November 3

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What is Bitcoin? A Complete Beginner’s Guide

By Matt Finnigan

November 3, 2022

Bitcoin, Crypto, Cryptocurreny

Here at Pro X Trading, we like to keep things simple, and we have put together a complete beginner's guide to the world's most expensive crypto coin. Whatmore: we will do our level best to translate all the technical jargon into simple plain English, so you get a better understanding and why it's so popular with investors.

After reading this blog post, you should understand what is Bitcoin, how to buy and store digital currency, plus.......

Here’s a breakdown of what you’ll learn below:

  • Bitcoin's History
  • Bitcoin's Basic Features
  • How To Buy Bitcoin

Bitcoin's History

Inception: The collapse of the Lehman Brothers in 2008 was a major catalyst in the global financial crisis. The investment bank had been struggling for years, but its bankruptcy filing on September 15th, 2008 was the largest in U.S. history at that time. The failure of Lehman Brothers caused chaos in global markets and led to the downfall of other major banks, including Merrill Lynch, AIG, and Bear Stearns.

The stock market crash of 2008 was a result of the subprime mortgage crisis. The housing bubble burst and people began to default on their mortgages. This led to a decrease in the value of stocks, as investors became worried about the stability of banks and other financial institutions. As a result, the Dow Jones Industrial Average fell by more than 500 points on September 29, 2008.

On October 31st, 2008 a whitepaper was published by an unknown person or group of people under the name Satoshi Nakamoto outlining Bitcoin as a digital asset and a payment system.

A total of 21 million Bitcoins will be created, with 17 million currently in circulation. Bitcoin's finite supply is one of the features that has made it so popular among investors. Unlike traditional currencies, Bitcoin's supply is not controlled by a central bank and can't be manipulated to create inflation.

The Genesis Block: The first block to be mined on the Bitcoin blockchain was the Genesis Block. This block is also known as Block 0 or the Bitcoin Block. It was mined by Satoshi Nakamoto on January 03, 2009.

The Genesis Block contains a message from the creator of Bitcoin, which reads: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."

Early Years: The first bitcoin transaction took place on January 12th, 2009 when Nakamoto sent ten bitcoins to Hal Finney, an early Bitcoin enthusiast, and critic.

It's estimated that Nakamoto mined 1 million bitcoins during the first year of Bitcoin's existence.

In 2010, the first known business transaction utilizing bitcoin took place when programmer Laszlo Hanyecz purchased two Papa John's pizzas for 10,000 bitcoins

In 2011, bitcoin's popularity began to increase when the price reached $1.00 for the first time on February 9th. In June of that year, it hit $10 and then quickly rose to $30 representing a 100x in price from the start of the year when it traded at $0.30, it closed 2011 trading just under $5.00.

First Halving: The first halving of Bitcoin occurred on November 28th, 2012. The reward for mining a block was reduced from 50 Bitcoin to 25 Bitcoin. This event is referred to as the "halving" or "halvening".

Although Bitcoin broke through $1000 in early December 2013, it took three years for the price to return to $1000. At its bottom, the drawdown was -85%, and Bitcoin's value remained virtually flat for years. It finally reached $1000 in December 2016 after the second halving of block rewards to 12.50 from 25.

2017 was the year that Bitcoin become mainstream as prices soared from $1000 to a peak of over $19,000. The significant price appreciation during the year was aided in part by strong retail interest in cryptocurrency.

Today: In the first month of 2022, almost 26% had been wiped off the price from the opening show on January 1st and over 50% since the all-time high price of nearly $69,000.

The Future: We can see choppy waters ahead over the next couple of years for crypto and how that will affect Bitcoin we just don't know or would speculate on. The world has rapidly changed but we feel it's here to stay unless we get a black swan event like the Internet shutting down for a lengthy period.

Bitcoin’s Basic Features

Bitcoin often referred to as a cryptocurrency, a virtual currency, or a digital currency, is a purely electronic type of money.

It's sort of like real money, except that it's digital. You can use it to purchase items and services, however, the technology is not scalable, even though it was created to allow for digital, peer-to-peer transactions.

