Transacting by way of bitcoins is an undertaking that requires a whole lot of understanding before a person gets the confidence to enter into cryptocurrency transactions.
First off, it is not the same as paying real cash to another party through a bank or via an ewallet to complete an online transaction. Here, a cryptocurrency payer needs to be part of a network of peers or persons agreeing to pay and receive payments by way of cryptocurrency.
What is Cryptocurrency?
Cryptocurrency represents value of money that was paid or received by a peer to another, then entered as a transaction in a database of entries. In order to send cryptocurrency as payment, the payor or sender of the cryptocurrency must be the holder of a private key that validates his or her right to send that amount of cryptocurrency to a peer.
The recipient peer, on the other hand, will receive his own set of codes that will serve as his private key. That set of key will then give him the right to use the cryptocurrency received for his own future cryptocurrency transaction.
Every private key assigned to a transaction that has been entered in the cryptocurrency database must match a public key. Take note that entries in the database cannot be altered or modified unless that particular condition is met. Otherwise, an invalid private key cannot create a valid cryptocurrency transaction.
Presently, the cryptocurrency widely used is the bitcoin. Persons wishing to use cryptocurrency as means of sending payment must first buy a bitcoin value using real money.
How to Buy Bitcoins
The simplest way to buy bitcoins is to buy them from a reputable bitcoin trader that usually deals with bitcoin exchange transactions. Since real money must be paid in order to acquire a sum of bitcoin by way of credit or debit card, a first time buyer must make certain that he is buying from a legitimate site.
Usually a legitimate bitcoin dealer will sell only minimal amounts, e.g. $50 or less. So once a purchase has been made, the transaction enters the cryptocurrency database. The buyer then receives a private key that will allow him to use the bitcoin for whatever purpose it will serve him.
If a bitcoin buyer wishes to store bitcoins, maintaining a bitcoin wallet is advisable. Here, a person can easily keep track of how much bitcoin he owns, as well as determine the actual real money value of his stored bitcoins.
At some point in time, he may also want to sell some of his bitcoins at a higher price than its actual cost in order to gain profit. However, the value by which a bitcoin is sold depends on the current free market exchange rate, which means the current price index that most bitcoin buyers are willing to pay in exchange for real money.
