What is Bitcoin and how does it work? : Bitcoin is one of the most popular digital currency in the world and is also known as digital gold. It is also rapidly becoming a mainstream method of payment in many countries. Bitcoin has been around for over a decade now and is becoming more and more popular with the passage of time. Along with this, the value of bitcoin has also increased very rapidly over the years, which means that people are now willing to invest more in bitcoin than before. So, let’s know what is bitcoin?
What is Bitcoin?
Bitcoin is a digital currency. That is, a currency that is made of Computer Algorithm. And works on Blockchain Technology. It is a virtual currency, which remains online in the form of an electronic file. That is, it is saved in Digital Wallet. You can neither touch nor see it. Because physically it does not exist. It stays online only in the form of Digits.
Actually bitcoin is a decentralized digital currency, which is completely free from the control of states and governments. That is, there is no control of any state, government, bank or authority on it. It is a Peer-to-Peer Cryptocurrency, which is sent and received directly from one user to another. That is, no bank or mediator is required for its transaction. Direct User-to-User Transaction takes place. That is why it is very difficult to trace it.
Bitcoin was created in 2009 by Satoshi Nakamoto. But in reality Satoshi Nakamoto is a Mysterious Person. That is, no one knows his real identity. In 2007 he started writing code for Bitcoin. And on 18 August 2008, registering a domain name (bitcoin.org) created a website. After that a white-paper was released on 31 October 2008. And on 09 January 2009, the first version of Bitcoin (Version 1.0) was launched. This is how bitcoin entered this world.
Currently the price of 1 bitcoin in India is INR 1577055.85. There is no control over its authority, so its prices keep on increasing and decreasing almost daily according to the market.
How to do business in Bitcoin?
Bitcoin was created as an alternative to real currencies, in which financial transactions are not controlled by any third party such as individual, institution, group, bank, or government and can be conducted automatically. This is a reward for miners verifying transactions on the blockchain and bitcoin can be traded through various trading platforms such as Wazirx.
How to buy Bitcoin?
Now the question is how to buy bitcoin? Or rather how to invest in Bitcoin? So for this a Cryptocurrency Exchange will be required. That is, a platform will be needed, where cryptocurrencies are bought and sold. Such as Binance, Coinbase Exchange, Huobi Global, KuCoin, Kraken etc. Talking about India, WazirX, CoinDCX, UnoCoin, Zebpay and CoinSwitch Kuber are the most popular platforms in India. You can choose any one of these platforms.
I am taking the example of WazirX here. Because WazirX is India’s most popular and most trusted Cryptocurrency Exchange. And it provides great security and 24×7 support along with P2P transaction. That’s why most traders rely on it. Apart from this, WazirX is an easy-to-use platform, where trading is very easy. That’s why anyone can trade. How? Let’s understand step-by-step.
Step-1 : Install WazirX App
First of all go to Google Play Store or Apple App Store and download WazirX App. After the app is installed, open it. And tap on the Profile Icon present in the top left corner. Here you will see the option of SignUp. As shown in the screenshot below. If you are using desktop then go to the official website of WazirX. And click on the Sign Up button present in the top right corner. You will also find a link to WazirX App on the website. Tapping on the profile icon will open the menu of the WazirX app. Here you will get the option of Login and SignUp. You have to tap on the signup option. And according to Step-2, the registration (SignUp) has to be done.
Step-2 : SignUp To WazirX
As soon as you tap on the signup option, the registration page of WazirX will open. And you will be asked to enter email address and password. Here you have to take care of two things:-
Enter your Genuine Email Address. Because whatever email address you enter here, it will be useful for you to login. Also, every information related to your account and transactions will be sent to this email address. That’s why enter the correct and valid email address. And remember, the email address will not change.
Create a good and strong password to protect your account. That is, create a long and strong password by mixing uppercase and lowercase letters as well as numbers and special characters. And remember that. Because you will need it while login. Well, after entering the email id and password, accept the Terms & Conditions. And tap on the SignUp button.
Step-3. Verify Email Address
As soon as you tap on the signup button, a mail will come to your email address. In which the email address will be asked to verify. In this you will find a button of Verify Email, you have to tap on this button and verify your email address. After that come back to WazirX App and follow the next step.
Step-4. Setup 2-Factor Authentication
Now you have to setup Two-Factor Authentication. For this you will get 3 options. First, Authenticator App, second, Mobile SMS and third is None. You have to choose one of the first 2 options. Because the third option is not safe at all. So choose one of the first two options.
This is the Highly Secure option. For this, first download Google Authenticator or Authy App from Google Play Store or Apple App Store. And after that in WazirX App, tap on the option of Authenticator App. Here you will get two options. A QR Code and a Setup Key. If you want, you can scan this QR code with your authenticator app. Or you can copy the Setup Key and paste it in the Direct Authenticator app.
This is the easiest option. For this, you have to tap on the option of Mobile SMS. And by entering your 10 digit mobile number, tap on the button of Send OTP. On tapping, you will be asked for OTP, which will be received on your mobile number. You have to enter the OTP, and tap on the Next button. bus!
