How Bitcoin Works

Bitcoins are a decentralized form of crypto currency. That is, they are not regulated by a financial institution or the government. As such, unlike a traditional bank account, you don’t need a long list of a document like an ID in order for you to establish a known bitcoin wallet. The bitcoin wallet is what you use to access your bitcoins and send bitcoins to other individuals.

How to Setup an Account

You can get a bitcoin wallet from a bitcoin broker like Coinbase. If you open a wallet through a certified broker, you are given a bitcoin address that is a series of numbers and letters, the same as an account number for a bank account and a private key which is a series of numbers and letters as well, which serves as your password.

How Bitcoin Works As An Anonymous Payment Process

You can do 3 things using bitcoins, you can buy, send money anonymously or use it as an investment. More and more merchants are accepting bitcoins as a method of payment. By using bitcoins instead of money, you are actually making that purchase anonymous. The same thing goes for sending money, based on the fact that you don’t have to submit a mountain of fees to build a bitcoin anonymously, you can actually send money to another anonymously.

How Bitcoin Works As An Investment

The price of a bitcoin fluctuates from time to time. Just to put things in perspective, back in the beginning of 2013, the average price of a bitcoin was approximately $ 400 per bitcoin, but by the end of 2013, the price of bitcoin had risen to over $ 1000. This means that if you had 2 bitcoins worth $ 800 at the beginning of 2013 and you kept it as an investment at the end of 2013 those two bitcoins would have cost more than $ 2000 instead of $ 800. Many people keep bitcoin due to the fact that its value fluctuates.

Bitcoin Casino and Poker Sites

Due to the anonymity of bitcoin the gambling industry has taken up bitcoin as a means of payment. Bitcoin casinos and bitcoin poker sites are live and offer their players to make deposits, play with bitcoin at the tables and withdraw directly from their bitcoin wallet. This means there is no tax or possibility of government control. Like a regular Nevada casino where you don’t have to register anywhere and all your transactions are anonymous.

How Do You Send Bitcoin

In order for you to pay for goods and services or send bitcoins to an individual, 3 things are required. Your bitcoin address, your private key and the individual’s bitcoin address. From that point, through your bitcoin wallet, you will enter 3 pieces of information, namely: input, balance and output. The input refers to your address, the balance refers to the amount of bitcoins you send and the output is the address of the recipient.