You may have wondered about Bitcoin transactions and how Cryptocurrency Exchanges can be put to good use?
Also, if you want to exchange Dash to USD, Rubix has a good platform to do it. Same if you want a Dash price chart or exchange Dash to United States Dollars.
To understand this, one needs first to get a grasp of the blockchain, which is the technology that underpins bitcoin.
Again, this is something that we will go into in a little bit more detail later on. But for now, we’ll keep things light with a brief introduction.
The best way to think of the blockchain is as a massive public ledger of all of the different bitcoin transactions that have taken place since inception.
It is developed across a network of computers, or nodes, each of which has downloaded the latest version of the blockchain and each of which contributes to continue updating it as and when new transactions need verifying.
The actual process through which a transaction is verified is rooted in cryptography. Basically, the computer needs to solve a complex mathematical puzzle and, when it does, the block of which that puzzle is representative gets added to the chain and time-stamped.
The amount of transactions that get verified as part of one block is limited by the size of the block, which is a source of contention in the bitcoin space and has been since inception.
Some argue that the block limit should be increased to allow more transactions to take place per second. Others say that this would open up the chain to potential problems and that scalability isn’t as simple as expanding block size.
Whatever the most valid argument is, it’s not really important for the purposes of this discussion.
A bitcoin transaction is a little bit like an email in the way it is sent. If somebody wants to send bitcoin to an address, they need a private key which corresponds to their own speech and a string of numbers and letters that represents the receiver’s address. The source address is accessed using the private key and the sender inputs the receiver’s address along with the amount of bitcoin he or she wishes to send. Once this process is complete, the whole transaction gets forwarded to the bitcoin network, and the bitcoin miners put their computer power to work solving the above discussed mathematical puzzle.
Once solved, and once the block is added to the chain, the transaction is considered verified and time stamped. This is how the bitcoin protocol avoids double spending – once verified, it’s impossible to edit or remove a block from the chain. It’s also how the transfer of bitcoin is traceable right back to the source – it’s possible to follow bitcoin from one wallet to another relatively quickly.
But wait, we hear you say: I thought bitcoin was supposed to be anonymous?
Well, it is. Just because it is possible to follow the path of bitcoin doesn’t mean it’s possible to identify who owns the wallets through which the bitcoin in question travels.
Whether you want to trade bitcoin and profit from intraday volatility or you want to buy and hold bitcoin as an investment vehicle, you’re going to need to know a) how to buy it and b) how to store it.
These two things can be intertwined depending on the route you choose so, throughout this part of the guide, we will keep jumping from one to the other. This isn’t going to make things any more complicated. Indeed, it should do the opposite, but it’s worth noting before we jump in.
We’ve already outlined the fact that when people buy bitcoin, they aren’t actually buying anything physical or even anything digital as far as something they can point to is concerned. Instead, they are purchasing a confirmation that bitcoin has been sent from one wallet to another, with the second of these two wallets (the one to which the bitcoin is being sent) being a wallet for which they hold the private key.
That’s really important to understand.
If you’ve not got the private key to the wallet that holds the bitcoin, you’ve not got the bitcoin.
So, what you need to take care of first is to set up a bitcoin wallet.
Back when bitcoin was far less popular than it is now, a bitcoin wallet was generally a piece of software that you would download on your computer and on which you would store your bitcoin. This has the added advantage of being relatively secure (as, for example, a hacker would have to directly access your computer in order to gain access to your bitcoin, whereas today, hackers focus on the large-scale online wallet providers) but as mentioned earlier on, over time, specific platforms have been set up to make the whole thing easier.
Today these platforms, known as online wallets, allow users to store bitcoin through a browser by setting up an account with the wallet provider. Some of these wallet providers also offer Cryptocurrency exchange services through which users can buy and sell bitcoin as well as various other crypto coins.