What Is Bitcoin And How Does Coinbase Work?

What Is Bitcoin And How Does Coinbase Work?

Bitcoin is growing in popularity, but it has not yet become a currency that virtually everyone is aware of. As the growth trend continues, more and more people are asking what bitcoin is. Another common question is “How does coinbase work?” Today, I’ll answer those questions.

What Is Bitcoin?

As mentioned above, while bitcoin is becoming more and more popular, there are still plenty of people that are unaware of just what it is. If you’re one of those people, you are not alone. In the simplest of explanations, bitcoin is a currency, much like the euro, dollar, or pound. It can be earned, purchased or spent, just like any other currency.

However, understanding what bitcoin really is means that you have to go a bit deeper than the simple explanation. Bitcoin is a virtual currency. There is no paper or metal used in the printing of it. Instead, it lives in the internet. The currency was designed as a decentralized alternative to today’s centralized currencies. Instead of a central bank doing what they can to maintain the perceived value of the currency, bitcoin is essentially run by mathematical equations that keep a massive ledger known as the blockchain. This is where transactions are validated. Interestingly enough, the system works overwhelmingly well, making bitcoin one of the most secure, yet anonymous currencies in the world!

You may be wondering “are bitcoins traceable?” The answer is largely no! Because of the fact that bitcoin lives in privately held virtual accounts and is not a centralized currency, it’s nearly impossible to trace what is happening with regard to the currency.

However, bitcoin is becoming more than a currency in and of itself. Instead, the cryptocurrency is becoming a commodity. Investors are starting to use the currency as a safe haven against declines in their local currencies, and many are simply buying bitcoin just to hold it and enjoy the value growth that is being seen.

Can Bitcoin Split?

Because of the popularity surrounding bitcoin, many are starting to ask “Can bitcoin split?” After all, those looking to get involved in the industry see a price of more than $4,000 and cringe at spending that much money in the first go around. Well, bitcoin can split. So, you don’t have to purchase an entire coin right off of the bat.

What Is Coinbase?

If you’re digging into bitcoin, you may have already come across what is called Coinbase. If you haven’t yet, you will. One of the biggest questions is “What is Coinbase and is Coinbase legit?” Coinbase is a virtual wallet. In many ways, it works like other virtual wallets on the web today. In fact, it could easily be compared to PayPal, Google Wallet, and the likes. However, there is one key difference between these alternatives and Coinbase. That is the fact that Coinbase’s claim to fame was instead of using your debit card or credit card to deposit funds into the wallet, Coinbase essentially runs on bitcoin.

How Does Coinbase Work

When you buy or mine bitcoin, that bitcoin needs to be held somewhere. This is generally done through some form of broker. However, what happens when you want to turn that bitcoin into cash? Well, that’s where Coinbase comes in. When you send your bitcoin to your Coinbase account, Coinbase automatically puts a sell order on the bitcoin. From there, the bitcoin is sold and converted into your local currency, accessible through Coinbase. This money can be spent online or you can cash it out and send it to your bank account, whichever you prefer.

Final Thoughts

Well there you have it, these are the basics of bitcoin. Bitcoin works much like any other currency with the major difference being that it is not centralized. Through Coinbase, your bitcoin can be turned into the local currency you use every day. Now, it’s time to dig into your research to learn how bitcoin can be used to your advantage.

This article was written for marketing purposes and does not constitute investment advice. The information in the article represents the general views of our experts and does not take into consideration the personal circumstances, investment experience or financial situation of any reader.

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