/coinfomania.com\/why-bitcoin-homeland-security-seize-2-billion-cash\/\">this 12-year-old who went in all on bitcoin<\/a>.\u00a0<\/span><\/p>\n<h3>Can you buy partial bitcoin?<\/h3>\n<p><span style=\"font-weight: 400;\">Yes, you can buy partial bitcoin. A bitcoin is made of smaller units called satoshis while one BTC consists of 100 million satoshis. This means that you can buy BTC in fractions with a minimum of one Satoshi.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.finder.com\/cryptocurrency\/exchanges\" target=\"_blank\" rel=\"noopener\">Some crypto exchanges<\/a> such as Coinbase allow you to buy as little as $25 worth. You can also buy fractions of BTC using Bitcoin ATMs available in your location.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">How did people buy Bitcoin in 2010?<\/span><\/h3>\n<p>The first known use of BTC in real-life payment happened in May 2010 when <span style=\"font-weight: 400;\"><a href=\"https:\/\/coinfomania.com\/3-8-billion-bitcoin-pizza-day-2021\/\">Laszlo Hanyecz used 10,000 BTC <\/a>\u00a0(now worth $460 million) to pay for pizzas worth around $25.\u00a0<\/span>But before that trade, bitcoin was mostly obtained via mining since it required less computational power unlike today.<\/p>\n<h3>Can Metamask hold bitcoin?<\/h3>\n<p><span style=\"font-weight: 400;\">No. Metamask cannot store BTC because it&#8217;s an Ethereum wallet designed to host only ERC-20 assets and other assets that run on networks powered by the Ethereum virtual machine. <\/span><span style=\"font-weight: 400;\">However, you can store Wrapped Bitcoin (WBTC) on Metamask. WBTC is a wrapped version of BTC built on the Ethereum blockchain.\u00a0<\/span><\/p>\n<h3>What happens to my bitcoins when I die?<\/h3>\n<p><span style=\"font-weight: 400;\">Unless someone can access your Bitcoin or other cryptocurrency accounts when you die, your assets will be lost forever and there is nothing anyone can do about it.\u00a0<\/span><span style=\"font-weight: 400;\">It is important to maintain a will which includes detailed information on how to access your crypto portfolios. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">But this might change in the future because there are some smart people who are currently building solutions to solve the &#8220;<a href=\"https:\/\/coinfomania.com\/chainlink-ngrave-remedy-crypto-death-problem\/\">crypto death problem<\/a>.&#8221;\u00a0<\/span><\/p>\n<h3>Are there taxes on bitcoins?<\/h3>\n<p><span style=\"font-weight: 400;\">The Internal Revenue Service (IRS) addressed BTC and other cryptocurrencies as assets similar to property in 2014. This means that <a href=\"https:\/\/coinfomania.com\/cryptocurrency-tax-laws-what-is-a-1099-tax-form\/\" target=\"_blank\" rel=\"noopener\">bitcoins are taxed<\/a> in the same way as gold and other stocks. In countries like India, crypto investors are <a href=\"https:\/\/coinfomania.com\/indian-crypto-traders-pay-30-tax-april-1\/\">subjected to pay up to 30% of their crypto gains<\/a>.\u00a0<\/span><span style=\"font-weight: 400;\">The taxes are paid after you have realized\u00a0 profits from trading cryptocurrency and not when you&#8217;re still holding the asset.\u00a0<\/span><\/p>\n<h3>Can the government take your bitcoin?<\/h3>\n<p><span style=\"font-weight: 400;\">The government can take your bitcoin if used illegally. As a matter of fact, Uncle Sam has done pretty well in this aspect since the invention. <\/span><span style=\"font-weight: 400;\">Back in 2020, the United States Department of Justice raided a dark web marketplace called the <\/span><a href=\"https:\/\/coinfomania.com\/silk-road-founder-ross-ulbricht-apologizes\/\"><span style=\"font-weight: 400;\">Silk Road<\/span><\/a><span style=\"font-weight: 400;\"> and seized over one billion worth of bitcoin which were used to buy illicit products.\u00a0<\/span><\/p>\n<p>It is also worth noting, however, that the government cannot take your bitcoin if they cannot access your private keys.<\/p>\n<h3>What happens when all bitcoins are mined?<\/h3>\n<p><span style=\"font-weight: 400;\">Bitcoin has a fixed supply of 21 million coins. Once all the coins are finally mined in the year 2140, the amount of BTC in circulation will be permanently fixed. <\/span><span style=\"font-weight: 400;\">Bitcoin mining will become less profitable and miners will only receive rewards from processing transactions.\u00a0<\/span><\/p>\n<h2 id=\"conclusion\">Conclusion<\/h2>\n<p>Understanding Bitcoin and how it works is important if you must participate in the cryptocurrency market. In this comprehensive guide,\u00a0we answered important questions such as what is Bitcoin?\u00a0 Who created Bitcoin? Who is Satoshi Nakamoto? What does a real bitcoin look like? Who is backing Bitcoin? Is bitcoin a good investment? etc.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin is a fully decentralized peer-to-peer electronic cash system that allows users to exchange value without intermediaries. It is the [&hellip;]<\/p>\n","protected":false},"author":30,"featured_media":32186,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43,1817],"tags":[54,234,128],"ppma_author":[1782],"class_list":["post-32155","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-guides","category-bitcoin","tag-bitcoin","tag-guides","tag-regulation"],"acf":[],"authors":[{"term_id":1782,"user_id":30,"is_guest":0,"slug":"marcel","display_name":"Chimamanda Marcel","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/e4d9ebad7540d24a45c85e1dd6f550fe?s=96&r=g","first_name":"Chimamanda","twitter":"https:\/\/twitter.com\/Mandynames","instagram":"","linkedin":"","user_url":"","last_name":"Marcel","facebook":"","description":""}],"_links":{"self":[{"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/posts\/32155"}],"collection":[{"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/users\/30"}],"replies":[{"embeddable":true,"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/comments?post=32155"}],"version-history":[{"count":6,"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/posts\/32155\/revisions"}],"predecessor-version":[{"id":304868,"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/posts\/32155\/revisions\/304868"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/media\/32186"}],"wp:attachment":[{"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/media?parent=32155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/categories?post=32155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/tags?post=32155"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/coinfomania.com\/wp-json\/wp\/v2\/ppma_author?post=32155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}