Wooden Bitcoins via SliceDesignStudio on Etsy

Bitcoin: An Introduction

Bitcoin seems to be everywhere these days, especially since the price of one Bitcoin recently went as high as $10,000.  Many people are confused by what Bitcoin is, so I made this guide to help you understand it a little bit better.

What is it?

Bitcoin is a digital currency that can be exchanged just like money, but it is not backed up by anything or any government. The price can fluctuate wildly, as we have seen this year with it going from around $900 to $10,000 in 10 months. There is no physical version of Bitcoin, so those cute little coins you see are novelty items and not real Bitcoins.

Just like there are Dollars and Pennies, Bitcoin can be broken into Satoshi, which are the smallest fractions of Bitcoin. A Satoshi is 8 decimal points: .00000001, so this is the smallest amount of Bitcoin that you can send to someone. At the current price of $10,000 per Bitcoin, this makes a Satoshi equal to 1c.

Bitcoin works using the theory of a “distributed ledger.”The ledger or record of transactions is distributed it all over the world on a network of computers that anyone can join. Transactions occur when people buy, sell and trade Bitcoin. These transactions are recorded by various computers called “miners.” Because the data is distributed, there is no central area where it is all stored, and therefore it is much safer and more secure. The record of all these transactions is known as the blockchain.

There are many other digital currencies besides Bitcoin. They all have different elements to them, but the main idea is to have a distributed database as opposed to a central database like the banks we have always known.

Why Would I Use it or Accept it As Payment?

You can use Bitcoin to buy just about anything, and you can also convert it back into regular “fiat” money. A good reason to accept it as payment is that the value has dramatically increasing lately, and a lot of people have gotten very wealthy. You can accept Bitcoin as payment, and then instantly convert it back into USD, so there is no real risk.

If you are interested in accepting Bitcoin for your business, it’s very easy. Just register for an account with Coinbase, they are the biggest and most well-known company in the US. Once you have an account, you can send invoices to customers for Bitcoin and then easily transfer the money back into your bank as USD.

You can also buy Bitcoin from them if you are interested in investing. You don’t have to buy an entire Bitcoin, in fact the first time I purchased any I just bought $100 worth. If you follow this link you will receive a free $10 worth of Bitcoin when you buy $100 worth of any cryptocurrency that they sell.

Bitcoin Millionaires are looking for places to shop, so what are you waiting for?!  If your Etsy shop or business acccepts Bitcoin, be sure to leave a comment below. You can also check out my Etsy shop to see how I accept Bitcoin.