This is your comprehensive guide to bitcoin… the revolutionary new way to transact with anyone anywhere on the planet. Bitcoin was released into the global market in 2009 and very rapidly took the world by storm, setting a precedent for the creation of alternative cryptocurrencies. View the live price/chart of Bitcoin to Rand or 1 BTC to Rand today. ✅ More than 2 million+ bitcoin wallets have been opened by South Africans already. It is simple and easy to invest in Bitcoin.

₿ Bitcoin was developed to produce an electronic currency that was independent of any central banking authority; where virtual money is transacted in cyberspace more or less instantly with very low transaction fees. The currency is pseudonymous, meaning that funds are not tied to real-world entities but rather bitcoin addresses.

₿ Bitcoin is both exciting and mysterious, and you need to do your homework if you’re interested in transacting off this virtual platform. Here is everything you need to know about bitcoin and how you can buy and invest in bitcoin in South Africa.

What is bitcoin?

? To put it simply, bitcoin is electronic money or rather cryptocurrency. It’s a form of digital currency where no one controls it; and it’s not printed like ordinary Rands, US dollars or Euros. It is produced by people who run computers using software that solves mathematical problems. These people are known as ‘bitcoin miners’.

? Bitcoin allows any person based anywhere in the world to send and receive money without permission from a bank, corporation or government entity. The transaction is instantaneous and the cost is negligible regardless of the amount of money being sent or received. This takes intermediary banking services out of the equation, such as PayPal, MoneyGram, and Western Union.

?It’s a decentralised digital currency and the largest of its kind in terms of total market value. Bitcoin is decentralised because it is not controlled by any centralised banking merchant. It is created and managed through advanced encryption technology known as cryptography.

? Today, Bitcoin can be used as a legal form of payment for products and services and because the transaction fees are substantially lower than typical credit card payment processes, merchants are more than happy to accept bitcoin. The big difference between bitcoin and credit cards is any fees charged are paid by the purchaser and not the vendor.

Who invented bitcoin?

? Bitcoin was invented per se by a pseudonymous person known as Satoshi Nakamoto, who for various reasons has chosen not to disclose his or her real identity (it may even be a group of software inventors). Nakamoto first published the invention of bitcoin in a white paper in 2008 and released it as open-source software in 2009.

? Nakamoto was active in the development of bitcoin up until 2010 but has since disappeared off the radar. Many people have claimed to be Satoshi Nakamoto but no one knows for sure who the person is and where he or she is now.

? Nakamoto devised the first blockchain database. Through this process, Nakamoto solved the double-spending problem inherent to digital currency using a peer-to-peer network. In essence, Nakamoto produced a virtual currency that was independent of any central authority, which could be transferred electronically more or less instantly and with very low transaction fees.

How does bitcoin work?

? To understand how bitcoin works, you need to understand the simple dynamics of blockchain. Bitcoin and blockchain are not the same, although one cannot be separated from the other.

? Basically, blockchain is the ingenious technology that allows information to pass from A to B in a fully automated and safe manner. The emphasis is on fairness and security; where blockchain creates a massive database that allows people from around the world to record information safely and interact with anyone without having to place their personal trust in them.

? Can you imagine a “trustless system”. Now you can with blockchain. There is no central point to blockchain; no central government entity, foreign exchange or bank. Blockchain is decentralised; meaning all the information is stored on hundreds of thousands of different computers which makes it impossible for anyone to hack the database and steal information.

How does blockchain work?

? Put simply, one party initiates the transaction process by creating a block which in turn is verified by hundreds of thousands of computers that are distributed around the worldwide net.

? The verified block is then added to a chain that is stored across the net. This creates a unique record with a unique history. It’s virtually impossible to falsify information pertaining to one block because it would mean falsifying the entire blockchain in millions of instances across the net.

? In summary, the digital information (the monetary transaction) is the “block” and this information is stored in a public database known as the “chain”. Hence, blockchain technology. Bitcoin uses the blockchain model for financial transactions but it can be used in countless other ways.

Blocks store transaction information as follows:

• date, time and the Rand/Dollar/Euro amount
• who is participating in the transaction (buyer and seller); although no actual name is identified, uses a digital signature like a username
• unique information that distinguishes one block from another using a unique code called a “hash”

? A single block in the blockchain can store up to 1 MB of data. Depending on the transaction, one block can store a few thousand transactions.

?The information in the blockchain is open for anyone to see and therefore transactions using blockchain technology are transparent and everyone is held accountable for their transactions. More importantly, any information stored in a block cannot be changed or altered so it stands as irrefutable evidence of a transaction.

Is bitcoin the same as blockchain?

? No, bitcoin is not the same as blockchain but the two are often confused with each other. This is because bitcoin was the first application to successfully use blockchain technology in the form of open source code and since then bitcoin and blockchain are often used interchangeably.

Bitcoin transactions are stored and transferred using a distributed ledger on a peer-to-peer network. Blockchain is the technology that maintains the bitcoin transaction ledger.

Is bitcoin safe to use for transactions?

? Cryptocurrencies such as bitcoin are built on blockchain technology. The information held within a blockchain is safeguarded by a peer-to-peer (P2P) network which is open, public and anonymous. The identity of the person doing the transaction is hidden behind random numbers and letters which is a form of digital coding known as cryptography.