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What Bitcoin (BTC) is: a guide for beginners

The primary innovation of the 21st century, the "new gold", the first cryptocurrency. There are multiple definitions of Bitcoin. Despite the fact that BTC was initiated in 2008, it is still debatable and has been subject to myths. Let's discuss the most significant of them today.

 

What is different about Bitcoin that makes it stand out from other forms of payment?

Let's imagine the scenario: you visited the store, chose a coat, went to the register, paid with cash, and now you have a new coat. Some time has passed, but you have decided to purchase another coat, this time you did it through the Internet. You went to the website, selected a product, and purchased it using your card. 

 

The first and second situations are already distinguishable.

1. Cash is the currency in your wallet, but the money on your card is actually from the bank.

2. The purchase was conducted offline and online.

 

But how to transfer money online without a middleman? With the assistance of Bitcoin, of course!

 

BTC is basically "digital currency". You extract it from your online wallet and transfer it to anyone you want. No financial institutions in the country will be capable of taking this money from you.

 

This is because Bitcoin is the first currency that is decentralized. If euros and dollars are directly dependent on political figures and the national bank, then BTC is dependent on every participant in the process.

 

"Does that mean that no one controls Bitcoin and I can utilize it as much as I want?"

Unfortunately, or fortunately, this isn't the case. Bitcoin is derived from blockchain technology. If interpreted literally, it is considered "a chain of blocks". These blocks are connected and safeguarded via cryptography. Other activities that can be conducted on blockchain, but the technology is primarily responsible for maintaining a permanent record of all transactions that are officially approved. Transactions are processed and approved by the network as a whole, and anyone can participate in the process. However, no one controls the system, which implies that no one can create new Bitcoin's or prevent others from making payments.

 

A bit confusing, isn’t it? Let's use some examples. Your grandmother has a garden. She prefers organized things, so she'll write down the information in her notebook regarding each plant. Overall, she cultivated 100 plants, and only three plants were able to grow. In March, she cultivated 10 plants. Every plant has a unique number associated with it, and when she sends the plants to you, she'll write down all the information regarding this transaction. This is how she maintains oversight of all products, and this notebook contains information about every exchange. Occasionally, your grandfather records information on the spot as well, occasionally you do it too, but no one has the right to take something from there. 

 

"However, grandmother has only a limited number of plants, which makes it easier to follow transactions."

Also, there is a specific number of Bitcoin that is limited to 21 million. To this point, 19 million have been mined.

 

Who created Bitcoin and how?

"Okay, 21 million Bitcoins, but who created them?"

Satoshi Nakamoto is attributed to being the creator of the first cryptocurrency. But nobody knows what kind of individual or group of individuals it is. There were various hypothesized responses: from Elon Musk to a consortium of technical organizations, but it is very unlikely that we will learn who is behind this pseudonym in an attempt to ensure safety. 

 

However, the intentions of Nakamoto are apparent: to give people the power to purchase goods protected by an algorithm, not by a certain directorship. 

 

What is the exact mechanism that safeguards Bitcoin?

Remember what we said about blockchain earlier? Following it, another important concept should be mentioned - mining.

 

Mining is the procedure of acquiring new tokens in the blockchain by following specific rules.

 

As we previously described, a blockchain is a series of blocks. Miners utilize equipment that is specific to the decryption process, this process is rewarded with 6.25 BTC. However, these individuals don't simply mine new coins; they also give value to them and make all transactions on the network safe. 

 

Should you purchase Bitcoin?

In 2022, Bitcoin did not have the best of times. If Bitcoin in 2021 achieved its highest recorded value of $69,000, then in November 2022, its value dropped to $16,000. The contrast is stark.

 

When talking about cryptocurrency, it's important to understand that the market is highly erratic. The prices of cryptocurrencies are not held in a specific range (except for stablecoins). However, the golden rule of investment is still the same: "Buy low, sell high." As a result, many experts believe that now is the ideal time to enter the market. However, the choice is always yours, and you should be aware of the risks associated with buying cryptocurrency.

 

Where to buy Bitcoin?

If you agree that it's now the ideal time to purchase Bitcoin, then we will explain to you what is the most beneficial service.

 

Kolo is a platform that supports multiple currencies, that allows you to buy, sell and exchange cryptocurrencies. Why is it beneficial to purchase with its assistance?

 

1. Easy-to-use interface.

You don't have to spend half an hour thinking about where to click (as occurs on some exchanges due to the greater number of functions).

 

2. No hidden fees.

Pay and get as much as you expect.

 

3. Fast transactions

Buy, sell and swap your BTC as quickly as possible

 

You can read the instructions here.