How Bitcoin works is often the topic of confusion for new users of this digital currency, so this handy guide is specifically designed to help a new user understand the system. Bitcoins can be used from any internet connected device, but the first step that everyone must take is to install a Bitcoin wallet. Once the wallet is installed, your very first Bitcoin address will be generated and you’re ready to start exploring the fantastic world of this private and secure online currency!
Bitcoin Addresses Can Be Shared
Just as you can share your e-mail address to get paid with digital currency providers like PayPal, you can share your Bitcoin addresses with your family, friends, business partners, and customers to have them pay you in Bitcoins. The difference, however, is that every generated address should only be used once and then discarded. As Bitcoin describes it, sending Bitcoins is just like sending an e-mail to someone – the only difference is that you’d be sending them from a new e-mail address every single time.
Each wallet is associated with the Bitcoin block chain, a necessary component to keep the complex trading system accurate and fair. The block chain tracks wallet balances, verifies new transactions, and makes sure all information is up-to-date at any given time.
Did You Know That Bitcoins Can Be Mined?
Just as you’d sign a credit card receipt to prove that you actually made a purchase, Bitcoin transactions include a secret key that acts as a signature to verify a purchase has been made. This key is broadcast between users and helps the Bitcoin system recognize that an authorized transaction has taken place. Most transactions are usually confirmed within 10 minutes of making them, generating a transfer of Bitcoins from the buyer’s wallet to the wallet of the seller.
Why does it take 10 minutes for a purchase to be confirmed? Because Bitcoin mines all transactions to examine the data within each purchasing attempt. Each purchase or wallet transfer request must include specific packets of data for Bitcoin to recognize them as being authentic. This information is mined, recognized, and then either approved or rejected based on what is discovered during the process. This prevents transfers from being modified after they are made and eliminates the possibility of one person controlling the entire block chain.
How Can I Get Started With Bitcoin Today?
There are three ways for you to get Bitcoins: by accepting them as payment from someone, by purchasing them from a family member or friend, or by utilizing an exchange to purchase them with standard funds. If you’re interesting in trading, purchasing, or being a retailer or service provider that accepts Bitcoins, the first step to take would be to create your very first wallet on your internet connected device. From there, you can become part of the block chain and ultimately, part of the private and secure Bitcoin community.
What are you waiting for? Start using Bitcoins today!