Everything you need to know about Bitcoin

Do you know what bitcoin is and how to buy it? Then ask yourself any questions you may have about this cryptocurrency and see if it's worth your while making this investment.

Have you heard a lot about bitcoins, cryptocurrencies and virtual money, but don't know what they are or how they work? 4KST has put together a guide so that you can clear up all your doubts and understand once and for all what it's all about and whether it's really safe to start investing in the currency of the future.

What is bitcoin?

Bitcoin, often described as a cryptocurrency, is a virtual or digital currency. It's like an online version of cash. You can use it to buy products and services, but not many stores accept Bitcoin yet and some countries have banned it completely.

However, some companies are beginning to accept its influence, which is only increasing. In October last year, for example, the online payment service PayPal announced that it would allow its customers to buy and sell bitcoin.

In Brazil, companies such as Tecnisa and Grupo Reserva already accept bitcoin as their currency. Some hotels and inns have also started doing business with the virtual currency. 

How does it work?

Each bitcoin is basically a computer file that is stored in a 'digital wallet' application on a smartphone or computer. People can send bitcoins (or part of one) to your digital wallet, and you can send bitcoins to other people. Each transaction is recorded on a public ledger called a blockchain.

This makes it possible to trace the history of bitcoins to prevent people from spending coins they don't have, making copies or undoing transactions.

New bitcoins are generated by a competitive and decentralized process called "mining". This process involves individuals being rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in return.

Why do people buy bitcoin?

There are basically three ways of obtaining bitcoins: buying them using real money, selling goods and receiving them in bitcoins or creating them on your computer.

For beginners, it is best to add a bank account, debit card or credit card to make your first bitcoin purchase on most exchanges. Adding a bank account is recommended for buying large amounts of bitcoin, as the transfer fees tend to be lower. Credit and debit cards are only recommended for smaller purchases, as they incur higher fees.

Some people like the fact that Bitcoin is not controlled by the government or banks. People can also spend their bitcoins anonymously. Although all transactions are recorded, no one would know which account number is yours unless you provide that information.

Public company MicroStrategy currently holds the most bitcoins on its balance sheet, followed by Tesla, Galaxy Digital Holdings, Voyager Digital, Square and Marathon Digital Holdings. MicroStrategy holds approximately 105,085 bitcoins, worth $3.6 billion based on the price on June 28, 2021. 

Is it safe to buy bitcoin?

Every transaction is publicly recorded, so it's very difficult to copy bitcoins, make fakes or spend those you don't have.

However, it is possible to lose your bitcoin wallet or delete your bitcoins and lose them forever. There have also been thefts from websites that allow you to store your bitcoins remotely.

The value of bitcoins has risen and fallen a lot over the years since they were created in 2009 and some people don't think it's safe to turn their 'real' money into bitcoin.

Keep following our blog and social networks to find out more about cryptocurrencies and other trends in the world of technology and finance.