Bitcoin is a type of digital currency. It began on 2009 and by 2010, bitcoin was valued for the first time. Since bitcoin was only mined and not exchanged, it was impossible to know its value. Finally, someone sold 10,000 bitcoins for two pizzas.
Through the years, bitcoin went through price crashes, scams and theft. Gradually, as more users signed up, more money was moving into the bitcoin ecosystem. Bitcoin is protected by cryptography which is a branch of mathematics that provides high levels of security by making a mathematical proof.
Traditional banks are already using cryptography. For bitcoin however, this makes it impossible for anyone to use another user’s wallet or to corrupt the block chain. It is also used to encrypt a wallet. So how do you actually buy bitcoin with credit card?
The first thing that you have to do is to download a bitcoin wallet. A bitcoin wallet is a program or system that stores the user’s payment information. You can sign up by going to a site or a mobile app. It shouldn’t take a long time.
You can buy bitcoins on a bitcoin exchange using your credit card. Then, your bitcoin will be transferred to your wallet. It’s pretty straightforward. Simply click “buy bitcoin” and it will redirect you to a website where you can choose how much money you want to pay for it or how much BCH you want to buy. By entering an amount, it will automatically convert USD to BCH or vice versa. They also have some predetermined values so all you have to do is click buy.
Wallet without a single coin
A bitcoin wallet is not used to store your bitcoin. It can show you the total balance of the bitcoins that it is controlling. It is used to store your keys: private and public keys. Your private keys allow you to spend the bitcoins assigned to it in the blockchain. It also lets you pay another person.
Private Keys vs Public Keys
These are required to ensure the security of cryptocurrencies. These keys are composed of letters and numbers to keep the user’s information safe. When a user makes the first transaction, a unique pair of private and public key is generated. Only the user knows the private key which also serves as the user’s digital ID. The public key is generated through an algorithm that is applied to the private key.
If a user wants to send a bitcoin to another person, the transaction is broadcasted to the network. Here, the distributed nodes confirm the credibility of the said transaction, finalizes it and records it to the blockchain. Then this is where private key comes in to sign the transaction digitally.
The signature confirms the ownership of the private key but nobody knows the details. The public key is used to make sure that the digital signature is from the private key. If the transaction is valid, the funds are sent to the recipient’s public address.