Step-5. Complete Online KYC
Now you will get the option to select the country. Here you have to select your country. And after that in the Type of KYC, one has to choose between Personal or Company. That is, to select Personal for Personal Account and Company for Business Account. And tap on the button of Complete KYC.
Now a long KYC form will open in front of you, where you will be asked some basic details. Such as your name, address, date of birth, state, city, pin code etc. After filling the basic details you will be asked to upload the document. Here you have to provide information about the following documents:-
PAN Number is mandatory. Here you have to enter PAN number 2 times. And upload the photo of PAN card.
You get three options in Photo & Address Proof. First Aadhaar Card, Second Passport and Third Driving License. You can choose any of these three options. For example, if you choose the option of Aadhar card, then you have to enter your Aadhaar number 2 times. And upload 2 Aadhar card photos (one front side and one back side).
Here you have to upload a selfie with your ID proof. That is, whatever document you have uploaded in Photo & Address Proof, you have to take a selfie by holding it in your hand. and upload it.
In this way, by filling the KYC form completely and uploading all the required documents, tap on the submit button. And wait 24 to 72 hours. You will get the mail from WazirX in a day or two. And your account will be approved.
Step-6. Add Funds
After the account is approved, you have to go to the WazirX App. And tap on Funds. If you have selected your Country India in KYC Form, then here you will get the option of INR. As soon as you tap on the option of INR, you will get the option of Deposit and Withdrawal. As shown in the screenshot below.
Here you have to tap on the option of Deposit. And choose your preferred payment method. That is, Net Banking, Wallet App (Mobikwik) and P2P have to be selected. And through that you have to deposit money in your WazirX Account.
Step-7. Buy Bitcoin
Now the question is how to buy bitcoin? So for this you have to go to the Exchange section. And select the option of INR from the top menu. Here you will find a list of all the cryptocurrencies that accept payment in INR. You have to select your preferred cryptocurrency (Bitcoin for example) and tap on Buy/Sell button.
As soon as you tap on Buy/Sell button, you will see two sections – Buy and Sell. As shown in the screenshot below. As soon as you tap on the Buy section, you will get three options. Price, Amount and Total. Now suppose you want to buy bitcoins worth Rs 10,000. So you have to enter Rs 10,000 in the Total field. And tap on Buy button.
Whereas if you want to buy a certain amount of bitcoins. So you can enter the amount directly in the Amount field. For example, if you want to buy 0.025 bitcoin, then you can write 0.025 in the box with Amount. Well, after entering the amount, tap on the Buy button. And slide the Arrow (arrow) button to the right side. bus!
Step-8. Sell Bitcoin
Now suppose that the price of Bitcoin has increased. And you have to sell your bitcoin back. So you just have to repeat step-7. But this time instead of Buy, choose the Sell section. And enter the amount you want to sell. For example, suppose you want to sell 0.0276 bitcoins. So in the box containing the amount, write 0.0276. And tap on the option of Highest Price which is visible in front of the price box.
After that tap on Sell button. And the Arrow button has to be slide to the right side. bus! Your order will be confirmed. And his money will be deposited in your INR Account. Which you can check by going to Funds.
Sometimes orders take some time to get confirmed. In such a situation, you can check whether your order has been confirmed or not by going to the Orders section. When the order shows 100% complete, it means that the order has been confirmed. Here Buy orders are shown in green color and Sell orders in red color.
What is a Bitcoin Wallet?
A bitcoin wallet is a software program or device that functions like a wallet to hold bitcoins, just like we use a wallet to store cards or money in real life. A bitcoin wallet has a unique address through which bitcoins are sent and received with the help of the wallet.
For security, these wallets have a private key that matches the address of the wallet. Bitcoin wallets are available in desktop, web, mobile and hardware variants.
Advantages of Bitcoin
Along with knowing what bitcoin is, it is also important to know its benefits, which are as follows:
- You can send bitcoins to anyone and anywhere in the world.
- Its account is not blocked, like sometimes bank accounts are blocked.
- Can be used for international transactions and there are transaction fees.
- In this, the role of the middleman is not there, due to which the transaction is done in less cost.
- It does not have statutory recognition in any country, so it can be used at no extra cost.
Disadvantages of Bitcoin
Along with knowing what bitcoin is, it is also important to know its disadvantages, which are as follows:
- Its biggest disadvantage is that if your data is hacked and cannot be recovered or if you forget the password then you lose all your bitcoins.
- It is not controlled by any authority, due to which it can be used to buy illegal things.
Future of Bitcoin in India
The Indian government is very strict about bitcoin or crypto. The government currently does not look at it in terms of digital currency or investment methods at all. Along with this, the Reserve Bank of India also keeps demanding to ban it. In today’s time, there is a provision of about 30% tax and 1% TDS on transacting on crypto. In many cases, TDS is charged up to 5%.
30% of the tax on its profits is levied in betting platforms like MPL. Meaning the government sees it as a batting platform. Which is not a good thing for the future of crypto in the country.
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