Bitcoinsare a digital currency, which is introduced in 2009.Bitcoins is one of the digital currencies to use peer to peer technologies, to facilitate instant payments.It is a type of Cryptocurrency Exchange or virtual currency or digital currency. TheBitcoins is an online version of cash that is used purchase of various products in the shops. Every single transaction that is used to transfer from one to other person is recorded in the public list called “BlockChain”.
There are three main ways to create a Bitcoin:
1. Buy bitcoins using Real money (Cash)
2. Sell the products and gain some Bitcoins
3. Can be created by using the computer
Motto behind the invention of Bitcoins:
The Bitcoin developers want to put the seller in charge, eliminate the middle and the third parties, cancel the amount of interest that will be generated, to hack the corruption, to make the transactions transparent.A decentralized system is created to the record what is going on, with every transaction.It has its API (Application Programming Interface), Price Index, Exchange Rate.
How to Use Bitcoins?
1. First of all, when you use BTC (Bitcoins), the purchaser refers to your signature to verify you, the signature is a long line of security code that is encryption with 16 different symbols.
2. The purchaser decrypts using a smartphone, to get the user cryptocurrency.
3. As each transaction completes, each block enters the blockchain in modules called “blocks”.
4. Through this, users will be aware of each transaction, prevents stealing and double-spending.
5. The Bitcoins can be stored in the Bitcoin wallets.
There are 3 different ways to implement the Bitcoins wallets:
1. Full Client: In which the user, is a standalone email server, who accesses all the issues from the start of the transaction to the end. This is not recommended to the beginners.
2. Light Weight Client: The user is a standalone email server that connects to the mail server to access the mailbox. In this, the user can store the Bitcoins in their wallet, but they have to depend on the third party to complete their transaction.
3. Web Client: This is like web mail that, completely depends on the third party to complete their storage and the transaction.
How should users protect their Bitcoins?
Bitcoins can be well protected using the following steps regularly.
1. Backup the wallet and encrypt using a very strong password.
2. Store fee Bitcoins in offline, which are not connected to the internet.
3. Update the software regularly, to add extra security.
Risks in Using Bitcoins:
Although Bitcoins are highly secured, few risks are involved in investing the Bitcoins, include the Technological, Price variability, Consumer production, Theft, Virtual Currency Thefts, No guarantee of minimum profitability, break-even Investments.