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Bitcoin: Everything You Want to Know

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Bitcoin: Everything You Want to Know

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Bitcoin was the world's first cryptocurrency and it has inspired a host of imitators. Some view cryptocurrencies as a rebellion against the state's control of money; some see it as an investment opportunity; while others use it pragmatically as an international payment instrument; and of course, some think of Bitcoin as the inspiration for better, more modern cryptocurrencies, such as Ethereum. How did Bitcoin come to be? Why is it absolutely necessary for some people? How does it make a profit? Where and how can you buy it? How do you store it safely? Where can you use it as payment? We'll answer these and many other questions in this article.

What Do You Know About Bitcoin?

  1. Virtual Currency vs. Cryptocurrency? What's the Difference?
  2. What is Bitcoin?
  3. The Extraction and Creation of Bitcoins
  4. The Bitcoin Transaction Process
  5. How Do You Get Bitcoins and How Do You Buy Bitcoins?
  6. How Do You Pay for Bitcoins?
  7. How Do You Extract Bitcoins?
  8. How Does a Bitcoin Wallet Work?
  9. BTC and EUR - Which is the Better Price?
  10. Major Risks Associated with Bitcoins
  11. Bitcoin: The First of Many
i Don't miss the following:
  1. How does Martin Šíp see the future of Bitcoin?
  2. What does Bitcoin decentralisation mean?

Virtual Currency vs. Cryptocurrency; What's the difference?

Bitcoin is the primary representative of the new cryptocurrencies. These are a subset of virtual currencies - let's first explain these terms.

A virtual currency is a denomination for a currency that is created electronically and also circulates only in a virtual form in the computer world. It does not have a cash component. Virtual currencies can exist as a means of shifting values in a closed economy. A good example is the "Virtual Gold" used in the popular game World of Warcraft. Virtual currencies can also function as a universal payment to purchase real goods and services. We now get to the specific subset of virtual currencies that are relevant for us.

As the name indicates, a cryptocurrency, is a type of virtual currency which is based on cryptography. Due to the incomprehensible combination of several technological and economic processes (asymmetric key pairs, blockchain transactions and Proof-of-Work), they cannot be decrypted or controlled by any central authority. Secured currencies are already being used to buy real goods and services. Other characteristics of the cryptocurrencies are transparency, a predefined maximum number of units to be issued, and the inability to cancel the payment. The number one cryptocurrency is Bitcoin. Other well-known cryptocurrencies include Ether, Litecoin and Monero.

What is Bitcoin?

Bitcoin is the most widespread cryptocurrency. It was created in 2009 by a programmer (or a group of programmers) operating under the pseudonym of Satoshi Nakamoto. Bitcoin allows you to make instant payments to anyone in the world. No bank account or registration is required. You only need to download one of the many Bitcoin wallets. Global payments are made possible through peer-to-peer technology that works without any central authority. Managing transactions and extracting (mining) this virtual currency is done collectively within a decentralised database, a so-called "blockchain". Although Bitcoins are in no way printed or stamped, they are often referred to as coins, and a one Bitcoin unit is 1 BTC. In short, bitcoins are full-value internet money. Some important thinkers are sure it will be the money of the future.

What is Bitcoin?

and Peer-to-Peer
A peer-to-peer network, also known as a p2p, is a computer network in which clients communicate directly and without the need of a third-party intermediary.

Bitcoin as a Deflationary Currency

The total number of Bitcoins will never exceed 21 million. This is not a vague developer's promise, but a limit that has been embedded directly into the Bitcoin protocol. The protocol is the set of rules that defines what Bitcoin is. The observance of the protocol is controlled by a decentralised network of so-called nodes. Any computer that connects to the Bitcoin network is called a node. Nodes that fully verify all of the rules are called full nodes. There are over 10,000 of these nodes in the world.

Although the total number of bitcoins will never exceed 21 million, the number of bitcoins in circulation will actually be lower and is likely to decrease. Some estimate that already about 4 million have been lost (they are called "burned" bitcoins). This number is likely to grow due to the careless handling of private keys. Bitcoin thus represents a deflationary currency - a currency in which the number of units in circulation decreases over time.

In practice this decrease in the number of Bitcoins implies that the value of individual Bitcoins will probably increase, and the number of coins needed to buy goods will decrease. The average transaction size will decrease and may need to be expressed in bitcoin sub-units, such as a Milibit (0.001bitcoins) or a Satoshi (the lowest unit representing one hundred millionth of a single bitcoin).

Bitcoins are not dependent on any state nor monetary authority. This is the basic pillar of its credibility. Owners know that the value of bitcoins will not be weakened by an expansionary policy or so-called quantative easing done by a central bank.

i If the aforementioned explanation were to be read by an economist, he or she would certainly find it rather "elementary". If you want to read a more explicit explanation, expand the bookmark below. We will explain how standard currencies differ from virtual ones. We will also discuss what consequences a fixed amount of money may have on its value and its price stability.

Does Bitcoin Pose a Risk to the Economy?

