How Bitcoin Works

Bitcoins are a type of decentralized crypto-currency. In other terms, they are not governed by a finance agency or law. As such, unlike a traditional bank account, in order to establish what is regarded as a bitcoin wallet you don’t need a long list of a documentation such as an ID. The bitcoin wallet is what you’ll use to get access to your bitcoins and transfer bitcoins to other users. Get more information about Reasons Why Investing in Bitcoin is Still a Good Idea.

How To Setup An Account You can purchase a bitcoin wallet from a broker like Coinbase. Once you open a wallet through a licensed broker, you are issued a bitcoin address that is a series of numbers and letters, equivalent to a bank account number and a private key that is also a series of numbers and letters that act as your password.

How Does Bitcoin Work As An Anonymous Payment Processor You can do three things with Bitcoins, make a purchase, send money to someone anonymously or use it as an investment. More and more merchants have accepted bitcoins as payment method. You are essentially making the transaction secretly by using bitcoins rather than dollars. The same goes for sending money, based on the fact that you don’t have to submit a mountain of payment in order to anonymously establish a bitcoin, essentially you can anonymously send money to someone else.

How does Bitcoin work as an investment Occasionally, a bitcoin’s price fluctuates. Just to put things in perspective, back in early 2013 a bitcoin’s average price was about $400 per bitcoin, but by the end of 2013 bitcoin’s price rose to over $1000. This meant that if in early 2013 you had 2 bitcoins worth $800 and stored it as an investment by the end of 2013 those two bitcoins would have been worth more than $2000 instead of $800. Many people store bitcoins because it fluctuates in value.

Bitcoin Casino and Poker Sites Because of bitcoin’s anonymity the gambling industry has taken Bitcoin as a method of payment. Both Bitcoin casinos and Bitcoin poker sites are coming to life and offering deposits to their players, playing at the tables with Bitcoin and withdrawing directly to their Bitcoin wallet. This means there are no taxes or possibilities to control the government. Much like a regular casino in Nevada where you don’t have to register anywhere, and all your transactions are anonymous.

How do you send Bitcoin 3 things are needed in order for you to pay for goods and services or to send bitcoins to an individual. Your Bitcoin address, your private key and the Bitcoin address for the user. From that point on, you’ll put 3 pieces of information through your bitcoin wallet, which are: input, balance, and output. Input refers to your username, balance refers to the number of bitcoins that you will be submitting and output is the address of the receiver.