Everything You Need to Know about Bitcoin - Complete Guide

The world is abuzz with the term Bitcoin and with a good reason — it has reached $4210 in value against the US dollar. You’ve probably read a dozen articles explaining Bitcoin and still couldn’t understand what it actually is. Let me be very frank — Understanding Bitcoin can be really challenging. So, I’m here to help. I’ll help you to understand Bitcoin in the simplest manner and answer most of the questions surrounding it. Let me do a quick breakdown how we’ll be learning about Bitcoin.

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Understand Bitcoin Better?

The Bitcoin network can be complicated to understand. But I do hope your hold on the Bitcoin system got a little firmer with this article. As it is such a vast topic, covering every aspect is pretty challenging. Thereby, I encourage you to shoot any doubts you have in the comments section below.

First, we’ll quickly go through fiat currency — a currency established as money by government law. A quick look through it will enable you to contrast it with the way Bitcoin works. We’ll also briefly see why exactly would you want to use Bitcoin over fiat currency. Next, we will advance to actually understand Bitcoin terminologies, followed by how a Bitcoin transaction takes place. In the last part, I’ll discuss why Bitcoin has value. Brace yourself. This is going to be a great, long read.

Traditional Fiat Currencies

As Wikipedia puts it, fiat currency is a currency established as money by Government law. The US dollar, Euro, Indian Rupee or very much any national currency would come under this category. In any country, the Government and the Bank are the controlling authorities of fiat currency. They control the currency production and make transactions on behalf of the user. The bank is responsible for maintaining the ledger.

A ledger is an account book, where the bank stores all the transaction history related to all of its users. So for example, I decide to write a cheque to you. The bank will transfer the money to your account and update the ledger to reflect my new total balance.

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Financial Censorship in Banks Accelerated Bitcoin’s Growth

Banks may have all sets of problems including currency exchange fees, lengthy delays or check bounceback. But more importantly, people are questioning the main theme — why should Governments and banks be allowed to execute total control over the currency?

While there’s no denying that banks are highly organised systems but resting all the power in a central authority poses a big risk to freedom.  For example, remember how Chase bank shut down bank accounts of some pornstars in Los Angeles in 2014 without even explaining them? Or how in 2011 the US Government partnered with many banks around the world to block donations to WikiLeaks — a whistleblower organisation that exposed Government corruptions. Wikileaks turned to accept donations via Bitcoin and has received more than 4000 BTC as of now. So what exactly is Bitcoin and why did WikiLeaks choose it?

What is Bitcoin?

Bitcoin is a decentralised, peer-to-peer virtual cryptocurrency that can be used to make payments over the Internet.

You’ve probably read this definition everywhere but still can’t get over the information overload, right? Let me simplify for you what it really means.

• Bitcoin is Decentralised and peer-to-peer currency

Bitcoin is not controlled by Governments, banks or any other central authority. It is controlled by people all over the world collectively. If you’re a part of the Bitcoin network, you are a part of the controlling authority.

You can pay anyone in the world without needing any third party like a bank to validate the transaction. Bitcoin transactions are carried out collectively by the network. This type of system where the transaction takes place directly between both the parties is known as a peer-to-peer network.

• Bitcoin Is a Virtual Cryptocurrency

Bitcoin is not an actual currency note/coin that you can hold in your hands. Rather, it is a virtual currency which comprises of two parts — a public key and a private key.

You display your public key so they know where to send you the money. A private key is, unsurprisingly, private. It is used to “sign” a transaction, so that other users over the network can verify the transaction has actually been performed by you. Anybody with access to your private keys can spend your Bitcoins. As there’s no central governing authority, keeping your private key a secret is of paramount importance.

Bitcoin is called a cryptocurrency because mathematical cryptographic techniques are used to generate and regulate Bitcoin. This will become more evident in the next section where we discuss how Bitcoin is generated.

• Blockchain is Bitcoin’s Public Ledger

When a transaction is made on the Bitcoin network, the change is reflected on a ledger. Unlike a bank’s ledger, which can be seen only by select bank officials, Bitcoin’s ledger is public and known as Blockchain. Transactions all over the world are recorded in a “block” and these blocks chained together are known as Blockchain. A new block is generated every 10 minutes, which is the reason why transactions over the Bitcoin network take 10 minutes to complete.

The Blockchain is at the heart of Bitcoin network, as it is responsible for protecting its integrity. For instance, what if somebody maliciously intends to tamper with the transaction data? Well, remember the private key? It is used to digitally “sign” each of your transactions, so as to ensure that the transaction was actually performed by you. If somebody still somehow happens to tamper the transaction data, it will be invalidated as other blocks over the network won’t agree with the tempered data. Are you starting to see the benefits of having a public ledger?

As Blockchain is public, anybody on the Bitcoin network can see transactions history and current balance associated with a public key. Of course, if somebody knows that a particular public key belongs to you, they can uniquely identify it as your account. In fact, you can head over to Blockchain’s website to see all the transactions that are taking place in real-time. Bitcoin wasn’t made to be an anonymous network, after all. As a result, certain other cryptocurrencies like “Dash” have emerged with the promise to add anonymity.

How is Bitcoin Generated?

The process of generating a Bitcoin is known as Bitcoin mining. Basically, miners are enforced with two different tasks:

The first one is solving complex mathematical functions with the use of powerful computer hardware and a mining client. These mathematical functions were put into place by the Bitcoin algorithm to control the supply of Bitcoins globally. For example, it’s a given that solving a particular problem takes a certain amount of time and appropriate computational resources. This ensures the control of generation of new Bitcoins. In fact, the algorithm was designed in such a way that a maximum of 21 million Bitcoins will be in circulation, ever.

