Bitcoin enthusiasts including myself consider Bitcoin as the future of money. Non-Believers call it the biggest ponzi scheme out in the wild. Other might have mixed opinion on the same. It’s common to see people having at-least some or the other opinion about Bitcoin.
So let’s discuss some facts about Bitcoin and start with 5 basic questions which everyone starting out should know.
1. What are Bitcoins?
Bitcoins are purely decentralized digital pieces/coins which can be exchanged between two parties without the need of any bank or centralised authority. Unlike modern day fiat, Bitcoin can be termed as cash for the internet which isn’t controlled or manipulated by the Government. It’s a piece of computer code which anyone is free to check and it run’s on millions of computers called miners across the world.
The price of a single Bitcoin is decided by market forces. It’s pure demand and supply curve. There can only be 21 million Bitcoins to be ever created in this world and each day the locked supply keeps decreasing with each block mined. If demand is more than mined Bitcoins, the price will go up and if people loose faith on Bitcoin, it will collapse.
2. Are Bitcoins Anonymous?
To be honest, no. It’s pseudonymous. It’s true that your Bitcoin address isn’t linked to your bank account or PAN/Aadhar Cards but it’s very much traceable since all the transactions made by your wallet are visible on a public blockchain. This log isn’t stored in 1 computer but instead is stored across millions of them. This record makes it impossible to reverse transactions or modify the blockchain and also prevents double spending.
In India, if you are using an exchange, then you must have signed up by providing your Aadhar and PAN card and if the government asks the exchange to disclose your data then they are bound to do so.
3. How can I buy Bitcoins?
Bitcoins can be bought or exchanged for real money using an exchange or via peer-to-peer transaction. For the former, you will need to sign up on an Indian Exchange, (suggested WazirX) and complete your KYC after which you will be able to deposit money from your bank account into the exchange and start trading.
4. How to start using Bitcoin?
You don’t need to master the Bitcoin Whitepaper which was released by Satoshi. You can store your Bitcoins in a wallet which is provided by the exchange itself.
However, there are some third-party apps that can help you store your Bitcoins more efficiently and in a safer way but you will have to take care of your seed phrase. If you lose that then you will lose access to your Bitcoins forever.
5. How to pay someone with Bitcoin?
Well, that was actually the core utility of Bitcoin but in India using Bitcoin as a currency is illegal as of now and you can’t pay someone using it. However, if you are really want to pay someone in Bitcoin then there’s no one who can stop you from doing so in the country. Merchants like Tesla recently announced that they will accept Bitcoin to sell their cars.
Hence to sum it up, you have now read the basics of Bitcoin. I really hope that this article was helpful. Do subscribe to our weekly newsletter which you can find in the footer. Thanks for reading.