Bitcoin Basics


A bitcoin is a virtual token that can be freely transferred from one user to another through a secured network. It’s limited in supply as only 21 million BTCs would ever be generated; 14 million bitcoins have been `mined’ so far. Bitcoins can be fragmented (into smaller denominations) far more times than a fiat currency .

Mining needs a host of powerful computers (bitcoin hardware), uninterrupted power supply and several people working as a team. Once you’ve the hardware, you can join a `bitcoin pool’, where several people are working together to validate `blocks.’ A `block’ is a record of recent transactions carried out using bitcoins. Miners, upon clearing a block, are “paid“ in bitcoins (by the bitcoin network) for their services.

You have to open (simply download) an account with `exchanges’ like Zebpay or Coinsecure. Once the account is opened, the new user is asked to deposit money into one of the several bank accounts of the exchange (using NEFT/RTGS). The money deposited (in the exchange’s bank) would be used to buy bitcoins on the bourse.


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