In October 2020, Paypal declared that it would start accepting cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, through its online payment

Decentralized: Bitcoin is decentralized because it's not regulated by a government or financial institution. Rather, it's maintained by a peer-to-peer network of users. This makes it immune to government interference or manipulation. While this is Bitcoin's key selling point, it also limits its scalability.

Blockchain: Each blockchain is formed over ten minutes. During this time, new Bitcoin blocks are created by miners. The Bitcoin network can only handle a limited number of transactions per second, estimated at around 7. In comparison, Visa can handle 150 million transactions a day, roughly around 1700 transactions per second.

Fixed supply: The Bitcoin protocol stipulates that the quantity will increase over time until it reaches exactly 21 million units. It's worth noting that, because of its finite quantity, there is only a certain amount of Bitcoin in circulation. Because this quantity is fixed and known in advance, Bitcoin is often compared to gold.

Currency: Bitcoin can be used as a currency to purchase items and services. However, its value is highly volatile, which means it can go up or down in price quite a bit. Bitcoin's volatility makes it a risky investment for some people.

Pseudonymity: Bitcoin users are assigned pseudonyms rather than their real names. This pseudonymity is one of Bitcoin's key features, as it allows users to maintain their privacy. However, Bitcoin's pseudonymous nature also makes it a target for criminals.

How Bitcoin works: miners are rewarded with Bitcoin for verifying and committing transactions to the blockchain. Bitcoin is created as a reward for a process known as mining. Miners are rewarded with Bitcoin for verifying and committing transactions to the blockchain. Bitcoin is created as a reward for a process known to be difficult and time-consuming.

Bitcoins are awarded to miners who verify and add transactions to the Bitcoin blockchain. The Bitcoin protocol dictates that the number of bitcoins awarded to miners will decrease over time until it reaches a total of 21 million.

Transparent: Bitcoin is transparent because all Bitcoin transactions are stored on a public ledger known as the blockchain. This makes it possible for anyone to view past and present Bitcoin transactions. While this transparency is a key attribute of Bitcoin, it also makes it vulnerable to hacks.

Volatile: Bitcoin's value is highly volatile, which means it can go up or down in price quite a bit. Bitcoin's volatility makes it a risky investment for some people.

No Gatekeepers: Bitcoin is not regulated by a government or financial institution. Rather, it's maintained by a peer-to-peer network of users. This makes it immune to government interference or manipulation.

21 million: The Bitcoin protocol stipulates that the quantity will increase over time until it reaches exactly 21 million units. It's worth noting that, because of its finite quantity, there is only a certain amount of Bitcoin in circulation. Because this quantity is fixed and known in advance, Bitcoin is often compared to gold.

Wallets: Bitcoin users need a Bitcoin wallet to store their bitcoins. Bitcoin wallets can be either software or hardware wallets. Software wallets are downloaded and installed on a computer or mobile device. Hardware wallets are physical devices that store Bitcoin keys.

Illegal activity: Bitcoin has been used to facilitate several illegal activities, such as online drug trafficking and money laundering. Because Bitcoin is pseudonymous, it's difficult to track down the perpetrators of these crimes.

How To Buy Bitcoin

Is Bitcoin Real Money?

Bitcoin is a type of digital currency that is created and held electronically. Bitcoin is different from traditional currency because it is not backed by any governments or physical assets. Bitcoin can be used to purchase goods and services online, and some businesses have started to accept Bitcoin as payment.

Some people believe that Bitcoin could eventually replace traditional currency, but there are still many questions about how Bitcoin will be regulated and whether it can truly be used as a global currency.

How to buy bitcoin online or in-person

There are three main ways to buy bitcoin online. The first way is through an online exchange, the second way is through a Bitcoin ATM, and the third way is through a Bitcoin broker.

The first way to buy bitcoin online is through an online exchange. An online exchange is a website where you can buy and sell Bitcoin. There are many different exchanges to choose from, but we recommend Coinbase or Gemini.

These exchanges allow you to buy Bitcoin with a credit card or bank account. They also allow you to sell Bitcoin for cash.

