Blockchain. Bitcoin. Mining. If you’ve heard these terms around the Internet connected to online payments, you may be feeling a little behind. Don’t stay in the past! Instead, read up on blockchain technology and how it’s changing the way we think about payments, currency, and the entire financial system.
What’s the Blockchain, and How Does It Relate to Bitcoin?
To put it simply, the blockchain is a public ledger. It’s shared between many different parties, in which anonymous transactions are recorded. The recorded transactions can’t be altered once they’re entered, but they can be viewed by anyone in the world. These transactions record the transfer of bitcoins from one user to another.
Bitcoins aren’t actual physical coins; instead, they’re a type of cryptocurrency, or data, and recording their transfer to another individual in the blockchain is the way you show that they’re now in another person’s ownership. There aren’t any fees or third parties trying to take a slice of the pie. In other words, the blockchain is a ledger that keeps track of all this virtual money being exchanged; it’s just different in that it can’t be erased, shredded, or tampered with like a physical ledger.
How is Bitcoin Mined?
Bitcoin miners use a computer and expensive equipment to verify transactions in the blockchain. This ensures that it’s a secure, self-regulated system that can continue indefinitely. Miners do this not only because they believe in the future of Bitcoin, but also because solving problems within the blockchain means being rewarded with Bitcoins.
Each of the blocks will be confirmed by numerous independent sources. That means so no one person has too much power–there’s no one unscrupulous guy in a basement getting filthy rich all by himself. Mining Bitcoin may seem attractive, but be aware that it’s not just a casual part-time gig. It’s sometimes described as a game, but it’s not an easy one to win. Expensive hardware, extensive processing capability, and electrical costs through the roof mean that only well-connected, centralized miners are likely to profit from here on out.
How Can I Use Bitcoin?
If you’re a business owner, you can put a sticker on your site declaring that you accept bitcoin (“Now Accepting Bitcoin!”) as payment; you can also pay suppliers or freelancers in bitcoin if they accept it. Getting started really isn’t difficult. You simply learn how to use it securely, choose a Bitcoin wallet (which can be done in a matter of minutes), and you’re ready to go. You can then buy and spend them as you wish. So how much is a Bitcoin worth? Though the Bitcoin rate changes like any exchange rate, one Bitcoin is currently worth a little over $1000 USD. The value of Bitcoin is predicted to continue to grow far more rapidly than the stock market or any other type of investment, so it’s not a bad idea to get it and then hang on to it. However you choose to use it, it’s a great way to diversify your investments and give your customers, suppliers, and clients another way to pay you.
