How Bitcoin Works

Bitcoin is a decentralized form of cryptocurrency. This means that they are not regulated by either the financial institution or the government. So, unlike a traditional bank account, you don’t need a long list of documents, such as an ID, so you can set up what’s known as a bitcoin wallet. A bitcoin wallet is something you will use to access your bitcoins and send bitcoins to others.

How to set up an account

You can purchase a bitcoin wallet from a bitcoin broker such as Coinbase. When you open a wallet through a certified broker, you are given a bitcoin address, which is a series of numbers and letters, similar to the bank account number and a private key, which is also a series of numbers and letters that serve as your password.

How bitcoin works as an anonymous payment processor

You can do 3 things with bitcoins, you can make a purchase, send money anonymously to someone or use them as an investment. More and more merchants are accepting bitcoin as a form of payment. By using bitcoin instead of cash, you are essentially making this purchase anonymously. The same goes for sending money, assuming you don’t need to submit a mountain of payments in order for you to be able to create bitcoin anonymously, in fact, you can send money to another anonymously.

How bitcoin works as an investment

The value of bitcoin fluctuates from time to time. To put everything in perspective, back in early 2013, the average price of bitcoin was about $ 400 per bitcoin, but by the end of 2013, the price of bitcoin had risen to more than $ 1,000. This meant that if you had 2 bitcoins worth $ 800 in early 2013 and you kept them as an investment until the end of 2013, those two bitcoins would cost more than $ 2,000 instead of $ 800. Many people keep bitcoin due to the fact that their value fluctuates.

Bitcoin casinos and poker sites

Due to the anonymity of bitcoin the gaming industry has adopted bitcoin as a payment method. Both casinos and bitcoin poker sites come to life and offer their players to make deposits, play with bitcoins at tables and withdraw money directly to their wallet. This means that there are no taxes and no opportunities for state control. Just like a regular casino in Nevada, where you don’t need to register anywhere, and all your transactions are anonymous.

How do you send bitcoin

To be able to pay for goods and services or send a bitcoin to a private person, you need 3 things. Your bitcoin address, your private key and the person’s bitcoin address. From now on, through your bitcoin wallet you will place 3 pieces of information: input, balance and output. Input refers to your address, balance – to the number of bitcoins you are going to send, and output – is the address of the recipient.