If you’re curious about Bitcoin and want to take control of your finance, you’ve come to the right place.
Bitcoin (BTC) is the world’s first decentralized digital currency, aka cryptocurrency. Unlike fiat currencies (INR, EUR, USD and so on), bitcoin and other cryptocurrencies don’t exist in a physical form. Instead, they exist in the digital world. The simplest definition of a bitcoin is: they are coins stored in bits.
Understanding bitcoin is an ideal gateway into the crypto world. So, I’ve divided the concepts around bitcoin into five distinct topics: how bitcoin works, how to mine bitcoin, what are bitcoin wallets, bitcoin price and legality of bitcoin. In each of these sections, I’ll discuss the topics in-depth and answer all the questions you have. This way, you’ll have a clear and thorough understanding of bitcoin.
In this guide, I’ll tell you all about how to buy bitcoin, where to buy them, and how to store bitcoin safely.
But first, let’s start with the basics: what is bitcoin, and what does it have to do with blockchain technology?
Let’s consider a more nuanced definition of bitcoin: “Bitcoin is a peer-to-peer virtual currency that uses blockchain technology to facilitate instant payments.”
To understand what a bitcoin is, we need to dissect the above description and examine the jargons.
As you might know, Satoshi Nakamoto introduced bitcoin and blockchain technology to the world in 2008 through their white paper, Bitcoin: A Peer-to-Peer Electronic Cash System. However, it was Stuart Haber and W. Scott Stornetta who invented the blockchain concept.
In 1991, Haber and Stornetta proposed a tamper-free protocol that timestamps the documents in their academic paper, How to Time-stamp a Digital Document. Their solution discussed the use of hash values, private key signatures to identify the signer and the data structure that links records by including hashes of the previous records’ certificates.
Satoshi improved on this concept (by solving the double-spending problem) to make blockchain a truly decentralized technology, which gave rise to bitcoin and a constellation of cryptocurrencies.
Bitcoin and blockchain technology—many people conflate these two terms due to their intertwined history. One is deemed as the currency of the internet, while the other is the technology that underpins it.
Blockchain technology is essentially a decentralized ledger that records all transactions across a peer-to-peer network. Bitcoin uses this technology to allow participants in the network to verify and confirm transactions (payments) without a central authority like a bank or government.
Aside from being the infrastructure of cryptocurrency applications, blockchain technology has a wide range of use cases. Yup, blockchain technology is cooler than you think! Some of its other applications include smart contracts, transparent records, supply chain management and proof of insurance, among many others.
If you’re intrigued about blockchain technology and want to know more about it, hop on to this page where I discuss the concept in detail—how blockchain technology works, its applications and other values of blockchain that’ll foster your curiosity!
BTC-INR is the most active trading cryptocurrency pair in India.
|Market Cap Rank||#1|
|Current Bitcoin Price||1 BTC in INR: ₹ 16,82,892
1 BTC in USD: $ 22,759
Here’s how Bitcoin fared against INR in the past four years.
|BTC price in INR (2017)||₹ 4,18,764 (September) | ₹ 9,03,603 (December)|
|BTC price in INR (2018)||₹ 6,77,943 (February) | ₹ 4,68,027 (September)|
|BTC price in INR (2019)||₹ 3,72,228 (March) | ₹ 5,85,926 (August)|
|BTC price in INR (2020)||₹ 6,20,669 (February) | ₹ 15,20,306 (December)|
Bitcoin often makes it in the news and social media platforms. It’s also become a topic of conversation for pretty much every tech-literate around the globe. Nevertheless, the question you should ask yourself is: what’s the incentive for you to buy a bitcoin?
Just because there’s a lot of buzz about bitcoin doesn’t mean you have to invest in it. But, there are five well-founded reasons why you should lay out your money on bitcoin.
Investing in bitcoin might be a bit confusing at the start, and sometimes may even seem scary. But once you understand the potential impact of Bitcoin, investing in it will be a no-brainer.