"Fiat lux" were the first words spoken by God according to Genesis. God created light from nothing. It is therefore appropriate that current currencies are called "fiat money". The central banks, like God, create money from nothing. This is not possible in the case of Bitcoin and many other virtual currencies. But is it as advantageous as we think?

Common Currencies vs Bitcoin

Central banks should have price stability as their main objective. When inflationary pressures arise, a central bank will immediately begin a restrictive policy to reduce the money supply (usually through an increase in interest rates). Deflationary tendencies in the economy will result in an easing of control, often through a lowering of interest rates. Ideally, the value of a currency does not change over time and, if so, only in a pre-announced manner (the so-called inflation target). However, the mechanisms controlling virtual currencies are different. In particular, there is no central authority that can influence the money supply. Cryptocurrencies are similar to commodities such as gold or silver in the way they are released. Instead of being issued by a central monetary authority, cryptocurrencies are "mined" by users. Just like minerals, the total amount of cryptocurrencies is usually limited.

What does this mean in practice? Virtual currencies tend to be more volatile and, yet at the same time, if demand continues to grow, their value will also grow. Here we are talking about deflation in terms of currencies. This is a great news for investors. It is however not good news for the daily so-called transactional deals. Why do modern economists hate deflation so much? In a nutshell - people will postpone purchases because they expect prices to fall even futher. This in its turn, is detrimental to entrepreneurs. Deflationary pressure also increase real staff costs and companies are forced to either lay off staff or reduce wages. It turns into an unhealthy downward spiral for the economy.

Bitcoins; A Risk Mainly for Investors

Bitcoins are primarily seen as an investment opportunity. As long as you cannot buy basic supplies such as food or use it to pay taxes, it will stay that way. Investors should however be particularly alert though. They should not forget that despite the steady growth in value in recent years, Bitcoin is still a risky investment. They can increase exponentially for a period, but the fairy tale can turn to a nightmare when the value suddenly disappears down a virtual black hole.

Bitcoin News - What Happened to the World's Most Popular Virtual Currency?

We have to get used to the stormy high seas of the world of virtual currencies. The seas will never remain calm for long. Bitcoin, as the most popular and most used cryptocurreny, represents the trend. Bitcoin is constantly voluble, growing and developing at such a pace that few can keep up. We'll attempt to bring you the most important news and updates here below.

Bitcoin News and Updates

The First Customers Get Their Hands on Dragonmint Miner! - 06.04.2018

When Halong Mining first announced the development of anew type of Bitcoin mining equipment which included a new generation of ASIC chips, it was received with a note of mistrust and scepticism. Now that the ASIC chip named DragonMint has actually gone out to the first subscribers, it is more than clear that it is not just a cheap trick! In terms of computing power, DragonMint offers 16TH/s, while its competitor, Antminer S9, offers "only" 14TH/s. In addition, the Halong Mining ASIC was first with AsicBoost technology, which was recently implemented by the well-known Mining Pool Slush Pool. Whether this miner would be any more efficient or effective than others is neither here nor there. It is more important that it is a first step towards the decentralisation of Bitcoin mining, which until now has been exclusively dominated by Bitmain and its Antminers.

Investing in Bitcoin - Will it pay off soon? - 26.03.2018

Israeli security authorities (ISAs) have classified Bitcoin (BTC) as a payment method without any form of security. Although Bitcoin is based on a highly praised and transparent technology, called blockchain, it is constantly struggling with various shortcomings that undermines the confidence in Bitcoin and other cryptocurrencies. Bitcoin did not even bother to report the fact that in the past two months it has failed to apprehend or identify the hackers who have stolen a record volume of NEM Tokens. To date, Twitter (as well as Google and Facebook) has enforced a ban on ads for any financial service dealing in cryptocurrencies. The world of cryptocurrencies has experienced a really heavy loss of support in the last month and a half. It is difficult to forecast whether it can bounce back completely.

Bitcoin's Value Is Still Decreasing and the World of Cryptocurrencies Is Shaken to the Core - 16.03.2018

This week, the world of cryptocurrencies has experienced a real shock when Google informed the public of its blanket ban on financial service advertisements that offer the possibility of investing in any cryptocurrency. Following this announcement, the price of all cryptocurrencies dropped dramatically. Recently, the social network, Facebook, has also come up with the same ban. It will be impossible to see any sponsored posts with a similar offer. The bitcoin price is currently slightly above $8000 (USD) per coin. Some experts think that it won't get any worse, but others say that we are witnessing a gradual deflation of the speculative bubble that has been created around Bitcoin.

The Volume of Bitcoin Transactions Has Reached a Two-Year Low - 06.03.2018

The weekly average of the number of confirmed Bitcoin transactions per day, according to blockchain.info, reached its lowest level since March 2016, when the BTC price ranged between $400-450. This was despite the fact that Bitcoin deals are currently the cheapest for the last few months. In this critical week, the average fee even fell below $2.5. Of course, these events also reflect to a large extent the decreasing value of Bitcoin that has been failing to return to the astronomical highs of last year. Many sceptics perceive this event as the beginning of Bitcoin's end

The Senate in Arizona Has Passed a Draft Bill on Paying Taxes in Bitcoin - 13.02.2018

In February, the State Senate of Arizona, the sixth largest state of the United States, passed a bill which allows the residents of the state to use Bitcoin to pay taxes. The bill must still pass other hurdles, but the acceptance of payments in Bitcoins would seem to be a matter of course. Other forms of digital money, which must first be recognised by the competent state authorities, will follow. A Bill of Law, No. 1091, is winding its way through the committees of the lower house of the Congress of the United States, where it is currently deciding on its final form. Arizona, after legitimising digital signatures and smart government contracts, is sending the world a further signal that it will offer the best possible conditions for the development of blockchain technology and its cryptocurrencies in the future.