Secondly, these miners are responsible for providing the computational resources for updating the public blockchain for all the users connected to the network. Everybody on the network holds a copy of this blockchain and can see previous transactions made by anybody around the world.

Miners are Rewarded with Bitcoins

In return for all the hard work, the miners are paid back in Bitcoins. When Bitcoin was first created, the reward was set at 50 Bitcoins per block mined. The reward halves every 4 years. There have been two halvings till the end of 2016. At the last update, which happened in 2016, the reward was reduced to 12.5 Bitcoins per block mined.

Can I Become a Miner?

Of course. Mining in the earlier days of Bitcoin was possible through your regular desktop GPUs. However, the competition has increased and the cryptographic solutions are becoming harder to solve. Today, mining with your desktop CPU/GPU is no longer profitable. There are a large number of ASICs built especially for mining purposes and you’d be required to purchase one of those.

You also need to consider the electricity consumption charges, as it’ll require being active all the time. Also, consider the cooling charges and space rental charges associated with it. Investing money in buying all the powerful stuff requires a lot of planning. That’s not to deter you from becoming a miner. With the appropriate hardware and a mining software, you’d be good to go.

How Does a Bitcoin Transaction Work?

Enough with the terminologies. Let’s see what happens when Ben decides to pay John via Bitcoins.

• First, Ben enters the amount to send and enters John’s public address. The public address is a sequence of randomly generated letters and numbers, which can be displayed publicly to receive money to your account. Meanwhile, Ben’s private key “signs” the transaction to verify that the transaction has actually been performed by him.
• Now, the transaction reaches the Bitcoin network. Here, the miners work to verify and add the transaction to a block, which can take up to 10 minutes.
• The amount gets deducted from Ben’s account and John receives the money. The transaction is now reflected on the Blockchain and is publicly visible to anyone over the network.

One important thing to understand is that a Bitcoin doesn’t actually point to anything — neither a digital nor a physical entity. Rather, there are only record of transactions all over the network.

Now that you’ve brushed up on the Bitcoin terminologies, I bet you still have a burning question unanswered —

What Gives Bitcoin Value?

Let me start with a simple question. What makes the paper in your pocket worth more than any other ordinary paper? It’s just another piece of paper, after all. The answer is, you guessed it, it’s backed by a Government mandate. The fiat currency gains its value from the fact that it’s enforced as legal tender by the Government.

Unlike fiat currencies, Bitcoin’s value does not come from any legal force, but from consensus. So why did people arrive at a consensus to accept Bitcoin as a payment method? Because Bitcoin solves all the issues plaguing the current centralised monetary system. For starters, here are some advantages of using Bitcoin:

• As there will be a maximum of 21 million Bitcoin in circulation, ever, it is not prone to inflation.
• It cannot be counterfeited because all the transactions are stored in a public ledger.
• It can be exchanged anywhere in the world instantly without the need of third-party institutions like banks.
• It has minuscule transaction fees associated with it, unlike the Western Union and similar services.

As more people are weighing Bitcoin’s advantages against traditional money, they are turning to Bitcoins. This results in increasing demand and hence ascends the value of Bitcoins. Furthermore, as the supply of Bitcoin is fixed, the demand will keep rising and so will Bitcoin’s prices. Of course, there are a lot more economical factors (beyond the scope of this article) that control the price of Bitcoin. We’ll rest the case in the hands of economists from here.

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What You Should Know Before Buying a Bitcoin?

We, at Beebom, are trying to jump on the Bitcoin bandwagon and have been covering it for a while now. Now that you understand what Bitcoin actually is, let’s go a step further. We are moving in the right direction but don’t buy a Bitcoin just yet. Bitcoin is a radically different payment system, so there are certain things you need to understand beforehand. Today, I’ll tell you 6 things you should know before buying a Bitcoin.

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Ready to Buy a Bitcoin?

We’ve only scratched the surface of what’s possible with Bitcoin. Bitcoin has a lot of potential applications that may find a way in the near future. Now that you’re equipped with the basics of the Bitcoin technology, you can proceed to buy Bitcoins. If you’ve purchased any Bitcoin in the past, you should definitely share your experience with other readers in the comments section below.

Note: All these points are made with reference to the Bitcoin technology. If you’re looking for economic advice on whether to buy Bitcoin, you are probably better off asking an investment consultant.

1. Bitcoin is Volatile

Bitcoin is in its nascent stage and there are a number of market factors that influence it. For starters, it depends on the classic supply-and-demand. The more the people are willing to buy Bitcoins, the more the Bitcoin value will increase. Conversely, if more people sell, the prices will dip. See this chart which shows the exchange rate of Bitcoin against the US Dollar, courtesy BitcoinCharts.com

As you can see, the value of Bitcoin fluctuates wildly with time. The unpredictability of Bitcoin’s value makes it an extremely risky investment. Bitcoin should not be seen as a quick-money scheme. Rather, you should research properly before making any investment in it. As a general advice, remember the golden rule of investing — Don’t invest more than you can afford to lose.

2. Learn About Security Before Buying Bitcoin

This may seem very obvious at first but is worthy of a mention given the number of people that choose to ignore it. Learning about security is of paramount importance before buying a Bitcoin. If you lose the Bitcoins in your Bitcoin wallet, they’re gone forever. As there’s no concerned governing authority, there’s absolutely no way to recover them.

Picture the scenario: You amass Bitcoins worth thousands of dollars over the years and one day, the online wallet you used to store them got hacked. Or if you have them stored locally on your computer, only to learn that your hard disk has failed. Things could go wrong in so many ways. Either way, your Bitcoins would be lost forever and cannot be recovered ever again.

