Bitcoins: What Are They And How Are They Used?

There is a frenzy going on with cryptocurrencies and many people are left wondering what exactly bitcoin is. Bitcoin is a new type of currency that is becoming more and more popular. It was originally created by someone using an alias named Satoshi Nakamoto back in 2009. The transactions are made without using a middleman. This essentially means there are no banks involved.

Bitcoin is now able to be used to shop for furniture online, book hotel reservations and buy games online. While many things can now be purchased with it, the real hype is about how some people are getting rich from trading it. The price of bitcoin rose drastically into the thousands last year.

Why Bitcoins?

The best thing about bitcoins and the reason they are so popular is because they are anonymous. Additionally, trading or making purchases internationally is a lot cheaper because bitcoins are not tied to a specific country. Because of this, there are no regulations involved with using them or selling them. Many small businesses like to accept bitcoins because they don't get charged debit or credit card fees. Other people love to buy bitcoins for investment purposes in hopes that they will go up in value.

Acquiring Bitcoins

• Marketplaces- There are a few ways in which someone can acquire some bitcoins. The easiest place to get them is through marketplaces that are referred to as "bitcoin exchanges." These exchanges allow people to sell or purchase bitcoins using different forms of currency. A leading bitcoin exchange is called Coinbase. Others include marketplaces such as Bitfinex and Bitstamp. Security can sometimes be a concern because of the anonymous nature of these forms of currency.

• Transfers- Bitcoins are also able to be traded between multiple people as well. You are able to send or receive them using mobile apps for the exchange you are using or your computer. It is similar to sending cash digitally. People like it because there are no fees associated with exchanging money.

• Mining- An interesting way that some people acquire bitcoins is by mining them. People can "mine" bitcoins by solving complex math puzzles to earn them. This is how the bitcoins are originally created. As of yet, winners are awarded just over twelve bitcoins for solving puzzles every ten minutes.

Owning Bitcoins

When you own bitcoins, they are stored in your "digital wallet." This "wallet" can exist either on a user's computer, hard drive or the cloud. The wallet is a virtual bank account that will allow the users to receive or send bitcoins. The wallet may also be used to spend the bitcoins for paying for goods and services. Unlike most traditional bank accounts, these bitcoin wallets allow users to not have to spend anything on fees. The downside to the wallets is that they are not insured or regulated by the FDIC. If your bitcoins end up getting stolen, you will not be able to recover them.


All bitcoin transactions get recorded within a public log. However, the names and other information of the buyers and sellers don't get recorded. The only thing that is stored about each transaction regarding the buyers is their wallet IDs. This is what keeps the transactions of bitcoin users private. It can also let people buy or sell things without it being easily tracked back on them. Unfortunately, this is now the most used form of currency for people who want to buy or sell drugs online. It is also popular for those that like to participate in other forms of illicit activities.

The Future Of Bitcoin Is In Question

As of now, the future of bitcoin is still a little up in the air. No one really knows what will become of this type of currency. In most places, it is still fairly unregulated. However, in other countries such as Australia, Japan and China, they have begun trying to regulate the bitcoin currency. Many governments have a big problem with the bitcoin being used widely as currency because they cannot tax it. Governments also don't like the fact that they don't currently have any control over the currency as well. For now, it seems like bitcoin will be around for a while and many people are taking full advantage of its benefits.

Featured Articles

Are you qualified for Disability Grants?

People with disabilities are at a disadvantage when it comes to finding a stable income or a path to reliable health insurance and healthcare. There are some benefits and grants available for people with disabilities, though. Finding t...

Read More

Free Cell Phones, Unlimited Talk & Text from the Government

Established in 1985, the F.C.C.’s Lifeline Program provides low income families with very low-cost or, with the support of cell phone service providers, no cost phone service. Cell phones were added to the program ...

Read More

You Can Money With Affiliate Marketing-Step By Step Guide

Affiliate marketing is a practice where a person promotes a businesses's services or products. If someone purchases the products and services, then the promoter will get a portion of the profits. This is one of the sim...

Read More

Is Now the Right Time to Cash in Your Savings Bonds?

Many people purchased savings bonds decades ago with the assumption that they were a safe investment to make. After all, the ability to increase your investment value over time while also mitigating risk sounds amazing. Som...

Read More