Coincheck, a Bitcoin Exchange, Under Attack - 28.01.2018

Japan's largest Bitcoin Exchange Coincheck, an inter-coin exchange which also handles many other cryptocurrencies (ETH, LTC, XMR) came under massive attack by hackers. Although no bitcoins (BTC) were stolen in the attacks, it is the largest recorded robbery of digital currencies in history. Hackers targeted the tenth most valuable crypto-currency, NEM and stole $534 million of coins. We can only speculate if it would be possible for these funds to be returned to the original owners. It is however clear that it had greatly undermined the credibility and security of the entire digital currencies sector.

The Cryptocurrencies, Headed by Btc, Experienced a Significant Fall - 22.12.2017

Bitcoin reached a new historic high when several coins were sold for just under $20,000 on several major exchanges. For the next six consecutive days however, the BTC never ended in green numbers again. The drop in price eventually stopped at $11,200. Within a week, Bitcoin lost about 40% of its value. Together with Bitcoin, other cryptocurrencies also weakened in the weeks before Christmas. Some like ETH, bitcoin cash (BCH), litecoin (LTC) and iota (IOT) experienced a drop of more than a quarter of their value.

Hackers Stole a Huge Number of Bitcoins - 09/12/2017

A major crypto-mining marketplace, NiceHash, came under attack on the night of 6 December. Professional hackers had taken advantage of a gap in security at one of the corporate computers and attacked a virtual wallet. They stole bitcoins worth almost $1.5 billion. The NiceHash attack was confirmed on its Facebook page and it temporarily suspended all its activities. There are no reports yet as to how the situation will be further addressed, but due to the nature of transactions in the block-chain network, it is very likely that the Bitcoins are already irretrievably lost.

One Bitcoin for $11,395 - 30.11.2017

Bitcoin has experienced another historic milestone. After a period of rapid growth, the value of BTC has reached a new historical high of $11,395. It is hard to believe that only a few hours after reaching this zenith, the Bitcoin rate has dropped to $8,092. This is almost a textbook example of how extremely volatile the Bitcoin currency can be.

Bitcoin Reaches Record Values - 31.10.2017

At the end of October, Bitcoin reached its highest historical value, at $6400. Its value increased to $7459 over the following week. This huge increase in the value of Bitcoin is associated with one of the world's largest stock exchanges, CME which said in a statement that it would engage in trading in the most popular cryptocurrencies of the world by the end of the year. The CME will be trading in Bitcoin in the form of so-called futures contracts (bitcoin futures).

A Further Split in Bitcoin and the Emergence of Bitcoin Gold - 24.10.2017

Less than two months after Bitcoin Cash, the Bitcoin Network has been split even further, resulting in the emergence of a new cryptocurrency, called Bitcoin Gold. This hard split, as well as the previous one, was initiated and controlled by a group of miners, without any form of voting. The main impetus for the emergence of the new cryptocurrency has been the concern of miners that the current Bitcoin mining system has become too centralised and is monopolised by several of the largest mining companies. This monopoly needs to have special ASIC chips, which make Bitcoin extraction extremely difficult. This is not to the advantage of ordinary users. For that reason, Bitcoin Gold has adopted several new algorithms that allow for fair mining, using GPU. The Bitcoin Gold value is at $250 as of November 13, 2017.

Continuing Efforts to Regulate Cryptocurrencies - 09.10.2017

Not long after China began regulating Bitcoin and other cryptocurrencies, similar news emerged from Europe. The European Central Bank (ECB) has even issued an official statement about the need to introduce legal restrictions on cryptocurrencies.

The ECB's statement is a response to the worldwide trend of creating new, unique cryptocurrencies for profit. Only this year, companies have earned about $1.25 billion from their own cryptocurrencies from investors. However, according to the ECB's senior governor and the governor of the Austrian central bank, Evalda Nowotny, these cryptocurrencies that have been created for investors are highly untrustworthy and dangerous. This is especially because the market of virtual pay-outs is often unclear and it is not known exactly who is responsible for their release. Another reason for distrust, is that this type of funding is easily misused by fraudsters or even terrorists.

The key question however remains whether the regulation of the cryptocurrency systems is even within the competence of the European Central Bank or not. Several weeks ago, Mario Draghi, the President of the ECB, stated that he was in fact not in a position to ban or otherwise regulate Bitcoin and other cryptocurrencies on the market.