Storing your money in online wallets should be avoided at any cost. Use a reputed mobile wallet service like CoinBase. Make sure to backup your wallet in case something goes wrong with your mobile device. An even better alternative could be to use a hardware wallet, which stores your private keys on a dedicated secure hardware device. This also ensures that your wallet is protected from malicious software that could try to steal it. The Ledger and TREZOR are some of the hottest hardware wallets available in the market as of now.

3. Bitcoin Transactions Cannot be Cancelled

Once you make a transaction over the Bitcoin network, it cannot be cancelled. Once the transaction is initiated and Bitcoins leave your wallet, the process cannot be cancelled. Therefore, it is extremely important that you double verify if the transaction you are about to make is the right one. If you happen to make an incorrect transaction, say to the wrong person or you input the wrong amount, your best bet would be to try and get in contact with the receiver and ask him for a return (which may or may not work depending on the situation).

4. Research Where Bitcoin is Accepted

Before buying a Bitcoin, it’s necessary to research where you can actually spend all of your Bitcoins. After all, what’s your Bitcoin’s worth if nobody accepts it as a payment system?

Among the large companies that accept payment through Bitcoin are Microsoft, Dell, WordPress, PayPal and many more. Look for “Bitcoin accepted” when making transactions at a local marketplace. If you’re not sure where to begin, start with CoinMap. It lists a crowd-sourced data of the local business places that accept Bitcoin all over the world. Over time, more and more business-place owners will turn to accept Bitcoin. If you are one of them, accepting Bitcoins is as easy as downloading a Bitcoin wallet and creating an account on it.

Of course, all this is only necessary if you’re looking to purchase something using your Bitcoins. If you’d rather use your Bitcoins as just an investment, you can easily exchange Bitcoins for fiat money like the US dollar using any of the exchange sites.

 5. Bitcoin is NOT Anonymous

The number one myth people hold about Bitcoin is that we can transfer the money anonymously. But in reality, the opposite is true. Your public address is visible to anyone over the world. In fact, every transaction you make and your account balance is visible at the Blockchain website. It carries your public address as an identifier, but it shouldn’t take much effort to trace the name linked to that public address.

The Blockchain being public is important to protect the integrity of the Bitcoin network. It prevents tampering of transaction data in the ledger. If you’re looking to perform transactions anonymously, you may want to check out Dashcoin or other Bitcoin alternatives.

6. Verify if Bitcoin is Legal in Your Country

Perhaps one of the most important steps is to verify if using Bitcoin is legal in your country. You certainly do not want to surround yourself with potential legal actions in the future. But why would any Government deem it as illegal?

As there’s no central governing authority of Bitcoin, some Governments condemn the use of Bitcoins. The more people start using Bitcoins, more the fiat currency get de-valued. Banking institutions could be rendered useless as the power gets transferred from the government back to the hands of the people. This is the reason why some governments strongly censure the use of Bitcoins.

Here are some of the countries that have embraced Bitcoin with open arms and have declared it perfectly legal —

Countries Where Bitcoin is Legal

Greenland
United States of America
Canada
Mexico
Columbia
Brazil
Argetina
France
Norway
Sweden
Finland
Estonia
Latvia
Lithuania
Belarus
Poland
Ukraine
Slovakia
Czech Republic
Denmark
Germany
Netherlands
Belgium
United Kingdom
Ireland
Austria
Switzerland
Italy
Slovania
Croatia
Spain
Portugal
Malta
Bulgaria
Turkey
Greece
Cyprus
Iran
Lebanon
Israel
South Africa
Iran
South Korea
Japan
Taiwan
Hong Kong
Phillippines
Malaysia
Indonesia
Singapore
Australia
New Zealand

If you cannot find your country in the above list, chances are that legality of Bitcoin could be fairly controversial or even unknown in your country.

Russia, Bolivia and Ecuador are the known countries that are hostile towards the Bitcoin approach.

In other countries like India, China and Kazakhstan, this is fairly controversial. While there have been raids on a few Bitcoin sellers, there isn’t any law as such which prevents using Bitcoin. Anyway, transactions through Bitcoin in such countries should be done at your own risk.

In the majority of Africa, Peru, Venezuela the status still remains unknown. BitLegal is a great resource to keep track of the legal status of Bitcoins around the globe.

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Do You Know Best Bitcoin Wallets for Every Platform?

The first step in getting started with Bitcoin is choosing a secure Bitcoin wallet. It contains the private and public address, which is used to gain access to your Bitcoins. Simply put, it is your go-to destination to store, receive and send Bitcoins. There are different types of Bitcoin wallets available, so choosing among them can be quite daunting. Before I tell you about the best Bitcoin wallets, here are some things to look for before considering a Bitcoin wallet:

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The Best Bitcoin Wallets You Can Use

As we’ve seen, there are different types of Bitcoin wallets – including software, hardware and web wallets but the aforementioned ones are definitely the best Bitcoin wallets you can use.

Well, I hope this list gives you a better idea what to look for in a Bitcoin wallet and assists you in choosing the right wallet. I’d love to know which wallet do you use to secure your Bitcoins. Tell me about it in the comments section below.

Bitcoin Wallet: What to Look For?

Amidst the growing number of Bitcoin wallets, how do you choose which wallet is best suitable for your needs? In this section, I attempt to trim down to the features you need to look for when selecting a Bitcoin wallet.

Company Reputation: This comes from common sense, but is worth reminding. Who is the company behind the app? How securely do they store the information on their servers? It takes a fair amount of time to build a reputation. Being an enthusiast, you might want to stay updated on the latest wallets, but when money is concerned, you might want to stick with reputed companies.

