Bitcoin (BTC) is the first and most well-known cryptocurrency.

Whether you’ve heard about it from friends, seen headlines and social media, or are just curious, Bitcoin is more than just digital money. It’s a revolutionary technology that’s changing the way we think about finance, ownership, and trust. It’s so powerful and disruptive that it’s reshaping the established global economy. Bitcoin’s technology has also laid the foundation for thousands of other cryptocurrencies and tokens, and has shaped the digital age in profound ways. As a beginner, understanding the basics of Bitcoin will give you the knowledge and tools to participate in this amazing new financial system. Whether you’re interested in buying Bitcoin as an investment, using it for transactions, or just learning more about the technology, the world of “Decentralized Finance” that Bitcoin is a part of offers endless possibilities.

This article will walk you through the basics of Bitcoin, from what it is, how it works, and how you can own it, to the broader implications it has on the global economy. By the end of this article, you will have a solid foundation in Bitcoin and digital currencies, and will be ready to explore this new frontier in the world of finance.

What is Bitcoin?

Bitcoin is the first decentralized digital currency created in 2009 by an anonymous individual or group of individuals under the pseudonym "Satoshi Nakamoto". Bitcoin was created in response to the financial crisis of 2008. It challenged the centralized financial systems and banks, whose actions had created global economic turmoil. Unlike traditional currencies issued by governments and/or central banks (such as dollars or euros), Bitcoin operates without a central authority such as a bank or government. Instead, it relies on a peer-to-peer network and cryptography to secure transactions and control the creation of new units.

Key Features of Bitcoin (BTC):

- Decentralization: Bitcoin is not controlled by a single entity. It is maintained by a network of computers (called nodes) that validate transactions and record them on a public ledger called the Blockchain.
- Limited Supply: There will only ever be 21 million Bitcoins. This scarcity is designed to make Bitcoin resistant to inflation. At the time of writing, approximately 19.72 million Bitcoins have been mined, leaving only approximately 1.28 million more to be created by the nodes. This scarcity is one of the main factors that has driven the value of Bitcoin over time. It is estimated that the last Bitcoin will be created around the year 2140.
- Transparency: All Bitcoin transactions are recorded on the blockchain, a public ledger that is accessible to everyone. This ensures transparency and trust in the system.
- Pseudonymity: Although Bitcoin transactions are public, the identity of users is not directly linked to their Bitcoin addresses. This ensures a certain level of privacy.

The technology behind Bitcoin: Blockchain!

At the core of Bitcoin is a technology called Blockchain. A blockchain is an online distributed ledger that records all transactions made with Bitcoin. You can think of it as a digital ledger that is automatically and continuously updated and shared by many computers around the world. This decentralized and transparent system is what makes Bitcoin so revolutionary. It eliminates trusted intermediaries (such as banks) and enables direct transactions between individuals anywhere in the world.

Check out our previously published article on "How does the Blockchain work with all its components!"

How to Own Bitcoin

Owning Bitcoin is easier than you think. Here’s how to get started:

1. Open a Bitcoin Wallet

A Bitcoin wallet is a digital tool that allows you to store, send, and receive Bitcoin. There are several types of wallets:
- Software Wallets: These are online apps or programs that you install on your phone or computer.
- Hardware Wallets: Physical devices or USB drives that store your Bitcoin offline and provide an extra layer of security.
- Paper Wallets: A physical or handwritten printout of your Bitcoin keys, often used for long-term storage.

Check out our previously published article on how to open a Bitcoin Software Wallet via Mercury Iconex.

2. Buy Bitcoin

There are several ways to buy Bitcoin:
- Cryptocurrency exchanges: These are online platforms where you can buy Bitcoin using traditional currencies (such as USD, EUR or SRD) or other cryptocurrencies. Popular exchanges include Coinbase, Binance, and Mercury Iconex.
- Peer-to-Peer (P2P) trading: You can buy Bitcoin directly from someone else via online platforms such as Mercury Iconex.

Check out our previously published article on how to buy cryptocurrencies like Bitcoin.
For your information and extensive support, you can also check out this article for more details.

3. Bitcoin Mining

Bitcoin mining involves using powerful computers to validate transactions on the Bitcoin network. In return, miners are rewarded with newly created bitcoins. However, Bitcoin mining requires a significant investment in hardware and electricity, so it is not always practical for beginners.

