Hello! π We invite you to the world of Bitcoin (BTC), which led the digital currency revolution!
Are you curious about Bitcoin? These days, we often hear about Bitcoin in the news, but there are probably many people who don't know exactly what Bitcoin is. From cryptocurrency beginners to interested investors, we will explain Bitcoin from A to Z step by step so that everyone can understand it easily.
The word virtual currency may sound unfamiliar, but don't worry! After reading this article today, you will be able to gain basic knowledge about Bitcoin as well as all the information on how to actually use it. So, let's go into the exciting world of Bitcoin together.
A Complete Introduction to Bitcoin (BTC)
Bitcoin is the world's first decentralized digital currency developed in 2009 by a mysterious anonymous person (or group) called 'Satoshi Nakamoto'. However, you should not think of Bitcoin as simply 'money'. Bitcoin is an innovative technology that completely changes the paradigm of the existing financial system.
Key Features of Bitcoin:
• Decentralization: Direct transactions between individuals without the intervention of banks or governments
• Transparency: All transaction history is publicly recorded
• Immutability: Once recorded, a transaction cannot be changed
• Limited Supply: The total issuance is limited to 21 million
Bitcoin, which guarantees the safety and transparency of transactions based on the innovative technology called blockchain, is currently the most widely known and valuable cryptocurrency in the world. Many people call it digital gold, and it is also attracting attention as a store of value.
In particular, it is gaining interest from institutional investors as a means of inflation hedging and portfolio diversification. Even big names like Tesla and MicroStrategy started holding Bitcoin.
The fascinating history of Bitcoin
The history of Bitcoin is like a drama. It all started on October 31, 2008, when Satoshi Nakamoto published a nine-page white paper on a cryptography mailing list during the height of the global financial crisis.
On January 3, 2009, a historic moment came. The first block, the ""genesis block,"" was created. Interestingly, this block contained a headline from The Times newspaper at the time: ""Chancellor on brink of second bailout for banks."" This is being interpreted as a critical message to the existing financial system.
2010
First Bitcoin Transaction
2 Pizzas = 10,000 BTC
2017
All-time high reached
around $20,000
2021
New record set
around $69,000
May 22, 2010 is a historic day known as 'Bitcoin Pizza Day'. The first Bitcoin commercial transaction occurred when programmer Laszlo Hanyecz purchased two Papa John's pizzas for 10,000 Bitcoin. At the time, 1 Bitcoin was worth about $0.004, which is equivalent to... imagine!
Since then, Bitcoin has grown through many twists and turns. In 2011, it was controversially linked to dark web sites such as Silk Road, and in 2014, it was hit hard by the hacking of Mt. Gox, then the world's largest exchange. But through all these trials, it has grown stronger.
The Mysterious Workings of Bitcoin
Understanding how Bitcoin works is like uncovering the principles of magic. But don't worry, I'll explain it as simply as I can!
The Magic of Blockchain Technology: At the heart of Bitcoin is the blockchain. Imagine it. There's a huge ledger that's copied identically across thousands of computers around the world. Whenever someone makes a transaction, all of these computers go through a process of agreeing, ""Yes, this transaction is real!""
The Power of Mining:
Bitcoin miners solve complex mathematical problems to create new blocks. During this process, transactions are verified, and successful miners are rewarded with new bitcoins. This is similar to digging for gold in a gold mine, which is why it is called 'mining'.
Each block contains a hash value that corresponds to the 'fingerprint' of the previous block, so to tamper with past records, all blocks after it would have to be recreated. However, this is practically impossible, as it would require controlling more than half of the global network.
The Bitcoin network operates 24 hours a day, 365 days a year, and a new block is created every 10 minutes on average. This entire process is automated, so there is no need for a central administrator. Isn't this amazing technology?
How to Use Bitcoin in Real Life
Many people think that Bitcoin is simply a speculative asset, but in reality, it is used for various purposes. You can encounter Bitcoin in places closer to our daily lives than you think!
New Options for Online Shopping: Global companies such as Microsoft, Overstock, and Newegg are accepting Bitcoin payments. In Korea, more and more online shopping malls are starting to support Bitcoin payments. It is especially frequently used to purchase digital goods or game items.
Innovation in Overseas Remittance:
Traditional overseas remittances have high fees and take a long time. But with Bitcoin, you can send money anywhere in the world in minutes, and at much lower fees. This is a really useful tool, especially for those with family abroad or who do international business.
Investment and Asset Conservation: Many investors view Bitcoin as “digital gold” and hold it as part of their portfolios. It is used as a hedge against currency depreciation, especially in countries with high inflation.
Donations and Social Contribution: Charities also use Bitcoin’s transparent nature to raise donations. Donors can track how their donations are used through the blockchain.