Open Source/Security: Open source wallets are definitely a plus because it allows any developer to review the code and verify the security infrastructure of the wallet. This can be particularly beneficial for new wallet entrants, as it gives them a solid base to
build a reputation. Also, favour the wallets that store private keys offline rather than their servers.

Privacy: The Bitcoin network is actually pseudonymous. Anybody can see the transaction history and the account balance linked to your public address. So, If you’re really paranoid about security, look for wallets that support the TOR network.

MultiSig account: It is a new feature wherein multiple private keys can be set-up for a single Bitcoin address. This enables users to set-up a shared account that needs private keys from multiple people to confirm a transaction. This adds an extra layer of security for corporate/family-sharing accounts.

Backup features: The wallet should provide a good backup mechanism, which ensures that you do not lose access to your Bitcoin account even if your device is damaged/stolen.
Platform Availability: Given the myriad of computing devices available today, it’s necessary to ensure that your wallet of choice is available on your platform. If you are ready to compromise on security for accessibility, you may use a web-based Bitcoin wallet 
portal. Also, make sure that it is compatible with the hardware wallet you are planning to use.

Now that you know what to look for, let’s check out the best Bitcoin wallets for every platform:

1. Copay

Copay is brought to you by the good folks over at BitPay. BitPay is a reputed Bitcoin service and takes pride in its security infrastructure. Copay is a multisig wallet, which means you can set-up a shared account that needs private keys from multiple people to confirm a transaction. It is open source, which means that any developer can audit the code and vouch for its security features. The private key is stored on the client side, which further enhances security. It also allows you to set-up a 12-word mnemonic, which 
should be recorded to backup the Copay wallet.

To make it more interesting, Copay is the only major Bitcoin wallet which is available on all computing platforms – Android, Windows Phone, iOS, Windows, macOS, Linux and heck, even a Chrome extension. Overall, Copay is an extremely secure Bitcoin wallet available on any computing platform you can imagine.

Website: http://copay.io/

2. Mycelium

Dubbing itself as the “Default Bitcoin wallet”, Mycelium is a semi-open-source Bitcoin wallet. Its code is open to everyone for review, but you cannot modify or redistribute it. It does not support multisig accounts, but the developers say it’s on the roadmap. The 
data sent over the network is encrypted to offer the strongest level of security. For enhanced privacy, it also allows you to connect to the TOR network. It also allows you to backup your account and even PIN protect the wallet on your mobile.

Mycelium wallet also doubles as a local trading platform to assist you in exchanging/trading Bitcoins locally. Local trader servers help arrange the trade between buyers and sellers and manage the transaction.

Mycelium wallet is available on Android and iOS only for now. If you’re looking for a desktop client, you have to give it a pass.

Website: https://wallet.mycelium.com/contact.html

3. Armory

Armory is one of the most reputed and secure Bitcoin wallets available in the market right now. It is complete with all the features you can think of – it is open source, includes 
multisig support, and it can make transactions using the TOR network. It also offers a rock-solid encryption and backup mechanism.

Perhaps the eyeball-grabbing feature, which makes Armory most secure is the storage of private keys on an offline computer. Keeping the private key on a cold storage wallet ensures that no hacker is able to access or steal them.

Armory is aimed towards more advanced users and novice users may find it a little difficult when first setting it up. Also, it is a desktop client, available for Windows, macOS, Ubuntu and Raspberry Pi. If you’re on one of the above platforms and are willing to invest some time in setting it up, Armory is the single best Bitcoin wallet you should download, hands down.

Website: https://www.bitcoinarmory.com/

4. AirBitz

AirBitz is a mobile-focused Bitcoin wallet client that is often touted as highly secure. In addition to being open-source, it covers all the basic features like back-ups and client-side encryption. It also has an integrated way to buy/sell Bitcoins and it has a Bitcoin business directory, which lists the merchants which accept Bitcoin. These couple of additions add a little more polish to an already great wallet.

That being said, there are a couple of downsides. First, it doesn’t support TOR network. 

Secondly, it doesn’t have multisig support currently. The developers claim to be working on it, but don’t have a release date as of yet. Overall, AirBitz is a user-friendly and featured-pack wallet which is available for Android and iOS.

Website: https://airbitz.co/bitcoin-wallet/

5. Breadwallet

The Breadwallet is a stand-alone client, which connects you directly to the Bitcoin network. Your Bitcoins remain safe, as there are no additional servers to get hacked or go down. The open source nature of Breadwallet allows anybody to review the code and verify the security model of the wallet. It also provides a convenient way to backup your wallet in case of device damage/theft.

Lack of multisig means that you cannot share an account with multiple people. Also, it doesn’t support connections via the TOR network. If you are looking for a basic wallet and can do without this couple of features you should give Breadwallet a try.

While Breadwallet is available for Android and iOS, it is a particularly more loved and a darling within the iOS community.

Website: https://breadwallet.com/

6. MultiBit

MultiBit HD is the brainchild of KeepKey, a company that manufactures a hardware Bitcoin wallet by the same name. It is a lightweight desktop client which, like Breadwallet, connects directly to the Bitcoin network. This open-source client allows you to backup your wallets using a passphrase, so you can restore your private keys using the backup phrase. It lets you set-up and use Tor as a proxy to prevent attackers from associating your payments with your IP address.

MultiBit doesn’t support multisig as of writing. If you’re looking for something lightweight, easy to set-up and use and can do with the lack of multisig support, it is worth checking out. It is available for Windows, macOS and Linux.

Website: https://multibit.org/

7. Electrum

Electrum is an extremely fast and lightweight Bitcoin wallet. It uses minimal computing resources, so it is a perfect match for older hardware. Electrum proves that being less resource-intensive doesn’t mean having to cut down on features. This open-source wallet comes with multisig support, integration with major hardware wallets and allows you to use TOR network which helps you in maintaining a certain amount of anonymity.