4. Earning Bitcoin

Some companies, online platforms/marketplaces, and services pay employees/users in Bitcoin for performing tasks or freelancing.

If you own Bitcoin or similar digital currencies, it is crucial to keep them safe. Use a software wallet like Mercury Iconex, or a hardware wallet like Ledger and Trezor to protect your valuable digital assets.

Check out our previous articles here to learn more about the various additional security measures you can take for your online activities with Bitcoin!

Bitcoin’s Impact on the Global Economy

Bitcoin is not just a digital currency; it is a movement that is challenging the traditional financial system. Here are some of the ways Bitcoin is significantly impacting the world:

Financial Inclusion
Bitcoin provides financial services to people who do not have access to traditional banking services. With just a smartphone and an internet connection, anyone can send, receive, and store Bitcoin and similar digital currencies.

Remittances / Transactions
Bitcoin is changing the money transfer chain by providing a cheaper and faster way to send money abroad. This is especially important in regions with high remittance fees and slow processing times.

Decentralized Finance (DeFi)
Bitcoin has inspired a new wave of decentralized finance (DeFi) applications. These are financial services built on blockchain technology without intermediaries, making finance more accessible and transparent.

Hedging against inflation
In countries with hyperinflation, Bitcoin is increasingly being used as a store of value. In fact, Bitcoin is becoming so popular that it has the potential to replace gold as a store of value. Its limited supply makes it inflation-resistant, unlike traditional currencies that can be printed indefinitely.

Changing Investment Strategies
Institutional investors are beginning to view Bitcoin as a legitimate asset class, leading to its integration into portfolios as a hedge against market volatility and currency devaluation.

The success of Bitcoin (BTC) inspired the creation of numerous other cryptocurrencies, also known as altcoins. These new digital currencies sought to improve upon Bitcoin or serve specific niches within the broader cryptocurrency ecosystem. In addition to cryptocurrencies, Bitcoin’s underlying technology has also enabled the creation of tokens. Unlike traditional cryptocurrencies, which serve as mediums of exchange, tokens can represent a variety of assets and utilities. For example:

Utility Tokens: These tokens give holders access to a product or service within a specific ecosystem. For example, Suredcu (SRDC) can be used to fund your Mercury Iconex account to purchase various cryptocurrencies or initiate fast and low-cost transactions on and off the Mercury Iconex exchange.

Security Tokens: These are digital representations of traditional financial assets such as stocks or bonds, regulated by securities laws.

Non-Fungible Tokens (NFTs): NFTs represent unique assets, such as digital art, music, or virtual real estate, and have created entirely new markets for digital ownership.

The ability to digitize and tokenize real and personal assets has profound implications. It enables fractional ownership of expensive objects, such as real estate, and allows artists and entrepreneurs to make their work, product, or service valuable in new ways, and launch into markets that were previously inaccessible through traditional means. The blockchain ecosystem, with its diverse array of cryptocurrencies and tokens, is rapidly transforming industries far beyond finance, including Art, Gaming, Supply Chain Management, and many more.

See here the full list of the most valuable cryptocurrencies and tokens you can own and trade on Mercury Iconex.

These and many other cryptocurrencies have flourished thanks to the foundation laid by Bitcoin. By proving that decentralized digital money could work, Bitcoin opened the floodgates for innovation across industries. So Bitcoin has not only changed the way we do business, but also how we think about value and trust. Bitcoin’s success has challenged traditional notions of money by demonstrating that value can be stored and transferred digitally in a sustainable and secure way, without the need for physical currency or a central authority.

Risks and Considerations: While Bitcoin offers many opportunities, it is essential to be aware of the risks such as volatility, regulatory uncertainty, and security risks.

Are you ready to dive deeper into the digital world of Bitcoin? Start by getting a free wallet at Mercury Iconex or explore our company website and stay up to date with the latest developments in the cryptocurrency industry, as it is the foundation of a New, Decentralized Digital Economic Order!
As we move further into the digital age, the innovations brought about by cryptocurrencies like Bitcoin will likely continue to influence how we think, act, and communicate for years to come.

Updated on: 14/12/2024