“Bitcoin.” “Cryptocurrency.” “Digital money.” “P2P Cash System.”
Everything else is digital these days, why not currency?
You’ve probably heard about bitcoin here and there over the past several years. Developed by Satoshi Nakamoto in January 2009, bitcoin has generated a great deal of curiosity and interest by businesses and individuals alike around the world.
Maybe you’re wondering if bitcoin is something you should consider accepting at your business? Is bitcoin a worthy investment? Is it risky? Will it ever be fully embraced as a viable international currency? How do you even get started?
We’re going to try to answer some of the basic and not-so-basic questions businesses have about the bitcoin topic.
Let’s begin with some of the commonly used terms associated with cryptocurrency, including what is cryptocurrency.
Address: A randomly-generated block of letters and numbers that make up your bitcoin identity. The address is the location where you receive, send, or hold your currency and looks nothing like a street, website, or email address.
Blockchain: Using cryptography (see below) as the main operator, a block chain is the main data system that supports digital cryptocurrency ledgers containing the records of transactions (blocks). In a blockchain, “blocks” are the ever-increasing permanent pages of the ledger that contain transaction records viewable by everyone. Blocks also signify time to give you an idea of how long it will take for your transaction to be confirmed. A new block is made approximately every 10 minutes, so if your transaction occurred on a block that has 5 blocks on top, you can expect it to take nearly one hour for confirmation.
Confirmation: In bitcoin, a confirmation is required by the network (users) for a transaction to be verified. Some companies require multiple confirmations while others only require one. Multiple confirmations give assurance that the payment won’t be reversed. As a general practice, the higher the value of the transaction, the greater the number of confirmations required.
Cryptocurrency: Encrypted digital currency that functions on a peer-to-peer basis without a central bank or middleman. Transactions rely on a blockchain and a network that keeps permanent track of every transaction and prevents non-payment.
Cryptography: Solving and writing codes, in this case, for cryptocurrency.
Peer-to-Peer or P2P: Simply means that there is no central payment processing or pass-through system for payment transactions. A pays B. A doesn’t have to initiate payment through a bank, A pays B directly in digitally encrypted bitcoin confirmed by the network.
As it turns out, there are numerous bitcoin sellers (or exchanges) on the internet. BestBitCoinExchange.com offers up the Top 40+ Bitcoin Exchange Sites where you can buy bitcoin and cryptocurrency (because there are other cryptocurrency types out there). This website also provided a list of the best seller sites for beginner-friendly exchanges. But, if you want to skip to the “best” bitcoin exchange sites in 2017, here are the top ten according to BestBetCoinExchange.com:
Bitcoin and its processes are multilayered and complex topics. The next post will delve into software, mining, and other aspects of cryptocurrency, including business impact. Watch for it!
In the meantime, be sure to check out Valpak.com to learn how you can effectively market your business with our print, digital and direct mail solutions.