Currently, Bitcoins are widely talked by many people as one of the medium of exchange in the crypto world or commonly called cryptocurrency. Something you need to know that this currency is not controlled by banks or any other institutions. It can be stored in a personal device, such as a computer or laptop with a wallet file format. Bitcoin uses cryptography which already provides a variety of basic-level security functions. This makes the currency that can be used for transaction and investment.
3 Main Things Making Bitcoin Currency Works
To understand how Bitcoin works, we must first know the parts of Bitcoin itself. It consists of three parts: blockchain, mining network, and wallet.
- Block Chain
Block chain is the first part of this currency that records all of the transactions done with Bitcoin. The transaction is stated complete when entered into this section. This contains all the series of transactions both new transactions and old ones that have been stored a long time and each is connected with the previous block. We can even see and trace them all.
People who keep and guard transactions are called miners. They are called miners because they are tasked with mining new blocks which will keep a list of new transactions. As compensation for this work, they will get some Bitcoin as an incentive. Their role is indeed very important because it is mainly to make the Bitcoin network system works continuously.
Bitcoin that we have will be stored in the wallet later. However, what is actually stored is only a private key that gives Bitcoin owners access to add transactions to the block chain. Bitcoin itself is stored as a transaction record that is in the block chain.
How to Use Bitcoin
To make a transaction, the first thing needed is a Bitcoin wallet. This wallet is only a private key pair that is used to mark transactions. However, we need a safe place to store this key because if lost all the coins will also disappear from circulation. The level of security depends on the amount of money you want to save. There are various types of wallets for almost all computer devices including smartphones. we need to remember that there is no cost to make a wallet, so there is nothing to limit us to make it.
After you made a wallet, you need to get a coin. It means we need to buy bitcoin singapore from an exchange or you can use another method like a bank transfer. When you buy Bitcoin with bank transfer, you will be asked for the wallet address. When the process is done, the place of exchange will send coins to the wallet.
Some companies receive payments with Bitcoin. There will be a wallet address for sending coins to the checkout section. The seller will receive a block chain from the network and check the transactions sent to the particular wallet. In the process, the seller who receives the money will usually wait until the transaction reaches an average of six blocks. Usually it takes about an hour to complete the transaction. After the transaction is completely done, you will get the product you want.
The Advantages of Using Bitcoin
When using Bitcoin for common transactions, you will get several advantages. First, avoiding counterfeiting money. Counterfeiting of money, in general, is often the case and easily done by various elements. however, cryptocurrency such as Bitcoin cannot be falsified. Then, in terms of security, which you can conduct transactions without you need to show your identity. In addition, by using Bitcoin you can make a transaction quicker and more practical.