China Has Recently Shaken up the Bitcoin Market - 25.09.2017

China is undoubtedly the largest market for the Bitcoin trade. Many other cryptocurrencies operate in China and in fact, the largest group of miners is in China. Any reports on regulation or a possible ban on the use of virtual cryptocurrencies in this country can thus significantly shake the BTC. And that's just what happened recently.

The first disturbing bit of information that came from China concerned the ICO (Primary Coin) regulation. China banned individuals and organisations from raising funds through the ICO. The ICO is used to publish new cryptocurrencies that funds various projects, like the kickstarter platform.

Subsequently, reports have emerged that the Chinese government has decided to completely stop trading with cryptocurrencies in the country. This was confirmed by the most important Chinese Bitcoin stock exchanges (ViaBTC, BTCChina, OkCoin, Huobi). As a result, the value of Bitcoin value dropped by up to 30%. The events in China have been accompanied by much speculation and many false reports that were probably created to artificially reduce the value of Bitcoin and hence the possibility that speculators could buy it cheaply.

Bitcoin or Bitcoin Cash? - 04.08.2017

The new, standalone virtual cryptocurrency, Bitcoin Cash, originated from Bitcoin as a reaction to the overloaded Blockchain database. Because it takes more computing power to add blocks to the chain, Bitcoin transactions and verifications took longer and longer to process. The delays, sometimes hours or even days, complicate payments in a virtual currency.

Existing owners of Bitcoin have earned the same amount of Bitcoin Cash. However, most of the community, and especially the larger wallets or stock exchanges, refuse to accept the new currency. Therefore, most of the currency users won't touch it either. The value of the new virtual payment will depend on market confidence and the very existence of the currency is also a big issue. If you want to dive into the issue, read our article Bitcoin vs. Bitcoin Cash!

The Extraction and Creation of Bitcoins

New bitcoins are generated on the network through the mining process. Nodes in a network are rewarded with bitcoins each time they find a solution to a math problem and thus create a new block. The reward for the block extraction is two-fold: the winner gets the newly created bitcoins, as well as the transaction fees from the transactions that he or she has put into the block and thus confirmed them as executed. Rewards in the form of newly created blocks are divided into two according to the protocol rules every four years. In 2009-2013, the reward was 50 bitcoins per block; in 2013-2017 it was 25 bitcoins; and now the reward is 12.5 bitcoins per block. At this known rate, 95% of all bitcoins will be extracted by 2025; and in 2140 the last fraction will be extracted.

It follows that miners were primarily motivated by the newly created bitcoins in the early years of the system, but over time the component flowing from transaction fees must prevail.

i Are you interested in other cryptocurrencies? Then take a look at our other articles where we focused on Ethereum (ETH), Litecoin (LTC), ZenCash (ZEN), Vertcoin (VTC), or the controversial Ripple (XRP) digital token.

The Bitcoin Transaction Process

Bitcoin enables users to send money electronically as easily as they send emails. Transactions are made through Bitcoin wallets and are provided with a special digital signature for security. At the same time, everyone in the network knows about all existing transactions, and the history of each transaction can be traced back to the very beginning when the Bitcoin was extracted. How does this work?

The first important bit of information is that bitcoins themselves do not exist physically. They only exist as records in the block of transactions and blockchain addresses. So, to send bitcoins, you only need to know two things - the public Bitcoin address of the recipient and your own private key.

The public bitcoin address is generated from a private key and is a string of numbers and letters. This address can be compared to a bank account number. The private key assigns the bitcoins to the addresses that were generated from the private key. You can post this Bitcoin address, but you should be aware that in this case anyone who sees the address can look at the balance of your account (but since they do not have the appropriate private key, they cannot withdraw bitcoins).

and

The private key, an important key term with Bitcoin, is a secret number that allows you to spend bitcoins. Each wallet includes one or more of such keys that are stored in the wallet file.

Private keys generate public keys to generate admissions through mathematical processing. Only private keys are needed to back up the wallet in case of loss or damage to the device - typically they are backed up in the form of seed phrases, which is a series of simple English words (typically 12 or 24 words) that can be read with a human eye.

Special programs called wallets are used to manage private keys. The safest form of wallets are hardware wallets, from which the private key cannot be read in any way (the private key is registered and isn't readable from the outside).

The transaction itself starts when you use your private key to sign a message that contains the input information (source transaction or more transactions that you have received the bitcoins), the amount of bitcoins that you are sending, and the output information (the public address of the recipient).

This entire message is then sent from your bitcoin wallet to the extensive bitcoin network. At this moment, the miners start working. They verify the validity of the transaction, include it in a new block along with other transactions, and then block it all up and put it into a blockchain. A blockchain is nothing more than a chain of interlocking blocks of transactions.

You always follow the number of confirmations in a Bitcoin transaction. An unverified transaction is only in the memory of the nodes but has not been exploited yet. The first acknowledgment gives information that the transaction has been listed and extracted in the last block. Further confirmation means that this block is followed by other blocks and the transaction can no longer be changed.

When sending higher amounts, it is advisable to wait for a higher number of confirmations, ideally 6 or more. The reason is that the transaction can even be part of a so-called blocked one-to-one confirmation.

i Ondřej Krško: What does Bitcoin decentralisation mean?

