🚀 Breaking Down Bitcoin

Breaking Down Bitcoin

₿ Bitcoin is known as the darling of the crypto world… so let’s learn why so many investors adore it! 💎

What is Bitcoin?

Simply put, Bitcoin (BTC) is a type of digital money. It’s a decentralized digital currency, that has no central bank or single administrator, and it can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.

Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. This decentralized ledger system is used to create, distribute, trade and store bitcoin. Here's a breakdown of the main features and characteristics of Bitcoin:

• Decentralized: Unlike traditional currencies, Bitcoin operates without a central authority or central bank. Its decentralized nature ensures that no single entity has control over the entire Bitcoin network.

• Digital: Bitcoins exist only in digital form and are not issued as physical notes or coins.

• Cryptographic: Bitcoin uses cryptographic techniques for the creation of new coins (through a process called mining) and the verification of transactions. This ensures that transactions are secure and can't be tampered with once they are included in the blockchain.

• Blockchain: Bitcoin transactions are stored on a public ledger known as the blockchain. Once a transaction is added to the blockchain, it is nearly impossible to alter, providing a high degree of security against fraud.

• Limited Supply: Bitcoin has a fixed supply cap of 21 million coins. This scarcity is built into the code of Bitcoin itself and is part of what gives Bitcoin its value.

• Pseudonymous: While transactions and Bitcoin addresses are publicly recorded in the blockchain, the identities of the parties involved remain pseudonymous, making it difficult (but not impossible) to tie them to real-world identities.

• Divisibility: Each Bitcoin is divisible into 100 million smaller units called satoshis (or sats), named after Bitcoin's pseudonymous creator, Satoshi Nakamoto.

• Open-Source: Bitcoin's software is open source, meaning its code is available for anyone to see, review, and modify. This transparency has helped to establish trust in the system.

Who Invented Bitcoin?

Bitcoin was invented in 2008 by an unknown person or group of people using the pseudonym Satoshi Nakamoto. The currency began use in 2009 when its implementation was released as open-source software. The exact identity of Satoshi remains unknown to this day (but here at Rallie, we think it’s likely a woman). 😉

The motivation behind Bitcoin was to create a currency that is independent of any central authority, transferable electronically, and has very low transaction fees. Over the years, Bitcoin has not only become a popular medium of exchange but also a form of digital gold and a store of value for many investors.

Buying Bitcoin

If you’re looking to buy Bitcoin, there are few ways to go about it. Let’s break them down:

• Cryptocurrency Exchanges: These are online platforms where users can exchange their local currency or other cryptocurrencies for Bitcoin. Examples include Bitbuy, Coinbase, or Kraken. Simply create an account, verify your identity, deposit funds, and then purchase Bitcoin.

• Bitcoin ATMs: Similar to traditional ATMs, but for buying (and sometimes selling) Bitcoin. You feed in local currency, and the machine sends Bitcoin to your specified wallet address. However, fees can be higher than online exchanges.

• OTC (Over-The-Counter) Trading: For larger transactions, OTC services can be more private and efficient. These are facilitated by brokers who find buyers/sellers willing to trade large quantities of Bitcoin without impacting the market price too much.

• Bitcoin Mining: While not a purchase method, you can obtain Bitcoin by contributing computational power to process transactions and secure the Bitcoin network. This requires specialized equipment and can be resource-intensive.

• Accepting Bitcoin as Payment: If you run a business, you can accept Bitcoin as a payment method for goods or services. There are payment processors like BitPay that can facilitate this and even convert Bitcoin payments to local currency if desired.

👍 Remember, don’t get intimidated by the price of one Bitcoin, you can buy portions of it in fiat currency like USD or CAD.

To safely store your Bitcoin, you need to have a crypto wallet, check out your options with the embedded link and/or our wallet course below. 🤓

Once you learn the basics, the rest gets so much easier.

Want to some more details on how to buy crypto, what to watch out for, crypto taxes and more? 😎 Check out our courses! 

We hope you learned something about Bitcoin today! Let us know if you have any questions or suggestions for the next blog. ✌️

_{DISCLAIMER: This is not financial or legal advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.}