Before you buy bitcoin (or any cryptocurrency), you need to pick out your requirements. You can identify it by answering the following questions: where do you want to buy, and which payment method do you want to use.
You can buy bitcoins from cryptocurrency exchanges (ex: ZebPay), P2P platforms (ex: Local Bitcoins) or Bitcoin ATMs. The simplest and most secure option to purchase BTC in India is through cryptocurrency exchanges.
You can purchase bitcoins either with fiat currencies, such as INR or with other cryptocurrencies. In India, you can use traditional payment methods like bank transfer, net banking, instant deposits (NEFT/RTGS/IMPS) and UPI payments (Paytm, PhonePe, Tez, etc.) to deposit INR into your exchange wallet.
After you assess the marketplace and payment options, head over to one of the crypto exchange sites and follow these steps:
Once this is done, you’re all set to buy BTC!
With so many factors to evaluate, from security protocols to customer support experience, choosing a cryptocurrency exchange that’s right for you can be a bit overwhelming.
That’s why I designed a comprehensive research process to analyze and review every aspect of a cryptocurrency exchange.
Here’s my list of top bitcoin exchanges in India.
After you’ve purchased your bitcoin, you need a secure place to store them. While crypto exchanges let you store your coins in their platform, it’s not the safest option.
When it comes to managing your bitcoins, you have many options, each with their own strengths and weaknesses.
A wallet is a software application or a device that stores the private keys to your coins (and not the coins themselves). You should pick your wallet based on what you intend to do with your bitcoins.
If you store BTC on an exchange wallet, then the exchange holds the private keys on your behalf. Also, you don’t own the BTC on your exchange wallet; you own the rights to those BTC.
Exchange wallets are easy for trading. And because of their ease of set up, exchange wallets are an excellent option for beginners. Use an exchange wallet if you are looking to trade bitcoins frequently.
Private wallets give you full control over your private keys and your funds. You can either download a mobile wallet or a desktop wallet depending on where you want to store your private keys.
In general, mobile and desktop wallets are safer than exchange wallets. But, if you lose your private keys, you lose access to your funds. So it’s crucial to safeguard your device and back up your private keys.
Hardware wallets are electronic devices that store your private keys in a secure, USB-like device. Since these wallets are not connected to the internet, they offer higher levels of security against hackers.
Hardware wallets are considered to be the most secure alternatives to store your bitcoins.
Apart from purchasing bitcoins, you can also earn them by mining it. But, what exactly does mining bitcoin mean?
Mining bitcoin is painstaking. But the reason why people mine it is fairly simple. You set up a computer, solve a complex math problem and get rewarded 6.25 BTC (or a fraction of it, if you are in a mining pool). Who wouldn’t want that?
Bitcoin mining does three things: it issues new bitcoins, confirms transactions and secures the bitcoin blockchain. There is one block generated roughly every 10 minutes. That means there will be 144 blocks per day. So on average, around (144 x 6.25) 900 new bitcoins are mined each day.
Bitcoin mining has become a huge industry, where miners have specialized warehouses equipped with ASIC miners. So it’s unlikely that you’ll turn a profit with a little investment.
Nonetheless, learning how to mine helps you gain a better understanding of the bitcoin and crypto community.
To maximize the chance of solving the hash puzzle, you need to join a bitcoin mining pool. In a mining pool, a group of miners combine their computing power and split the mined bitcoin.
Here are three things you need to set up your mining rig:
When it comes to bitcoin mining, you either win a block reward (6.25 BTC or a fraction of it), or you get nothing. The easiest way to know if you can make a profit by mining bitcoin is by using a bitcoin mining calculator.
There are many ways you can cash out your bitcoins. But the quick and easy way to sell your bitcoins is through a cryptocurrency exchange.
Here are the steps you should follow:
|Knowledge Base||Bitcoin Website
Bitcoin White Paper
Bitcoin Source Code
|Community||Reddit, Telegram, Twitter, Facebook, BitcoinTalk|