Bitcoin basics: From layman to layman

0
70

Quick question: what are your greatest fears on cryptocurrencies, Bitcoin to be precise? Maybe we can start there, but before that let’s go through 1 or 2 things together shall we?

I know we’ve written a number of articles on Bitcoin here on Techzim, but whenever we do there’s always a comment from someone asking what it is all about or where one can use it and all. Therefore, we’ve decided to write another one and I’ll try by all means to surf out all the jargon and keep it as basic as can be. Also, if videos speak to you better, then great because we have a Bitcoin series too right here.

For starters, I will just briefly describe what Bitcoin is because my assumption is people want to know about Bitcoin more as utility than as a technology so to say. I think those that are interested in the technology already know about it by now.

advertisement

So, what is Bitcoin?

Bitcoin is a crypto currency, actually the first of its kind.

Well, maybe the next question will be what is a cryptocurrency? We all know what currency is right? (Just in case, we’ll lightly define it as a medium of exchange). So then a cryptocurrency is the virtual or digital version of a currency. This type of currency is generated by computers using cryptography i.e. the art of writing or solving codes and thus making them very secure.

The other key quality of crypto currencies is their ease to transfer. Cryptos remove the need for a third party or middleman (in this case a bank), because you can simply transfer it from peer to peer. More or less what mobile money does, you can transfer money from your EcoCash account straight into someone else’s without involving a middleman.

For an in depth explanation, you can check this one out.

So the next question would be

Why should I use Bitcoin?

Firstly, because Bitcoin is a crypto currency, it means it is very secure (remember cyptography?)

Also, most if not all Bitcoin wallets have the provision for the 2 step verification which basically means apart from the usual password/pin/pattern/finger print, you also need to enter the code that will be sent to your phone by, in this case the wallet. This is meant to increase security by increasing another layer of verification.

The second reason why one should use Bitcoin is because it is boarderless meaning it is no respecter of country or region in which the transactions are being made. I will give an example, if you want to send money from Zimbabwe to Burundi via Mukuru you simply can’t because the service is not available in Burundi. However, you can send Bitcoin from anywhere to any Bitcoin wallet wherever.

Third reason is, unlike national currencies, Bitcoin is not any government’s baby (that right there should make any Zimbabwean jump on ship!). If you’re a fan of democracy, Bitcoin is your thing. Bitcoin is basically governed by its miners. Of course there are the core developers of Bitcoin but they cannot make any changes if they are not accepted by the miners. How you may ask. Well, when the core Bitcoin devs make any changes to the blockchain, miners can choose to accept or reject these changes by either installing or not installing the updated wallet. If the majority install the updates then that’s what goes. Bitcoin is decentralised meaning not one person or specified individuals have full control over it.

Now to my fourth and final reason. Remember I said Bitcoin was boarderless and there was no need for 3rd party involvement when transferring it right? Guess what that does to the cost of transfer? Yes, it lowers it because the transfer process does not need to be handled by so many extra entities as would our usual currencies. However, the cost of transfer is not fixed since it is determined by the market (demand and supply).

When there is high demand for Bitcoin transactions often during weekdays or during the day etc., transactional charges are high. Also, the urgency of the transfer also affects the transaction fees. In fact some Bitcoin wallets allow you to choose the priority of the transfer which will determine the cost and the speed of transfer.

What are Bitcoin wallets?

I think we’ve mentioned the term wallets enough to want to define them. So briefly, I will do that. A Bitcoin wallet is a software program where Bitcoins are stored. They are used to facilitate the sending and receiving of Bitcoins as well as give ownership of the Bitcoin balance to the user. It’s not too complicated, it’s just the equivalent of a physical wallet only just digital. That word digital shouldn’t scare you because you most likely already own a digital wallet – mobile money (EcoCash, Telecash or on OneMoney)!

There are quite a number of Bitcoin wallets available, examples include Mycelium Bitcoin Wallet, Copay, Coinbase, Blockchain etc. To read more on these, you can check out this link.

It’s also important to note that you can still use Bitcoin without the need of a Bitcoin wallet, just like you can use money without a wallet 😉 but for convenience, just go ahead and use a wallet.

So now…

Where can I get Bitcoin?

Bitcoin can be obtained through various means which are:

  1. Bitcoin mining – Since this is not a technical article, I will shy away from explaining Bitcoin mining. But just so you know, Bitcoin mining is the primary source of Bitcoin.
  1. Bitcoin transfer – From one Bitcoin wallet to another.
  2. Purchase from a Bitcoin exchange

Let’s talk about Bitcoin exchange a bit. A Bitcoin exchange is a digital marketplace where traders can buy and sell Bitcoins using different fiat currencies. See? The concepts are similar to those we are used to. Bitcoin exchange platforms connect those who want to buy Bitcoin to those who are selling it.

In Zimbabwe we do have a Bitcoin exchange called Golix. Golix was previously known as BitFinance or Bitcoinfundi but recently expanded into trading cryptocurrency other than Bitcoin hence the name shift.

Where can I use Bitcoin?

On this, I will stick to local shops and or companies. This list is very much subject to change, so it will be updated as and when necessary.

  1. BeFoward – an online platform that sells second hand cars from Japan as well as laptops.
  2. BitMari – a Bitcoin remittance service that has a partnership with Agribank in Zimbabwe.
  3. The Hive Inc – an upscale men’s and women’s clothing boutique which offers exclusive personal style services, detailed wardrobe management and style assessment.

So back to my question, what are your greatest fears concerning Bitcoin or any other cryptocurrency???

LEAVE A REPLY

Please enter your comment!
Please enter your name here