The British Finance Minister is preparing a second bank rescue - this is the first sentence in the Bitcoin database. In January 2009, the author, Satoshi Nakamoto, quoted this sentence to point out government interventions in the financial and banking sectors. The system Nakamoto created does not allow for such interferences to take place. It is decentralised - that is, there would be no power centre to set the rules. The rules for Bitcoin are set forever as if they were carved into stone. One such rule, for example, is that there will never be more than 21 million bitcoins. If anyone tries to change this rule, the network will reject it.

bitcoin, private key
Unlike common currencies (or any assets), Bitcoin inherited one more unique feature from cryptography, namely an asymmetric hold. It means that securing your Bitcoin against theft is far easier. Someone can steal a purse or wallet from your pocket; someone can block a bank account or record of stocks and bonds; your house can burn down; your gold stolen. You could try to protect your property of course, but there is no guarantee. To keep bitcoins, all you need to know is your private key. Try using mnemonic tools to remember your private key. Nobody can guess your private Bitcoin key. Imagine that you create one new earth for every grain of sand on Earth. Behind every grain of sand on these planets, there are 26 billion options for the Bitcoin address. That is how difficult it would be to guess a private key.

This is the first time in history where an individual can hold and protect an asset so easily against arbitrary access (theft to be precise) - from governments or the whole world. Because Bitcoin runs on open software, it was not difficult to copy or re-create the idea and create similarly functioning cryptos. But what makes Bitcoin unique is true decentralisation, which is reflected even in the absence of a leader. For example, Vitalik Buterin, the founder of Ethereum, the second largest cryptocurrency, is able to push through fundamental changes to the rules of the network at his own discretion. Buterin is in effect just such a "minister of finance". We should never forget the first sentence Satoshi Nakamoto wrote in the first block of the Bitcoin database.
On 23 April 2011, the mysterious Satoshi sent out his last message about Bitcoin, saying: "I’ve moved on to other things. It’s in good hands ...…"

Ondrej Krško

Ondrej Krško

Ondrej Krško studied Informatics at FMFI-UK and Management at City University. When he finished school, he was involved with the founding of the Obedovat.sk project, which was sold for EUR 2.44 million to Zomato after 6 years. In 2010, ZlavaDna.sk created the project. After 2 years of operation, he was awarded the Deloitte Technology Fast 50 and is number one on the Slovak market. For the past four years, he has been working on the ReFIS system, company budgeting software, cashflow management, controlling and electronic document approvals. Currently, he is employed by more than 200 companies and has the dream to become the most innovative ERP in the world. ReFIS is the first ERP in the world with full support for Bitcoin and other cryptos.

How Do You Get Bitcoins and How Do You Buy Bitcoins?

Bitcoins can be obtained in several ways:

  1. Sale of goods or services for bitcoins.
  2. Conversion through bitcoin wallets.
  3. Change bitcoins for the national currency at a bitcoin exchange.
  4. Buy bitcoins through bitcoin vending machines (ATMs) throughout the UK and Europe.
  5. Personally, find someone who will exchange bitcoins with you through a local directory.
  6. Start mining bitcoins.

You can buy Bitcoin in three ways:

  1. At a bitcoin exchange or on the stock exchange.
  2. At BTC ATMs.
  3. Acquire bitcoins in person.

The first condition for buying bitcoins is to have an active bidder wallet set up (for more information, see "How does a bitcoin wallet work?"). Learn how to buy bitcoins in the following chapters.

Purchase of bitcoins at the exchange or the exchanges

You can buy or sell bitcoins for euros or dollars with the help of many services, such as CoinMate.

However, it is worth pointing out to the reader that cryptocurrency exchanges are often the target of hacker attacks. It is therefore strongly recommended that you do not keep funds for longer than absolutely necessary on stock exchanges. Always remember: if you do not have your private keys, you have no control over your cryptocurrency!

i What is a Bitcoin exchange or a stock exchange?
It is an online trading platform to buy and sell bitcoins and other cryptocurrencies. Exchange offices allow instant and simple money transfer from and to cryptocurrencies. Stock exchanges offer a more advanced interface with graphs. They limit orders and offer leveraged trading.

The Purchase of Bitcoins at BTC ATMs

It is very convenient to buy bitcoins using bitcoin vending machines or ATMs, which are located in several cities. It is basically a cash bitcoin currency exchange. You buy or sell bitcoins from the slot machine. These are then attached to your bitcoin wallet. A detailed map of bitcoin vending machines can be viewed at Coinatmradar.

bitcoin ATM at Alza

Personal Purchase of Bitcoins

The latest and also the most risky way to buy bitcoins is to personally find someone who exchanges bitcoins with you through your local directory or bitcoin wallet (a small transaction fee is charged). The localbitcoins service, which associates users with the direct exchange of bitcoins, will make it easier for you to find counterparts who will exchange bitcoins with you.

How Do You Pay for Bitcoins?

If you buy ordinary consumer goods and decide to pay with bitcoin, it is not complicated. First, the amount will be converted to bitcoin at the checkout then you make a transaction through a smart phone using the QR code you have loaded. However, it is necessary to have a bitcoin wallet with a balance that is sufficient and to have access to the internet.