Like Armory, it allows you to keep your private keys on an offline storage to protect them from hackers. With such vast set of features, there’s nothing not to like about Electron. It can be put in the same league as of Armory. Electrum is available for Windows, macOS, 
Linux and Android. Surprisingly, iOS version has been in the making for over a year and still there isn’t any sign of it. If you aren’t bound by Apple’s mobile platform, you should download Electrum right away.

Website: https://electrum.org/#home

8. Blockchain.info

Blockchain.info is famous for their Blockchain explorer service, but it also offers a wallet service. If convenience is the only factor you are looking for in wallets, this online wallet would be a great fit for you. You can connect to the TOR network for added anonymity.

Besides these two factors, there’s really not much to dig into online wallets. Your private keys are stored on third-party servers and you are required to trust them. Also, it doesn’t connect directly to the Bitcoin network. So, if Blockchain servers are down, there is no way you can access your Bitcoins. Online web wallets should be used only as a “pocket-money” to spend on transactions. Never store a large number of Bitcoins on any online wallet. If you decide to use Blockchain.info anyway, at least use their desktop or mobile applications. It is available for Windows, macOS, Android and iOS.

Website: https://blockchain.info/wallet

9. Coinbase

Coinbase is one of the most popular Bitcoin exchange services used globally. They also provide a mobile and a web wallet. Coinbase gives you a little more flexibility than Bitcoin.info, as it allows users to manage their own private keys. It also supports
multisig wallets wherein, up to 5 users can own a shared wallet.

Other than that, the major downside is that it is primarily a web-based wallet. It relies on a centralised service by default. If all you need is convenience while making transactions, then Coinbase is definitely a good choice. Again, I wouldn’t recommend using 
any web based wallet for storing a large amount of a Bitcoins. Use any desktop/mobile alternative whenever possible. Coinbase is also available for Android and iOS.

Website: https://coinbase.com/mobile

10. Ledger Wallet

Ledger is French start-up specializing in building hardware wallets for cryptocurrencies. It manufacturers various wallets like the Ledger Nano, Nano S and Ledger Blue. These wallets connect to your computer via USB and help in validating transactions when coupled with a software wallet. Specifications change with various models, but security remains at the heart of a Ledger wallet.

Ledger, being a hardware wallet, gives you full control over your Bitcoins. You are responsible for managing and backing up your private keys. This eliminates the need of trusting third-party websites with your Bitcoins. Also, as your keys are stored on a 
specialized hardware device, it provides protection against computer vulnerabilities.

The Ledger Nano ($31) is a small USB-shaped hardware wallet with emphasis on security. If you are looking to spend a little more, the Nano S ($62) adds the convenience of a touch-screen to breeze through your transactions. They also provide worldwide shipping. When it comes to security, you cannot go wrong with either of these.

Website: http://ledgerwallet.com/products

11. Trezor Wallet

Trezor was one of the earliest pioneers of the hardware wallets. SatoshiLabs, a Europian start-up, is the brainchild behind the Trezor wallet. It connects to your computer via USB and features an OLED display.

Of course, it provides all the security features like full control over your Bitcoins and protection against malicious computer software. As your Bitcoins are stored offline on this specialized device, they are safe from hackers. Trezor wallet pairs with a large
number of software wallets. When you need to send Bitcoins from any of these software wallets, just confirm the message which appears on Trezor’s OLED display. Confirming transactions couldn’t get any easier.

Trezor is available in 3 colours – white, grey, black and is available at $99 from the Trezor website.

Website: http://bitcointrezor.com/

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Do You Know What is Bitcoin Cash and How Does it Differ From Bitcoin?

Bitcoin has been the preeminent cryptocurrency for the better part of the past decade. It has withstood many an attack from several quarters, but has only gone from strength to strength in recent times. However, disagreements about how to operate it has now taken its toll on the digital currency, which has now split into two – Bitcoin and Bitcoin Cash. So what is Bitcoin Cash and how does it differ from the original Bitcoin?

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What is Bitcoin Cash?
As alluded to at the very start, Bitcoin has had to persevere in the face of relentless attacks ever since its inception. From law enforcement authorities who’ve described it as a security threat, to disgruntled miners who’ve tried to fork it from time to time, Bitcoin has seen it all in its small lifetime. This time, however, the attempt to create an alternative version of Bitcoin has proved successful, with ViaBTC miners and their supporters creating a permanent divergence in the original Bitcoin blockchain by successfully generating a block on a new blockchain called Bitcoin Cash, that, its supporters claim, will go a long way towards solving the growing problem of transaction congestion on the Bitcoin platform.

Just like its parent, Bitcoin Cash is also a “decentralized, peer-to-peer digital currency” that can be used for financial transactions on the internet, provided, your merchant accepts it as a means of payment. Whether or not Bitcoin Cash is successful in its stated endeavor remains to be seen, but most digital wallet platforms and cryptocurrency exchanges have declared that they won’t support the new digital currency, so it is already off to a bit of a rough start.

The Backstory Behind the Bitcoin Split

So, why did things come to such a pass that so many miners felt that they had to break away from the parent currency to get their voices heard? To understand what led to the acrimonious fallout between the miners leading to this fork, we’ll need to know how Bitcoin functioned up until now. The Bitcoin infrastructure can only process up to 1MB of data every minute, which equates to about 6 total transactions per second. Compare that to leading global payments gateway, VISA, which can process upwards of 1,600 transactions every second, and you’ll realize why many Bitcoin miners had been demanding that Bitcoin raise its arbitrarily-imposed 1MB limit that slow down transactions, create artificial bottlenecks and, increased average fee costs.

