Introduction:
When I first entered the digital world, cryptocurrency felt completely out of my reach. It was confusing, and working with it seemed too difficult. In the beginning, I even got scammed by some companies because I didn’t understand it well.
But gradually, I kept learning, exploring, and understanding how cryptocurrency and blockchain actually work. Today, I can confidently say that I understand it clearly.
If you want to enter the crypto world, you must first have a basic understanding of how it works, its components, and the risks involved. Without this foundation, it’s easy to get confused or misled.
In this article, I will explain everything about cryptocurrency and blockchain in simple, easy-to-understand language, so beginners can grasp it and start their journey safely.
1. What is Bitcoin?
Bitcoin is a digital currency that exists only on the internet. You cannot physically touch it. It was created in 2009 by an unknown person or group called Satoshi Nakamoto.
- Bitcoin is decentralized: No bank or government controls it.
- Thousands of computers worldwide maintain the network and validate transactions.
Bitcoin allows people to send and receive money directly over the internet without a middleman.
2. Who Decides Bitcoin’s Price?
The price of Bitcoin changes constantly and depends on demand and supply:
- If more people want to buy Bitcoin, the price goes up.
- If more people sell Bitcoin, the price goes down.
No single person or organization decides its price. This is why Bitcoin’s value is volatile.
3. What is Mining and Who are Miners?
Mining is the process of verifying Bitcoin transactions using powerful computers.
- People who do this are called miners.
- Miners solve complex mathematical problems to confirm transactions.
- As a reward, miners receive newly created Bitcoins.
Mining helps keep the Bitcoin network secure and trustworthy.
4. Who Can Become a Miner?
Anyone can become a miner if they have:
- A powerful computer,
- Access to electricity,
- Technical knowledge.
Today, mining is highly competitive, and large mining farms dominate the field.
5. Bitcoin’s Early Value
- 2009: Bitcoin had no real value.
- 2010: 10,000 Bitcoins were used to buy two pizzas.
- 2016: Bitcoin’s value reached a few thousand rupees.
Today, 1 Bitcoin can cost tens of lakhs of rupees, depending on the market.
6. Dogecoin vs Bitcoin
- Bitcoin is the first cryptocurrency.
- Dogecoin was created in 2013 as a joke by Billy Markus and Jackson Palmer.
- Dogecoin became popular later and now has significant value.
They are different cryptocurrencies with different purposes.
7. SHA-256 and Litecoin
- SHA-256: A cryptographic algorithm used by Bitcoin for security and mining.
- Litecoin: Created in 2011 by Charlie Lee, Litecoin is faster and cheaper than Bitcoin, but works on a similar principle.
8. Smart Contracts
A smart contract is a computer program stored on a blockchain.
- It runs automatically when certain conditions are met.
- No middleman is required.
- Example: Paying someone automatically once a project is completed.
9. Ethereum and Tron
- Ethereum: A blockchain platform created by Vitalik Buterin in 2015. It allows smart contracts and decentralized applications (dApps). Its cryptocurrency is ETH.
- Tron: A blockchain platform created by Justin Sun in 2017 for dApps. Its cryptocurrency is TRX.
Both platforms allow developers to build applications without a central authority.
10. What is Blockchain?
Blockchain is a digital ledger that records all transactions securely.
- Each block contains transaction data.
- When a block is full, it connects to the next block forming a chain.
- Thousands of computers verify and maintain the blockchain.
- No single person or company controls it.
11. Who Verifies Blocks?
- Miners verify transactions in blocks.
- If all miners agree that the transactions are valid, the block is added to the blockchain.
- If verification fails, the block is rejected.
12. Maximum Bitcoin Limit
- The total number of Bitcoins is capped at 21 million.
- More Bitcoins can never be created.
- This scarcity increases its value over time.
13. How to Buy Bitcoin?
If you have ₹1,00,000 and want to buy Bitcoin:
- Open an account on exchanges like CoinDCX, WazirX, ZebPay.
- Suppose 1 Bitcoin = ₹84,00,000. You will get approximately 0.0119 BTC for ₹1,00,000.
- Exchange fees are around 0.1%–0.5% per transaction.
14. Bitcoin’s Future Price
Bitcoin is highly volatile, so predicting the exact price is impossible.
- Experts suggest that in the next 5–10 years, Bitcoin could reach $100,000 to $1,000,000 depending on market demand, regulations, and technology.
Conclusion
Cryptocurrency and blockchain are revolutionizing the financial world.
- Bitcoin: First digital currency.
- Blockchain: Technology behind cryptocurrencies.
- Mining & Smart Contracts: Core functions of crypto.
- Platforms like Ethereum and Tron are shaping the future.
Tip for beginners: Start learning the basics, understand the risks, and invest only what you can afford to lose.