Bitcoin accepted, Subway bitcoin, subway

You can now you also pay with bitcoins at Alza! A partner company of Alza is operating a payment gateway for BTC payments. This is Bitcoinpay.

You Can Spend Your Bitcoins On Alza

Bitcoin has been growing in popularity in recent years. That's why Alza has met numerous customer requests and introduced the possibility to pay for purchases with this most popular cryptocurrency. Want to know more?

Bitcoin

Where and How to Pay with Bitcoins

Alza has now again proved that it is not afraid to be a trendsetter in an entire segment. You can use Bitcoin as a payment at Alzashop.com but also at Alza.co.uk, Alza.de, Alza.at, Alza.cz and Alza.sk.

A payment using Bitcoin is more convenient and faster. The partner company operating a payment gateway for BTC payments, is Bitcoinpay.

Look out. Bitcoin is just the beginning, and you'll soon be able to pay on Alza using other cryptocurrencies, such as Litecoin or Ethereum.

Virtual Currencies and Bitcoin in Brief

The Internet has given us, among many other unplanned delights and horrors, a new concept of money, namely virtual money. The value of this virtual money has been overlooked for a long time. The traditional focus of their application lay in online games where they were used to trade game items. Nevertheless, the virtual currencies used in digital services and Internet communities are becoming increasingly more important. The term "cryptocurrency" is then a specific subset of virtual currencies. The first such currency was Bitcoin which was created in 2009.

Why are Bitcoins so popular? Many factors account for this. It is a so-called deflationary currency, among other things. The number of Bitcoins is predetermined, so no central bank (or other entity) can devalue the currency by creating (printing) additional money. The creation of a new Bitcoin is transparent - users become "profitable" with the help of computers. It is said that all "coins" will be mined in 2140. You can also benefit from downloading the relevant software.

Buy or Sell Bitcoin with BTC

Besides the possibility of paying for purchased goods by transfer, Alza has also introduced BTC ATMs. These are basically Bitcoin currency exchanges. Here you can buy or sell Bitcoins according to the current value. These are then attached to your wallet. You can then apply this "credit" to purchases not only with us, but also everywhere else. Alternatively, you can keep your Bitcoins as an investment and bet on the future increase in their value.

Bitcoin ATMs can be found in our central showrooms in Prague and Bratislava. These facilities are run by GENERAL BYTES sro for Alza.

Secure Shopping with the Trezor Bitcoin Wallet

Alza also offers a new TREZOR hardware wallets. It serves for the safe storage of bitcoins. Its main plus is absolute protection against theft of your bitcoin account. Bitcoins are physically stored in an encrypted vault, so they can not be remotely alienated.

Alza Introduces Payments in Bitcoins - an Interview with Jan Sadilkem

The introduction of payments in Bitcoines is a significant innovative step. We have prepared answers for you on the most important questions that are relevant to the topic. Jan Sadlikem, Head of the Internet Marketing Department, answered us.

Why did you choose to accept Bitcoin payments?

Our customers have asked for it. Alza is a technology company that has long been following trends and Bitcoin is a progressive technology. This step is to meet its potential and give the benefit to our customers.

Why do people want to pay with Bitcoin?

It is an increasingly popular form of payment for goods and services. Customers have spoken to us for a long time, but now, with the growth of Bitcoin's value, interest has grown steadily. That is why we began to think about introducing it.

What benefits will Bitcoin pay to your customers?

First of all, the rate of payment is comparable to the speed of other online payments along with its simplicity. Another reason for the huge popularity of Bitcoin payments is the ability to pay online even if you do not have a bank account or credit card.

Why did you decide on Bitcoin and not another of the cryptocurrencies?

Bitcoin payments currently account for more than 90 percent of cryptographic transactions. Of course, we are also preparing for the acceptance of others, such as Litecoin, Ethereum, Dash and others.

Is Bitcoin trading in line with Czech legislation?

The way we trade with Bitcoins is in line with Czech legislation. Payments by virtual currency are triggered by customers, because we believe they will become more popular in the future.

How about Bitcoin and taxes?

Bitcoin is only the method of paying for goods, so the tax payment mechanism is the same as in any other transaction.

How is security guaranteed?

We process payments via the Bitcoinpay.com payment gateway operated by Confirmo Ltd., a British company that has many years of experience in receiving Bitcoin.

Which other companies accept payment in Bitcoin?

The big ones are Microsoft, Dell, T-Mobile Poland, WordPress, and Wikipedia. And, of course, a huge number of smaller merchants.

Can the customer save money with Bitcoin?

Definitely! For example, a customer who bought Bitcoins a few months ago will save more than 30 percent of the price at the current rate.

How Do I Pay with Bitcoins on Alza?

  1. Place the selected goods in the basket.
  2. Choose the type of transport.
  3. When selecting a payment, select BitcoinPay in the online payment category.

At the end of the order, you will be redirected to the contractor's payment gateway to complete the order. The pay-as-you-go principle works within minutes.