They even cited Bitcoin creator Satoshi Nakamoto’s 2009 assertion that the currency should aim to scale larger than VISA, which, at that stage, was apparently processing around 15 million transactions on the internet daily. That being the case, “Restoring Bitcoin’s original vision and values” is one of the key motivations behind the renegade miners’ decision to split ways with Bitcoin. The vast majority of core developers behind the Bitcoin platform, however, wanted to keep the restriction in place, arguing that it is a way to safeguard against hackers. This led to the emergence of the two power-centers within the Bitcoin world, neither of which were convinced with the other side’s argument. While the differences between the two rival factions seemed irreconcilable in recent times, efforts were, nonetheless, made by various quarters to keep the flock together.

The most notable attempt to work out a compromise between the two warring factions is a scaling proposal named SegWit2x that has since been implemented by Bitcoin, although, only partially, but more on that later. Backed by large sections of the Bitcoin network’s enterprises and miners, SegWit2x promises to increase the speed of Bitcoin transactions “by bringing code optimization Segrated Witness (SegWit) to change the way data is stored on the Bitcoin network”. The proposal also includes the provision to increase each block size to 2MB, which is where the ‘2x’ bit comes from. While the new provisions came into effect on August 1st, the increase in block size is only expected to happen three months from now.

How Does Bitcoin Cash Differ From The Original Bitcoin?

As mentioned in the previous segment, compared to Bitcoin where block sizes are restricted to just the 1MB, each block on the Bitcoin Cash blockchain can have up to 8MB of data. The very first block was mined by a Beijing-based group called ViaBTC on August 1st and, contained 6,985 transactions with a total block size of 1.915MB, which is nearly double the limit imposed by the original Bitcoin chain. The new cryptocurrency also promises to provide replay and wipeout protection. Bitcoin Cash is also introducing a new way of signing transactions that allows input-value signing that not only improves hardware wallet security, but also eliminates the quadratic hashing problem that stems from a fundamental design flaw in Transactions v1, as Satoshi created it.

Are My Bitcoins Safe? What This Split Means For Bitcoin Users?

So how does the split affect you as a Bitcoin owner? First off, yes, your Bitcoins are safe and just as usable as they were before the split. In fact, with the fork going through, you actually own both versions of the currency without so much as moving a finger. Now, what you can do with all that money depends almost entirely on whether you actually control your private keys or not. If you do, you can safely use those keys to spend your Bitcoin Cash any which way you want. However, if you own Bitcoin but not the digital keys, you’ll need to store your Bitcoins in a platform that actually supports the brand new currency.

Sadly for Bitcoin Cash proponents, the most popular cryptocurrency exchange in the world, Coinbase, has already issued a statement, saying that it won’t support Bitcoin Cash any time soon. The decision, however, can change in the future, in which case, the company will “distribute Bitcoin Cash to customers associated with Bitcoin balances at the time of the fork”. If you’re in India and use Zebpay, I’m afraid the news isn’t that good for you either, seeing as the e-wallet has also refused to support Bitcoin Cash, at least, in the near term.

What to Expect Next?

Some experts believe that the split will adversely affect Bitcoin’s efforts to widen its adoption. In the short to medium term, industry-watchers say that the situation may create confusion among a section of users and scare away would-be adopters, while price volatility may also become relatively more common going forward. The overall market-cap of Bitcoin, however, may not necessarily be impacted too much by these events, if a statement issued by Dominic Williams, the President of blockchain computing firm DFINITY, is anything to go by.

Bitcoin was trading at just over the $2,700 mark on Wednesday, while Bitcoin Cash initially saw a 48% increase in its net value to $422 on Tuesday, before dropping down 26% to stabilize around the $214 mark by the end of the day.

Bitcoin Cash vs Bitcoin: Is There a Winner Here?

Neither side has actually conclusively won or lost the first round. While Bitcoin continues to be supported by just about all of the major exchanges and wallets, Bitcoin Cash has managed to hold its own, at least, in terms of its dollar value. It’s difficult to say with any degree of certainly what the future holds for either of them, but as things stand now, their future largely depends on how much support they get from the exchanges, merchants and miners, all of whom will collectively decide who comes out on top when the dust settles on one of the most grueling and bitter battles in the intriguing and often controversial world of cryptocurrency.

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Do You Know Best Bitcoin Alternative Crypto currencies?

The Best Bitcoin Alternatives You Can Use

Bitcoin maybe the first name that comes to your mind when thinking of cryptocurrencies, but it certainly isn’t the only option you have today. There are literally hundreds of “alt coins” available out there, although, some, like the ones mentioned above, are much better bets than others in terms of security, efficacy and anonymity. So now that you know about some of the Bitcoin alternatives available on the internet, which one do you think will be a god fit for you? Or do you see yourself sticking with Bitcoin for the time being? Or do you already use a different cryptocurrency that we overlooked for out list today? Do leave your thoughts in the comment section below, because we love hearing from you.

