Bitcoin is the most popular cryptocurrency in the crypto world and it’s a type of currency that is entirely computer-generated. It’s like the online version of cash. It’s a decentralized digital currency that uses peer-to-peer technology to facilitate instant payments. Bitcoin is not like traditional cash, so does Bitcoin has a physical appearance and what does a Bitcoin look like?
Unlike the traditional currency, Bitcoin doesn’t have a physical appearance. It’s a digital currency therefore it only has a logo and number that indicates how much Bitcoin you own. Basically, Bitcoin looks like numerous lines of codes, if and else statements, and conditional statements. You can think of Bitcoin just like the dollars in your online banking account.
What Is Bitcoin?
Bitcoin is the first digital currency that was released in 2009. Satoshi Nakamoto is the developer of Bitcoin. He has managed to create a decentralized system that doesn’t require a single administrator like the banks and governments. Instead, Bitcoin uses a peer-to-peer computer network to complete the transaction between two users. Traditional currency is regulated by the government that issues it. But, Bitcoin is controlled by a network of individuals and powered by peer-to-peer technology. So Bitcoin is a currency made of codes with an application programming interface (API), price index, and exchange rate.
What Does Bitcoin Look Like?
The traditional currency is emitted in the form of paper money and metal coins. But Bitcoin is completely different from traditional currency. It is a digital asset that looks like numerous lines of code. So, a Bitcoin wallet is an alphanumeric string and the transactions are an encrypted function of different parameters. It might sound complicated but it’s not. If you have $100 in your hands then you can realize its value but if you put the money in your debit/credit card then you possess the same amount of money but in digital formats. It’s just a number of codes on your plastic card and a banking account. The same process goes for Bitcoin but unlike fiat currency Bitcoin doesn’t have a physical appearance.
How Bitcoin Works?
The working process of Bitcoin is completely different from traditional currency. Bitcoin remains as computer files and stored in a digital wallet on a computer or smartphone. So if you want to use Bitcoin then you will need a Bitcoin address. You can easily get your Bitcoin address by installing a Bitcoin wallet on your computer or mobile phone. Once you install a Bitcoin wallet you will be able to generate your first Bitcoin address. Later, you can also be able to generate as many Bitcoin addresses as you want. Then you can use the Bitcoin addresses to receive and send Bitcoin across the world.
Bitcoin is powered by open-source code known as the blockchain. The Blockchain is a shared public ledger on which the entire Bitcoin network relies. It allows the Bitcoin wallets to calculate their spendable balance for the new transactions. Moreover, Blockchain also verifies the Bitcoin address to initiate the transaction. The integrity of blockchain is ensured with the help of cryptography. In Bitcoin, every transaction is a “block” that is “chained” to the code and then creates a permanent record for each transaction.
The transactions in Bitcoin are also known as mining. Mining is a process that includes the transaction in the Blockchain and confirms the transaction. The blocks are stored in chronological order to protect the transactions and let different computers agree on the state of the system. Thanks to these security measures blocks cannot be modified or all blocks would be invalid. Moreover, mining prevents users from adding new blocks to the blockchain. Therefore, now one can control Bitcoin and what’s included in the blockchain.
Where Can You Buy Bitcoin?
There are five ways you can buy Bitcoin. They are –
1. Cryptocurrency Exchanges: There are many Cryptocurrency exchanges available from where you can easily buy Bitcoin. It’s one of the most convenient ways to buy Bitcoin.
2. Investment Brokerages: There are many mainstream investment brokers available that offer Bitcoin and other cryptocurrencies. Some popular investment brokerages are Robinhood, Tradestation, eToro, and Sofi Active.
3. Bitcoin ATMs: You can also buy Bitcoin from the Bitcoin ATMs. There are about 7,000 Bitcoin ATMs available in the USA. So, locate the nearest Bitcoin ATM and buy Bitcoin.
4. Peer-To-Peer Purchases: You can also buy Bitcoin directly from other Bitcoin owners through peer-to-peer tools like Bisq, Bitquick, and LocalBitcoins.com. This is also a hassle-free way of buying Bitcoin.
5. Bitcoin Mining: Bitcoin allows you to collect your own Bitcoin by mining. But it requires technical skills and some investments.
8 Best Online Brokers To Buy Bitcoin
|Binance.US||Access to buy and sell more than 50 cryptocurrencies.||Low trading fees||Not available in seven U.S. states.|
Fewer crypto-to-crypto currency pairs
|Coinbase||Access to buy and sell more than 50 cryptocurrencies.||Low minimum to fund account cryptocurrency is well protected||Higher fees than other cryptocurrency exchanges|
|eToro||Access to buy and sell 18 cryptocurrencies.||Low minimum to fund an account social trading||Service only available in 41 U.S. states|
|Gemini||Access to buy and sell 40 cryptocurrencies.||Site insurance of digital assets against exchange hacks Available in all U.S. states||Higher fees than some other crypto exchanges|
|Robinhood||Access to buy and sell 7 cryptocurrencies.||No account minimumStreamlined interfaceCryptocurrency trading||No retirement accounts mutual funds or bondsLimited customer support|
|SoFi Active Investing||Access to buy and sell more than 20 cryptocurrencies.||Commission-free stock and ETF trade fractional shares available account minimum free financial counseling||Limited track record|
|TradeStation||Access to buy and sell 5 cryptocurrencies.||Advanced toolsActive trader community commission-free stock||No transaction-fee-free mutual funds plans and pricing can be confusing|
|Webull||Access to buy and sell 4 cryptocurrencies.||Low costsEasy-to-use platformAdvanced toolsAccess to cryptocurrency||No mutual fundsThin educational support|
Is Bitcoin Safe?
Bitcoin is safe to use because all transactions are recorded publicly so it is very difficult to copy Bitcoins. Therefore, no one can create and spend fake Bitcoins. Moreover, Bitcoin is a digital currency then no one will be able to steal Bitcoin from you. However, there are possibilities you might lose your Bitcoin wallet or delete your Bitcoins and lose them forever. The price of Bitcoin is also a concern because it is not stable and it can decrease quickly. So, if you are new in the crypto world then you should be cautious while investing in Bitcoin because the value of Bitcoin can drop significantly at any moment and you might lose lots of money.
FAQs About What Does A Bitcoin Look Like
1. How Can You Tell If A Bitcoin Is Real?
There is no way you can tell if a Bitcoin is real. The main reason is there is no fake Bitcoin available so there is no need to spot a fake Bitcoin. No one can manipulate the Blockchain to generate fake Bitcoin therefore it is completely safe to buy and sell Bitcoin.
2. Is Bitcoin An Actual Coin?
No, Bitcoin is not an actual coin. It is a decentralized digital currency that you can buy and sell directly online without an intermediary like a bank.
3. How Long Does It Take To Get 1 Bitcoin?
Currently, there is no way you can mine 1 Bitcoin. You can only my block and the reward of one block is 6.25 BTC. It might take up to 10 minutes to mine a block.
4. What Are The Disadvantages Of Bitcoin?
There are some disadvantages of Bitcoin, they are –
1. Black market activity
2. Price is not stable
3. Potential for large losses
4. Unregulated and unauthorized
5. Possibilities of cyber hacking
5. Can A Bitcoin Crash?
Yes, the price of Bitcoin can crash and reduce dramatically. In the past, there were many crashes in Bitcoin’s price, and on many occasions, Bitcoin has lost more than 80% of its value. But, Bitcoin was able to bounce back strongly to regain its lost value. So a crash in Bitcoin price is normal.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.