How Are Bitcoins Extracted

In the first years of Bitcoin, graphics cards were used to mine bitcoins. Now you need special hardware in the form of ASIC chips. The chips need a considerable amount of computing power and you also have to take into account that acquiring high-quality ASIC chips is not cheap. Software for mining is freely available for downloading from the Internet though. Many different platforms are available.

bitmain, bitcoin miner, antminer s5

Individuals hardly make a dent in this process and since it is virtually insignificant for individuals, it is advisable to be part of an association of miners. Each miner will then receive a portion of the reward in correspondence to his or her contribution to the mining effort. These associations are also referred to as "mining pools" and are usually subject to a regular monthly fee. If you are just looking for a way to start mining cryptocurrencies, try our simple but detailed tutorial - How to mine cryptocurrencies with Simplemining.net.

How to Start Mining Bitcoins

If you are going to start mining Bitcoin, here is a simplified guide on how to do it:

  1. Select a dedicated ASIC mining device according to your financial options. Bitmint's Antminers are among the ones most used. The cost of these devices is based on the computed performance (H/s). You can choose here.
  2. Download freely available bitcoin mining software. The most popular bitcoin mining programs include CGminer, Bitcoin Miner, DiabloMiner and BFGminer.
  3. The maximum profit can only be achieved by joining an existing pool of miners. There are several to choose from. It is important to know at an early stage how much you are to pay towards the group fees and what rewards you can expect for your part of the mining. The best-known pools working on European servers - BTC.com and Slush pool. The world's first well-known mining pool, originated in the Czech Republic.
  4. As a reward for mining, of course, bitcoins will be coming to you. For this reason, you must have the active software or hardware bitcoin wallet installed. Choose a software wallet here.
  5. The last and most important task, is keep yourself informed as best you can, about every item of news from the bitcoin world.

How Does a Bitcoin Wallet Work?

The end user will find that keeping bitcoins is not as complicated as mining bitcoins. Such a user needs to send, save, and especially pay with bitcoins. For this, you need a bitcoin wallet installed on your computer or smartphone.

The wallet generates a unique address, and it works like a bank account number. Payment is made by entering the required amount (in bitcoin rate or a national currency) and the recipient's address. This transaction will be carried out in a transparent manner throughout the network until the receiver finally confirm it. With this final confirmation, the entire network of participating users will learn about the transaction. A fee is charged for the payment that has been made. The current average charge for the transaction being processed can be seen on bitinfocharts. The amount charged changes over time in line with higher network usage (as of December 2017) and transaction fees may be in the tens of dollars. To solve this problem, a scalable solution is being introduced in the form of a mimoblock chain transactions, called the Lightning network.

bitcoin wallet graphic

The safest way to keep bitcoins safe for the long-term, is to have a hardware wallet. They allow bitcoins to be kept under surveillance and safe from attacks by hackers. If you want to make a payment from a hardware wallet, you need to confirm your private key outside the PC with multiple levels of authentication.

Btc and Euro - Which Is the Better Price?

The price of Bitcoin fell dramatically and it has seen constant fluctuations. But of course, it also grew to almost dizzying heights. Forecasts are such that, given the deflationary nature of the currency and its ever-increasing popularity, the price for one coin will rise even higher. You can see the current rate (EUR) and its evolution over the last few months on the interactive chart below.

Start Mining and Get Free Bitcoins

Bitcoin extraction can be difficult even for a knowledgeable user, and not everyone has enough money to invest in bitcoins. But the internet does offer the possibility of getting virtually into bitcoins and trying to manipulate this virtual currency.

Sites where you get free bitcoins usually require some form of registration (usually just the email address and address of the Bitcoin wallet). You may ask yourself why anyone would give away something for free. Of course, it is not a charity. The high number of users means these sites have high traffic and that in turn attracts a lot of advertisers. You can try for yourself. Use freebitcoin or moonbit. Just a few clicks, and the bitcoins in your wallet will start increasing with very small amounts.

Major Risks Associated with Bitcoins

Although the entire Bitcoin network and the Bitcoin itself is safe in that the level of cryptography behind them has not yet been broken, there are risks associated with Bitcoin. What are these?

  • Extremely high fluctuations in Bitcoin value. The value of Bitcoin may change by as much as ten percent even within a few days. However, it is necessary to point out that Bitcoin offers at least some stability in comparison to other alternative cryptocurrencies. It has even been criticised as being a "certainty" and a conservative choice!
  • The inability to cancel the specified payment. Once the payment is sent, there is no way to cancel it.
  • If you do not know the identity of the recipient, you cannot claim the bitcoins back if you made a mistake, by accidentally typing the wrong wallet address for example.
  • If you lose a Bitcoin wallet and you have no backup, it means you'll have lost all your saved bitcoins.
  • The inability to reset the password on an encrypted private key. Losing the password means the loss of all bitcoins.
  • Bitcoin is often part of illegal activities, especially on the dark web.

Last but not least, the number of hacker attacks targeted at Bitcoin exchanges and exchange offices also puts many people off. The biggest hacker attacks in history include the robbery of the Japanese Mt. Gox and Coincheck, where the damage was in the hundreds of millions of dollars.

i How does Martin Šíp see the Future of Bitcoin?