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Bitcoin may be the world’s best-known and most-used cryptocurrency, but it has been under intense pressure of late, having forked once already just a few short weeks earlier. As expected, the currency lost quite a bit of market-cap after the fork, but more trouble may well be on the horizon for the world’s most popular cryptocurrency. According to recent reports, not only is the Bitcoin blockchain likely to see a further fork going forward, some researchers are now also claiming that Bitcoin transactions may not actually be as anonymous as many believe them to be. While it’s unlikely that any of the controversies will actually undermine Bitcoin’s standing as the world’s preeminent cryptocurrency, many are wondering if they can switch to other options for their online payments in order to maintain their privacy. That being the case, here are the best Bitcoin alternative cryptocurrencies you can use:

The Best Bitcoin Alternatives Out There

1. Ethereum (ETH)

Like Bitcoin, Ethereum is an open-source, decentralized blockchain-based computing platform that is known mostly for its own cryptocurrency token called ‘Ether’. The platform enables users to create a tradeable digital token that can be used as a currency, or even a central bank that can actually issue currency. It also enables developers to build and run smart contracts and distributed applications without any outside interference. Ethereum went live only a couple years ago, but within a year of becoming operational, was hard-forked into two blockchains after the infamous attack on the DAO project, resulting in the creation of Ethereum (ETH) and Etherium Classic (ETC). With most of the original Etherium backers, including founders Vitalik Buterin and Gavin Wood, moving onto the new Ethereum (ETH) blockchain, it currently has a market-cap of over $31 billion, second only to the mighty Bitcoin, making it a leading Bitcoin alternative.

Earlier this year, the Ethereum project announced the establishment of the Enterprise Ethereum Alliance, whereby some of biggest names from the finance and tech industries, like JPMorgan Chase, Bank of New York, Mellon Corporation, Microsoft, ING, UBS, British Petroleum, Santander, Credit Suisse and Wipro, joined hands with the organization to “build and to promote the best practices and standards that facilitate adoption of the Ethereum protocol for enterprises”. Like Bitcoin, Ethereum is also a viable option for IRA investments, as investors can now hold Ethereum in retirement accounts as traditional IRAs, Roth IRAs, 401Ks and SEP IRAs.

Website: https://www.ethereum.org/

2. Litecoin (LTC)

Litecoin is a decentralized peer-to-peer cryptocurrency that’s powered by open source software released under the MIT/X11 license in October, 2011 by former Googler, Charles Lee. It was originally inspired by Bitcoin and, has quite a few similarities with the world’s most popular cryptocurrency, but the adoption of Segregated Witness and Lightning Network has allowed Litecoin to reduce block generation times to about 2.5 minutes (compared to Bitcoin’s 10 Minutes), thereby reducing bottlenecks and facilitating payments about four times faster than Bitcoin. One of the best features about Litecoin is Wallet encryption, which allows users to secure their wallets in a way that allows them to view their account balance and prior transactions, but are required to enter a passcode to be able to actually spend their money.

Litecoin is one of the largest and most popular Bitcoin alternatives right now, given that the currency currently has a market-cap of over $2.5 billion, with its valuation hovering around the $50 mark. Like Bitcoins, users can also ‘mine’ Litecoins at home, with each block worth as many as 25 Litecoins currently, although, that number gets reduced 50% every four years. Overall, the Litecoin network is expected to produce around 84 million Litecoins, which is four times as many as that of Bitcoin. Litecoin was also the first cryptocurrency to implement the Scrypt algorithm in an attempt to end the prevalence of GPU-based mining, and although that didn’t quite happen, Scrypt-based currencies like Litecoin and Dogecoin still offer the advantage of possibly increasing the dividends and computational efficiency of mining them.

Website: https://litecoin.org/

3. Dogecoin (Doge)

Dogecoin probably has the most interesting backstory of all cryptocurrencies combined. Back in December 2013, the currency was introduced as a bit of a joke by combining Bitcoin with a viral internet meme called ‘Doge’, which featured the picture of a Shiba Inu accompanied by a multicolored text in broken English, written in Comic Sans font. Like Litecoin and unlike Bitcoin, Dogecoin also uses Scrypt instead of the more traditional SHA-256 algorithm, potentially allowing “merged mining” with other compatible currencies. While some SHA-256 currencies also allow the practice, it’s relatively much less common.

Even though it started off as a joke, Dogecoin is today valued at over $197 million, and is accepted by over 200 merchants worldwide. However, with well over 110 billion coins mined already, and 5 billion more to come every year from now, the value of each individual Dogecoin is a fraction of many of its peers, hovering at around a fifth of an U.S. cent. While that is significantly lower than many of its larger and more established peers like Bitcoin and Ethereum, the platform’s already got a dedicated following, whose main objective it is to ensure that it remains a medium of exchange for the long term rather than a short-term investment.

Website: http://dogecoin.com/

4. Faircoin (FAIR)

Faircoin is part of the grand socially-conscious vision of a Spain-based co-operative organization called the Catalan Integral Cooperative, or the CIC. It uses the blockchain technology of Bitcoin, but with a more socially-constructive design. Unlike other cryptocurrencies on the list, Faircoin relies on neither mining or minting new coins, as they are “both competitive systems”, instead using certified validation nodes, or CDNs, to perform block generation in more ecologically responsible, equitable ways that “facilitates the development and expansion of a new postcapitalist economic system based on collaboration”. Instead of proof-of-stake or proof-of-work, Faircoin uses what it calls ‘proof-of-cooperation’ to verify all generated coins.

The FairCoop project aims for the cryptocurrency to live up to its name by being fair the planet as a whole, by reducing energy consumption. The Faircoin market-cap currently stands at $32 million, while each Faircoin is valued at about 61 cents. Overall, Faircoin is still an ideology-based experiment for the most part, but if you believe that excesses of modern capitalism needs to tackled head-on for the sake of our future generations, projects like FairCoop, and by extension, the Faircoin cryptocurrency, definitely need to be supported.

