Just like in real life, your wallet needs to be secured. Bitcoin makes it possible to transfer value anywhere in a straightforward way and allows you to keep your money under control. Such great features also come with significant security risks. At the same time, when used correctly, Bitcoin can provide very high levels of security. Always remember that it is your responsibility to adopt good habits to protect your money. Read more about securing your wallet.
The price of Bitcoin is volatile
The price of bitcoins can suddenly rise or fall because the economy is so young, Bitcoin is so innovative, and the markets are sometimes not liquid enough. Therefore, it is not advisable to convert all your savings into bitcoins. Bitcoin should be considered a hazardous investment, and you should never invest money in Bitcoin that you cannot afford to lose. When you receive money in Bitcoin, you can immediately convert it into your currency at various services on the Internet.
Bitcoin payments are irreversible.
A Bitcoin transaction cannot be reversed, and it can only be refunded by the person receiving the money. This means making sure you do business with people and organizations you know and trust or who have an established reputation. In turn, companies must keep track of the payment requests they make to their customers. Bitcoin can detect typos and usually won’t let you accidentally send money to an invalid address, but it’s best to run checks for added security and redundancy. In the future, additional services may exist to provide more excellent choices and protection for businesses and consumers alike.
With the growing number of online transactions and the increasing distrust of banks after the financial crisis of 2008, the demand for a new digital payment method is increasing. This means of payment should be able to coexist alongside the existing financial system. The most important thing is that this new system has been set up in a decentralized way so that there is no single point of failure.
Bitcoin is the answer to the demand for a new digital payment method. Bitcoin is best seen as a digital form of cash: a way of exchanging value directly from person to person, without the involvement of a third party. We call this peer-to-peer.
Do you want to buy bitcoin, but you don’t know where yet? View the experiences with BTC . This way you know exactly what you can expect from our service.
The backbone of the Bitcoin network is formed by blockchain technology. A blockchain is a chronological chain of transaction data that cannot be modified afterwards. For Bitcoin, all transactions are bundled every ten minutes and put into a block. Such a block is then added to the chain, creating a chain of blocks: the blockchain.
A blockchain is, therefore, actually a kind of database. The power of the bitcoin blockchain is that it is decentralized. That means there are thousands of computers worldwide that keep a copy of the entire bitcoin transaction history. Based on this, these computers check whether new transactions are valid. In addition, it is virtually impossible to shut down the bitcoin network because you then have to destroy all those thousands of copies all over the world at the same time.
Such a computer that keeps track of and updates the entire transaction history is called a node. Has a node validated a transaction? Then the miners can get to work. The miners bundle the new transactions into a block and add them to the blockchain.
Miners are also computers, but not regular computers. They are often specifically designed to do nothing but mine bitcoins. They do this by solving a mathematical puzzle. Solving such a puzzle requires a lot of computing power from the computer, and they compete with other miners. Whoever solves the puzzle first can add their block to the blockchain and receive 12.5 new bitcoins as a reward!
How do you get bitcoins?
There are four ways to get bitcoins:
- By accepting bitcoins for the sale of services and goods
- By mining bitcoins
- By buying them
- By receiving bitcoin as salary
Accept Bitcoins for Goods
In principle, bitcoin is, of course, intended as a means of payment. Many companies accept bitcoins as a means of payment. Arnhem alone has more than 90 shops, restaurants and bars that accept bitcoins.
Important to know: the tax authorities do not yet accept bitcoins. As an entrepreneur, you still pay your VAT and other taxes in euros for the time being.
Itching ledger” is what we call mining. By this, we mean summarizing the transactions that take place within a specific time frame. Use the computing power of your computer to solve mathematical puzzles and thus secure the network. Approximately every 10 minutes, a new block is mined in which the latest transactions are included.
This block is then added to the blockchain. When that happens, the miner receives a reward of 12.5 new bitcoins. That reward halves every four years. This process continues until 21 million bitcoins have been created in this way in the year 2140.
A few years ago, you could successfully mine with your laptop, but you don’t have to try that anymore. Today’s miners are specially designed machines that often cost money and have enormous computing power.
You can exchange Bitcoins with someone without the intervention of a third party. And what if you want to exchange euros for bitcoins? Which can! If you know someone who has bitcoins and wants to sell them, buying them is still relatively simple, you give the euros, and the other person sends the bitcoins. But if you don’t know anyone who sells bitcoins, you can sign up with a broker like BTC Direct. On our platform, you can easily and quickly buy bitcoins via, for example, iDEAL.
Bitcoin as salary
Do you work as a freelancer or self-employed person? Then you can always ask your clients for a payment in cryptocurrency. Even if you are employed, you can be paid in bitcoin. Since June 2018, all BTC Direct employees receive a portion of their salary in bitcoin. Are you an employer, and are you interested in paying employees in bitcoin?