The second way to buy bitcoin online is through a Bitcoin ATM. A Bitcoin ATM is a machine that allows you to buy and sell Bitcoin. Bitcoin ATMs are located all over the world. You can find a Bitcoin ATM near you by visiting CoinATMRadar.com.

Bitcoin ATMs allow you to buy Bitcoin with cash. They also allow you to sell Bitcoin for cash.

The third way to buy bitcoin online is through a Bitcoin broker. A Bitcoin broker is a website where you can buy Bitcoin with a credit card or bank account. Bitcoin brokers are not as popular as exchanges and Bitcoin ATMs, but they are a good option if you can't find an exchange or Bitcoin ATM near you.

We recommend Coinmama or Bitpanda.

How to store your bitcoin in a wallet

Write a paragraph on what a wallet is and how it is used to store your bitcoin

A Bitcoin wallet is a software program that allows you to store, receive, and spend Bitcoin. There are many different types of Bitcoin wallets, but we will focus on the three most popular wallets: hot wallets, web wallets, and offline wallets.

Hot Wallets: A hot wallet is a Bitcoin wallet that is connected to the internet. Hot wallets are popular because they are easy to use and allow you to quickly access your Bitcoin. The downside of hot wallets is that they are vulnerable to hackers and can be stolen.

Web Wallets: A web wallet is a Bitcoin wallet that is hosted on the internet. Web wallets are popular because they are easy to use and allow you to quickly access your Bitcoin. The downside of web wallets is that they are vulnerable to hackers and can be stolen.

Offline Wallets: An offline wallet is a Bitcoin wallet that is not connected to the internet. Offline wallets are popular because they are safe from hackers. The downside of offline wallets is that they are difficult to use and can take longer to access your Bitcoin.

Which Bitcoin wallet should I use?: There is no one-size-fits-all answer to this question, but we recommend using a hot wallet if you are new to Bitcoin and want to start using it right away. If you are looking for a more secure option, we recommend using an offline wallet.

How to keep your bitcoins safe from theft or loss

Once you have bought Bitcoin, there are several things you can do to keep them safe from theft or loss. The most important thing is to create a Bitcoin wallet and backup your wallet's private key.

You can also keep your Bitcoin safe by encrypting your Bitcoin wallet with a strong password. You can also store your Bitcoin in a safe place, such as a bank safety deposit box or a fireproof safe.

You can also keep your Bitcoin safe by using a Bitcoin hardware wallet. Bitcoin hardware wallets are physical devices that allow you to store your Bitcoin offline. Bitcoin hardware wallets are popular because they are safe from hackers. The downside of Bitcoin hardware wallets is that they can be expensive.

Why do people buy Bitcoin?

People are investing in Bitcoin because it is a new form of investment that is not tied to the traditional financial system. Bitcoin is a digital currency that is created and stored on a peer-to-peer network. This means that Bitcoin is not controlled by any central authority and that makes its appeal exciting.

People are also investing in Bitcoin because it is a volatile asset. The value of Bitcoin has been known to fluctuate rapidly, which makes it a risky investment but also offers the potential for high returns.

People are also investing in Bitcoin because it is a new technology. Bitcoin is the first digital currency to use blockchain technology, which allows for secure and transparent transactions. Blockchain technology has the potential to revolutionize the way we do business.

People are also investing in Bitcoin because it is a digital asset. Bitcoin can be stored and used digitally, which makes it a convenient investment for people who want to invest in digital assets. Bitcoin is also easier to store and transport than traditional currencies.

In Summary

Bitcoin may not be the most stable currency in the world, but it is an innovative one. The cryptocurrency has come a long way in just over a decade and looks here to stay as a decentralized currency that offers more freedom than traditional currencies.

It’s becoming ever easier to invest in bitcoin with exchanges like Coinbase making crypto purchases easy for anyone at any stage of knowledge on investing. If you have been sitting on the sidelines wondering whether or not now is your time to buy some bitcoin, this might be just what was needed to convince you!

Matt Finnigan

About the author

A full time professional sports trader since 2002 and I expanded my investment portfolio during the 2020 pandemic to include crytpocurrency and forex trading when the sporting world ground to a halt.

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