Website: https://fair.coop/faircoin/

5. Dash (DASH)

Formerly known as XCoin and Darkcoin, Dash, a portmanteau of the words ‘Digital’ and ‘Cash’,  is an open source, peer-to-peer cryptocurrency, much like Bitcoin. However, it promises quite a few improvements over Bitcoin with features such as ‘InstantSend’ and ‘PrivateSend’. According to the developers behind Dash, the former enables users to complete financial transactions almost instantaneously without relying on a centralized authority. As for ‘PrivateSend’, it protects the privacy of users by obscuring the origin of funds by executing several transactions at once, making it unclear whose coins are going to who. According to Dash’s official website, the currency uses a “2-tier architecture” to power its network. The first tier consists of “miners who secure the network and write transactions to the blockchain”, while the second tier includes the “masternodes which enable the advanced features of Dash”.

Unlike Bitcoin, which uses SHA-256 hashing algorithm, Dash uses a relatively uncommon one called ‘X11’ that is compatible with less powerful hardware, allowing more people to actually mine their own currency. X11 is also supremely energy efficient, consuming about 30% less power than Scrypt. While it is one of the most highly-valued, secure cryptocurrencies you can use today, it’s unfortunately not as widely supported as Bitcoin. In terms of market-cap, it is currently valued at over $2.3 billion, with individual Dashes worth about $312 apiece.

Website: https://www.dash.org/

6. Peercoin (PPC)

Peercoin is based on the Bitcoin protocol and shares much of its source code, but instead of relying solely on the proof-of-work system to verify mined coins, it implements a proof-of-stake system that gives an advantage to miners who already have more coins to begin with. Another important distinction between Peercoin and Bitcoin is the fact that the former doesn’t have a hard cap on the number of possible coins, but is designed to “eventually attain an annual inflation rate of 1%”. As its name suggests, Peercoin is also a peer-to-peer cryptocurrency like Bitcoin, with its source code released under the MIT/X11 software license.

The overall market-cap of Peercoin is over $50 million, with each individual unit worth just a shade over $2. Peercoin uses the SHA-256 algorithm like Bitcoin, but because it uses the proof-of-stake method of generating coins, it is much more energy efficient than its more popular competitor. It only requires the energy to run the client software on PCs, as opposed to running resource-intensive cryptographic hashing functions. Overall, it’s a great alternative to Bitcoin, although, it is yet to gain the same level of acceptance as a mode of payment.

Website: https://peercoin.net/

7. Ripple (XRP)

Released in 2012 and based upon a distributed open source protocol, Ripple is a real-time gross settlement system (RTGS) that actually has its own cryptocurrency called Ripples (XRP). It is one of the most well-known and largest cryptocurrencies with an overall market cap nearing $10 billion. On its website, Ripple says it enables “secure, instant and nearly free global financial transactions of any size with no chargebacks”. Like Bitcoin and basically every other entry on our list today, Ripple also is decentralized, and counts the MIT (Massachusetts Institute of Technology) among its validators, with mainstream financial organizations,  like UniCredit, UBS and Santander among its users.

Unlike Bitcoin or most of the other alt coins on our list today, Ripple uses a unique consensus system to verify transactions rather than using either the proof-of-work system used by Bitcoin or the proof-of-stake system employed by Peercoin. The biggest feature of Ripple is that is does not differentiate or distinguish between fiat currencies and cryptocurrencies or even specialized currencies, like air miles and reward points. As of August 25th, 2017, the overall market-cap of XRP stands at $8.5 billion, while individual units are worth about 22 cents.

Website: https://ripple.com/xrp/

8. Monero (XMR)

Originally launched as a fork of Bytecoin in 2014, Monero (formerly BitMonero) is yet another open-source cyptocurrency that has already gained a steady following since its release. It is a proof-of-work cryptocurrency that works on Windows, Mac, Linux, Android, and FreeBSD. Monero isn’t actually based on the Bitcoin protocol, unlike most of the cryptocurrencies on our list today, but on the CryptoNote protocol, which has major algorithmic differences with Bitcoin in terms of its obfuscation. Like Bitcoin, however, Monero also focuses on privacy and decentralization, but unlike the world’s most popular cryptocurrency, it also allows scalablity by not having any hard-coded block size limit. To prevent excessive increases in block sizes, a block reward/penalty mechanism is built into the protocol itself.

One crucial difference between Bitcoin and Monero is that while Bitcoin mining requires high-end GPUs, the CryptoNight algorithm used by Monero is designed to be used by regular, consumer-level CPUs. As of Friday, August 25th, the total market-cap of Money is around the $1.5 billion mark, with each coin valued at over $98. Monero developers are working on a lot of projects currently, including ‘RingCT’, which is based on Greg Maxwell’s work on confidential transactions in Bitcoin and, would be a way to hide or obscure transaction amounts in Monero.

Website: https://getmonero.org/

Bonus: Bitcoin Cash (BCH/BCC)

Bitcoin Cash is the result of a hard fork of the Bitcoin blockchain, undertaken earlier this month by a bunch of disgruntled Bitcoin programmers and users from around the world. The very first block was mined by a Beijing-based group called ViaBTC on August 1st and, contained 6,985 transactions with a total block size of 1.915MB, which is nearly double the limit imposed by the original Bitcoin chain. Over the past three weeks, the world’s newest cryptocurrency has gone from strength to strength, with a total market-cap that now stands at over $10 billion. Each Bitcoin Cash token is worth about $650 as of press-time, although, both those figures represent a decline of over 30% from their all-time highs last week.

Being a fork of Bitcoin, you’d expect many of the features of Bitcoin Cash to be similar to that of the parent currency, and they are, but there are also some significant differences. First off, while block sizes on the Bitcoin blockchain are restricted to just the 1MB, each block on the Bitcoin Cash blockchain can have up to 8MB of data, which, according to the developers behind the fork, will remove the artificially-created bottlenecks, thereby improving transaction times. The new currency is also expected to reduce average fee costs going forward.

Website: https://www.bitcoincash.org/

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