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Posted March 21, 2018 by A-Jay Orr

A Pain-Free Lesson On Bitcoin

Ladies and gentlemen, we are officially living in an alternate universe. By now, you’ve heard the term Bitcoin tossed around on every major news network. And you probably have an inkling about what Bitcoin is. You might also have this inexplicable urge to avoid it because…well…it’s yet another abstract digital thing that you have to wrap your head around. Creating currency out of thin air? That’s absurd! It’s also the reality we live in today.

I’m about to break all this Bitcoin business down for you with some fun facts along the way that will blow your mind!

 

What the heck is Bitcoin?

Bitcoin is a form of digital currency. It’s not the only “digital currency” that exists, but Bitcoin was the first of its kind and is considered the most valuable. This currency can either be bought, received, or earned. The process of earning Bitcoin is called “mining” but we’ll get to that later.
 

Here’s where things get bizarre:

  • Nobody knows the true identity of Bitcoin’s creator.
  • Despite not being recognized by our government as “official” currency, it’s completely legal and used by mega-brands like Microsoft, Overstock, Expedia, and Dish.
  • The first transaction with Bitcoin occurred on May 22, 2010, by developer, Laszlo Hayecz.
  • Hayecz had a hankering for some pizza and successfully traded 10,000 Bitcoins for it.
  • Today that equates to roughly $99 Million!
 

How the heck do you get Bitcoin?

It’s actually pretty easy. First, you head on over to an online “exchange” like Coinbase. Here, you can download a “virtual wallet”. This wallet is what you will use to send, receive, and store Bitcoins for use online or in select brick and mortar stores (very select). Purchasing Bitcoins does require that you connect your bank, debit, or credit card with your exchange account. But supporters of Bitcoin rant about its high level of security.
 

Fun facts:

  • One Bitcoin currently costs about $8,883. Yeah…
  • However, for all of us middle-class people, it is possible to buy fractions of a single Bitcoin, up to eight decimal points.
 

What the heck is blockchain?

Bitcoin goes hand-in-hand with another term, “blockchain”. Blockchain is how all the Bitcoin transactions are recorded and managed across the globe. In essence, it’s a shared public ledger on which the entire Bitcoin network relies. While transactions are taking place, the blockchain is validating and recording every single one to confirm authenticity.
 

Fun fact:

The ledger began on January 3, 2008, making bitcoin only 9 years old compared to the American dollar, which is over 230 years old.

 

How the heck does Bitcoin involve “mining”?

Remember earlier in this article when we talked about the different ways you can acquire Bitcoin? Mining is one of them. But instead of picks and pans, “miners” use hardware and software. And instead of digging for gold, they are performing a job on behalf of the Bitcoin network. That job is to process transactions and, by doing so, uphold network security. In exchange, they earn Bitcoins. In other words, miners are adding transaction records to Bitcoin’s public ledger (or blockchain). Of course, this is a high-level look at mining. There’s A LOT more to it. Learn about it here.

Here’s the weird part. Just like in the wild west, anyone can start mining for Bitcoins! All you need is the right mining tools, or, in this case, the right hardware. Not surprisingly, you can purchase this hardware on Amazon for a few thousand bucks. See for yourself.

 

What about the bad guys?

Bitcoin is often associated with cybersecurity and ransomware attacks. The story goes something like this:

An overseas entity dupes the victim into clicking a link or sharing personal information. The next thing the victim knows, their computer is on complete lockdown, and their files are inaccessible. A disturbing message appears, demanding hundreds of dollars in Bitcoin by a specific time and date. In exchange, the criminal will return access to the computer and files.

This is no joke. We tell you exactly how to handle this situation in our Ransomware Hostage Rescue Manual

Because bitcoin can be used to make private and irreversible payments, it is an attractive form of currency for cybercriminals. But that doesn’t mean it’s any less safe than paper money or credit card fraud. Furthermore, Bitcoin is not illegal. Criminals use paper money all the time — it’s still lawful.

 

Why the heck bother with Bitcoin?

  • It’s universal currency; it can be used anywhere in the world.
  • Transactions are supposedly more secure.
  • Bitcoins are impossible to counterfeit.
  • The Bitcoin network and process has several protections in place to avoid theft and loss, such as requiring multiple signatures, encryption, and backup.

There you have it, the quick and easy on Bitcoin currency. Since its mysterious creation, Bitcoin has displayed volatile swings in value. At one time, the value of a single Bitcoin topped $19,000! More recently, Bitcoin’s value took a sizable Stock Market hit, dipping below $9,000. Ergo, enter the Bitcoin market with caution.

It’s a crazy, complex, sometimes bizarre digital world out there. Keep it simple. Subscribe to our blog!