Introduction to what is Bitcoin

Introduction

The business world continues to revolutionize with the implementations of strategies to ease ways of doing business. One major contributor to a business success is any revenue driver; cash sales of course will make sure the business is healthy and does not face cash flow challenges.

The introduction of mobile payment and other related point of sale which allow one to pay using either mobile money or a credit and debit card has almost made full embracement of cashless payment mode, at the supermarket I don’t need to have physical cash I can either pay for goods bought using mpesa or swipe my card.

However in the 21^st century digital currency is taking into shape and spreading over the world day in day out. Digital currency such as Bitcoins (Described below) have become so common especially in the Western countries , one can pay for and even receive bitcoins for exchange of a product or a service. The value for these digital currencies is very high, for instance one bitcoin is valued at approximately Ksh400000 and the price is still on the rise.

The cryptocurrency market has become an alternative to the stock market where traders use arbitrage theory to gain and make profit, simply buying bitcoins at lower price and selling at a higher price. This explains why the value has been on the rise, speculation by bulls and bears in the market.

Bellow I have summed up what you need to know about bitcoins as a newbie

What is bitcoins?

Bitcoin is a global cryptocurrency and digital payment system invented by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto. Bitcoin is currency just like the normal currency notes we use but it’s digital and not tangible. A cryptocurrency is a digital currency that’s encrypted to regulate the generation of extra units and verify the transfer of funds operating independently without control of a central bank as in the case of money. The medium of exchange uses cryptography to secure the transaction and to control the creation of additional units of the currency.

Bitcoin was invented in 2008when Satoshi Nakimoto published a research paper called Bitcoin: A peer-to-peer Electronic Cash System, The bitcoin was implemented and the open source code was released in January 2009 making it accessible. The bitcoin transactions occur in an open ledger; Blockchain which is a digital ledger in which transactions made in bitcoins or other currencies are recorded chronologically and publically where one can view them.

Bitcoin is not regulated like money flow which is regulated by the national central banks of various countries. To explain in in simple terms the transaction is direct without involving an intermediary, this is to address the challenge in sending money. Like if you wanted to send me money from a different location you have to use the bank or mobile money platform.

How it operates

The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.

Transactions are made with no middle men – meaning, no banks! There are no transaction fees or very negligible charges and no need to give your real name. Though each bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed – only their wallet IDs. While that keeps bitcoin users’ transactions private, it also lets them buy or sell anything without easily tracing it back to them. That’s why it has become the currency of choice for people online buying drugs or other illicit activities at its inception.

Is it used in the market to buy or pay for services?

Yes you can use bitcoins to pay for services, currently here in Kenya we are yet to see the implementation but you can use bitcoins for online purchases for goods on global eCommerce sites or for services such as webhosting.

You can also use bitcoins for investments, there are many investments programs you can invest with bitcoins.

Where do I get the Bitcoins?

To get the bitcoins you need first need to create a bitcoin wallet, this is like your bank account, its free to open one and all required is simple details such as those required to open an email: email, phone number and password.

You can create a wallet at Local Bitcoins here (Click it to open with browser), the reason why I recommend you open with Local Bitcoins is because you can also use it to sell and buy bitcoins.

At LocalBitcoins website you can sell your bitcoins or buy from there, it’s a website like OLX where only bitcoins trading is allowed. It has even locals in Kenya so don’t worry how to get the bitcoins, I have traded bitcoins on the site around 0.01BTC.

The future of bitcoins

The cryptocurrencies has boomed across western countries and also spilling over in Africa with countries such as Nigeria and South Africa being the leading users. This tells you should not ignore it, it’s going to be the next big thing in Kenya and before that you should give it a thought, use the links on this articles and thank me later.