The Essential Guide to Understanding Bitcoin and Crypto for Beginners

Everyone is talking about Bitcoin and blockchain, but these concepts can be confusing. Bitcoin, also known as BTC, is a digital currency with a limited quantity of 21 million. Currently, 19.5 million have been mined. The smallest unit of Bitcoin is called a Satoshi, equivalent to 0.00000001 BTC. It is estimated that 20 percent of all Bitcoins mined are lost forever due to various reasons.

Satoshi Nakamoto, the founder of Bitcoin, published the white paper on Bitcoin in 2008 and his last message was in 2010. However, it is still unknown who is behind the pseudonym. Blockchain is a technology that works as a public ledger, recording all transactions for Bitcoin and other cryptocurrencies. It is decentralized and distributed across many networked computers, making it secure.

There are different types of nodes within the blockchain, with full nodes being the most important as they contain a complete copy of the blockchain and validate it. Blockchain mining involves computational work to validate information in the blocks. The reward for mining a block is currently 6.25 BTC and it halves approximately every four years.

Wallets, which store cryptocurrencies, have both public and private keys. Cold wallets store cryptocurrencies offline and are more secure than hot wallets. Creating a cold wallet involves using a hardware wallet, setting up an operating system in a virtual machine, or using a secure system like Tails. Hot wallets, on the other hand, are accessible online and easier to use for transactions.

There are numerous wallets available for storing cryptocurrencies, including Exodus and Electrum, which are user-friendly and suitable for both desktop and mobile devices. Multisig wallets are particularly secure as they require multiple keys for transactions.