For years, Bitcoin has been a throbbing organic growth and an example of the spontaneous evolution of the socio-technological phenomenon of money, the likes of which we have never ever experienced. It is a privilege to have the chance to observe and live with this growth from within. What Bitcoin is and what it means to society, we will only discover in the coming decades. This is similar to the phenomenon of the Internet and the comparison makes sense, since the internet grew in unexpected and unforeseen ways. As the Bitcoin evangelist, Andreas Antonopoulos said: "Bitcoin is not money, Bitcoin is the Internet of Money!"
bitcoin, virtual currency Is everyone panicking?
Many people only heard of cryptocurrencies last year when the media could not stop talking about the phenomenal rise in their prices. The total market capitalisation for the cryptocurrency market has exceeded 跌 billion. Bitcoin and its derivatives are traded on official world stock exchanges. Then, at the beginning of 2018, when Bitcoin's price fell by a third, the media turned on it and talked about the bursting of the Bitcoin bubble. Many people who had bet on Bitcoin without a deeper understanding of it, now panicked. I would like to put this into a wider context. bitcoin, historicky vyvoj
Bitcoin is not a random discovery. It is the culmination of a long search for independent digital cash that began with the development of the Internet and cryptography 30 years ago. It changed and is still changing our perception of what money is and what it can be. For the first time in human history, Bitcoin allows for digital ownership of money without an intermediary. Just as gold once aspired to be the first global currency in a physical world where geographical state boundaries were transcended, Bitcoin aspires to become the first global digital money that overcomes the divisions of the traditional national states. Personally, I have been studying and watching Bitcoin and the development of its decentralised ecosystem since 2011, and I have not encountered any major obstacles that might halt its further adoption. Nassim Taleb, who coined the antifragility concept, said the following about Bitcoin in 2013: "Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative." I am convinced that in the next two decades, Bitcoin will replace the money monopoly that nation-states are still trying to impose on all of us.
bitcoin
Due to its decentralisation and openness, Bitcoin is an example of a robust ecosystem that keeps growing and evolving by adapting to crisis after crisis which does not destroy it, but rather strengthens it and prepares it for bigger and greater challenges in the future. Bitcoin experienced a much larger crisis in the past, as well as much higher price fluctuations, as can be seen from the long-term graph of the Bitcoin price in a logarithmic, i.e. proportional expression. Wild growth periods, alternated with fall and subsequent disillusionment, are typical of it. All this is borne out by the long-term exponential development of the ecosystem, which is perceived and appreciated especially by those who focus on more than just the short-term price. I expect the long-term growth trend to continue. I estimate that today we are between 1% and 5% of the final adoption of Bitcoin.
bitcoin. graph
What can be Expected from Bitcoin in the Current Year?
First of all, Bitcoin needs to repay the big technological debts of the past years: In August 2017, the adoption of the so-called Segwit took place to resolve long-standing disputes over the further scaling of Bitcoin, hampering its ability to increase the number of transactions. This has freed the hand of Bitcoin developers to start developing the so-called Lightning Network, a decentralised Bitcoin Overlay Transaction Network, which will allow for an unlimited increase in the number of Bitcoin transactions and instant payments with phenomenally low fees. Technically savvy users can now test the Lightning Network, which is currently in the beta phase. I expect it will become available for common users and be adopted by Bitcoin payment services in the second half of 2018. I cannot begin to imagine which revolutionary applications and services can be built on the Lightning network. Let's not be caught off-guard! Think now about the consequences of this amazing technology.
Martin Šíp

Martin Šíp

Martin Šíp has been actively involved in Bitcoin since 2011, and in 2014, he started working on the launch of SatoshiLabs, the company that was first to bring a bitcoin hardware wallet (TREZOR) to the market. Between 2014 and 2017, he organised more than 130 lectures (Bitcoin meetings) for Bitcoin fans and other cryptocurrencies at Parallel Polis in Prague. He also a frequently comments about cryptocurrencies in the Czech media.

Bitcoin: The First of Many

Bitcoin is just the beginning. According to the Bitcoin evangelist, Andreas Antonopoulos, Bitcoin is "the Internet of Money" and an important milestone in human history. Bitcoin has launched a new cryptocurrency industry, which has already produced more than a thousand other cryptocurrencies. Most of these will die on the spot, some will be an interesting blind alley, and others will offer interesting innovations such as fully anonymous transactions, smart contracts, or DAO organizational structures. Many of these so-called altcoins are still exploitable with the help of graphics cards and some are even available for domestic mining.

i Do you need to find out more? Then check out the Bitcoin Wikipedia page or the official site of the Bitcoin currency.

bitcoin, litecoin, ethereum

How are the different cryptocurrencies doing at the moment? You can find out from this table which lists the current rates.

Every day you read about this or that cryptocurrency that has achieved a higher rate of appreciation than bitcoin. Bitcoin just paved the way for all of these other currencies. It is still the best-known cryptocurrency in terms of history, number of nodes, volume of transactions and the number of quality developers. It remains the cornerstone of a new industry, and represents a sure bet in the arena of cryptocurrency-mania.

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