A Guide to Trustworthy Bitcoin Exchanges
Choosing a trustworthy exchange is the most important thing when trading Bitcoin. Just like choosing a good bank, choosing an exchange is directly related to the safety of your assets.
Major domestic exchanges:
• Upbit: The largest exchange in Korea, with an intuitive user interface and large trading volume
• Bithumb: An exchange with a long history that supports various cryptocurrencies
• Coinone: It is evaluated as having good corporate services and high security.
• Korbit: It is the first Bitcoin exchange in Korea and provides stable services.
Major overseas exchanges:
• Binance: It is the world's largest exchange and you can trade hundreds of coins.
• Coinbase: It is an exchange listed on the NASDAQ in the United States and is beginner-friendly.
• Kraken: A long-standing exchange based in Europe with high security and reliability
Checkpoints when choosing an exchange:
✓ Security certification and past hacking history
✓ Trading fees and deposit/withdrawal fees
✓ Daily trading volume and liquidity
✓ Quality of customer support service
✓ Compliance with government regulations
✓ User reviews and reputation
For beginners, I recommend starting with a domestic exchange that is easy to use and offers complete Korean support. After you've become familiar with it, it's a good idea to expand to overseas exchanges.
Passionate Bitcoin Community
One of Bitcoin's greatest assets is its passionate and knowledgeable community spread around the world. Beyond simply sharing investment information, this community contributes to the advancement and popularization of Bitcoin technology.
Online Community:
• Reddit: Active discussions take place on r/Bitcoin, r/BitcoinBeginners, etc.
• Twitter: Bitcoin developers, investors, and analysts communicate in real time
• YouTube: Coin analysis channels provide market trends and technical analysis
• Telegram: Various Bitcoin-related groups share information
Domestic community recommendations:
• Various coin communities on Naver Cafe
• DC Inside Cryptocurrency Gallery
• Various coin-related YouTube channels
• Official communities of exchanges such as Upbit and Bithumb
Offline activities: Bitcoin meetups, conferences, and hackathons are regularly held around the world. In Seoul, groups such as 'Bitcoin Seoul' and 'Blockchain Seoul' are also actively participating. Attending these events allows you to network with fellow investors and hear first-hand about the latest trends.
When participating in the community, it is important to always maintain a critical mindset and synthesize multiple opinions. Be careful not to get caught up in excessive optimism or pessimism at times.
The Complete Guide to Secure Bitcoin Wallets
Keeping your Bitcoin safe is key to protecting your assets. There is a famous saying in the Bitcoin community that goes, ""Not your keys, not your coins"", so managing your private keys is really important!
Hardware Wallets - The Ultimate Security:
• Ledger Nano S/X: The most widely used hardware wallets from a French company
• Trezor One/Model T: The most secure, open-source product from a Czech company
• Cold Card: A Bitcoin-only wallet, popular with users seeking extreme security
Software wallets - a balance of convenience and security:
• Electrum: A Bitcoin-only wallet, lightweight and fast
• Blockchain Info: A web-based wallet, easy to use
• Samurai Wallet: Privacy-focused mobile wallet
Wallet security tips:
π Never store your seed phrase (recovery phrase) online
π Write your seed phrase down on a piece of paper and store it in a safe place
π Always download wallet software from the official website
π Regularly back up your wallet and perform recovery tests
π Never access your wallet on public Wi-Fi
π Always set up 2-step authentication (2FA)
For beginners, we recommend starting with a software wallet first, getting familiar with Bitcoin, and purchasing a hardware wallet when storing large amounts. Hardware wallets have initial costs, but they are the safest investment in the long run.
Smart Bitcoin Investment Strategy
Investing in Bitcoin is not just gambling. It is a serious investment activity that must be approached with sufficient knowledge and strategy. I will tell you the key principles for successful Bitcoin investment.
Importance of Fundamental Analysis: The price of Bitcoin is affected by various factors. You need to comprehensively analyze the status of technological development, participation of institutional investors, government regulation trends, and the overall cryptocurrency market situation.
DCA (Dollar Cost Averaging) Strategy:
Rather than investing a large amount at once, this is a strategy to purchase a certain amount regularly in installments. For example, this is a method of purchasing 100,000 won worth of Bitcoin every month. This can reduce the impact of price volatility and also relieve psychological burden.
HODLing strategy: An abbreviation for 'Hold On for Dear Life', this is a strategy of holding on for a long period of time without being swayed by short-term fluctuations. Looking at the history of Bitcoin, long-term investors tend to get better returns.
Risk management: Bitcoin is a highly volatile asset. It is common for the price to fluctuate by more than 10-20% in a day. Therefore, it is better to make a pre-established investment rather than an emotional judgment.