When the world-known business magnate and the richest person in the world say that he thinks that Bitcoins are “good things to invest in”, the investors are surely going to listen. Admit it or not, Elon Musk has become the biggest Bitcoin influencer and his cryptic messages & tweets on this Cryptocurrency have made its prices jump this year. When the Tesla chief executive tweeted about his discussion regarding the sustainability of this digital coin, the prices of Bitcoin popped about 4%.

Today, When Bitcoins are a hot topic in the global market and more & more investors are looking forward to getting benefits from it, how come we stay behind learning about them. They are talk-of-the-town these days and of course, most people are struggling with so many questions like what are they, how do they work, how to invest in them, etc. If you also want to know, this blog can help you. Under a discussion with our financial expert Mr. Ngulminthang Lhanghal, we have got all your queries covered regarding bitcoins. Let’s have a look?

What Are Bitcoins?

Often described as a cryptocurrency, a virtual currency, or a digital currency, bitcoin is a decentralized digital currency that can be purchased, sold, and exchanged online directly without the involvement of an intermediary like a bank & government. People can use it to buy products & services but it is not accepted by many shops yet and in fact, has been banned by some nations due to the absence of legal backing & government regulation. They were launched in January 2009 and are considered the first cryptocurrency.

Still, confused? Let’s understand it in this way. Fiat money is backed up and regulated by the issuing government while on the other hand, bitcoin runs on a blockchain network through a combination of peer-to-peer technology.

How Does Bitcoin Work?

Bitcoins are simply a type of computer file that is stored in a digital wallet on a computer or smartphone. They are built on a distributed ledger technology or digital record ie. The blockchain keeps all data linked and information about each & every transaction. For example, date, time, total value, buyer & seller, and a unique identifying code for each exchange. Since blockchain is decentralized, it is not controlled by any one organization, it possesses a threat of being edited by anyone that can be risky.

Thereby when a block or transaction is added and it becomes accessible to everyone in the network, it is verified by the majority of bitcoin holders and unique codes to recognize the user's wallet. It makes transactions encrypted & secure.

What Is Bitcoin Mining?

Bitcoin mining is simply the process of introducing new transactions to the bitcoin blockchain ie. creating new bitcoins. But it is not that easy as it involves a highly complex process of solving mathematical puzzles to verify the transactions. This is how new bitcoins are created.

How To Buy Bitcoins?

Asking our financial expert Mr. Ngulminthang Lhanghal, he says that they can be purchased via exchanges like Coinbase, etc. Here you can buy, sell and store cryptocurrency and set up an account by verifying your identity and providing any type of funding sources such as a bank account or debit card. Other exchanges that people can consider are Kraken and Gemini. It doesn't matter where you are buying bitcoins from, you will need a digital wallet to store them. Pro tip: bitcoins are expensive and involve generally a small percentage of your crypto transactions amount.

How to store bitcoins?

Bitcoins can be stored in two ways:

Hot Wallet - Involves digital currency stored in the cloud on a trusted exchange and accessible through a computer browser.
Cold Wallet -It is an encrypted portable device where you can download and carry bitcoins.

Should I Buy Bitcoins?

According to Mr. Ngulminthang Lhanghal, it completely depends on a buyer’s willingness to buy bitcoins and take risks. Since every transaction is securely recorded on a public network, it is quite difficult to copy bitcoins or forge them but they are also subject to being exposed to various websites that offer to store bitcoins remotely.

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