Cryptocurrency: Bitcoin simplified for everyone !

Tuesday, August 16, 2022
author picture Jimmy R. Bélanger
culture
Original content created by news.limited staff

Crypto and Bitcoin simplified for everyone!

The fabulous world of cryptocurrency, like any good website that respects itself and for social cultural purposes, we must specify that we are not financial experts and the purpose of this article is to give you a solid foundation to understand how bitcoin and its equivalents work. We cannot be held responsible for your decisions in relation to cryptocurrency. Blockchain, wallets, nodes, miners, pools and exchanges platformes are all commonly used terms that need to be explained to you so that you can demystify this wonderful technology. As of today there are more than 20,000 different types of cryptocurrency, 500 exchanges platformes, and the total value exceeds one trillion US dollars. We'll go over the technical side first and then direct you to the most efficient and secure solutions to buy, store, trade and sell. Keep in mind that you are in a very high risk financial sphere, absolute guarantees do not exist. A picture is worth a thousand words, we have prepared a diagram below that includes all the terms related to the cryptocurrency system.

The brains of the Blockchain: The Nodes.

A Node is a computer device on which you install the Bitcoin Core. It can be a simple computer, a Raspberry Pi, a server or a laptop. It doesn't matter where you install the Bitcoin Core, the only requirements are a disk space of more than 10 GB and an internet connection. Bitcoin Core is available for Windows, Linux, Mac OS X and ARMHF 32/64 bit processors in several languages. You can download it directly from the bitcoin.org website or with a simple command line. To simplify your life and avoid making command errors we advise you to use the version found on the website which offers an executable with a graphical interface which will simplify your interactions with your Bitcoin Node. For more information on the installation visit the official page. There are third party applications such as Umbrel that allow for easy installation of a Bitcoin Node, this application seems to be well appreciated but you have to take into account that when you use a non-traditional platform it gives you more options but there will always be more security risk. Once the installation is complete, the first step is for the Node to synchronize with other existing Nodes so that they can share the ledger with you. The ledger contains all the transactions that have been made by the users. Once the synchronization is complete, you will be able to create a wallet to receive or send Bitcoins. There are more than 13,000 active Nodes to date, which are listed on the website https://bitnodes.io/. The Nodes communicate with each other through the TCP/IP protocol, UDP and have the ability to synchronize with a traditional IP or through the TOR IP address service which is an anonymous service that aims to protect your IP provided by your provider. For advanced users under Windows who want to do the installation by command line, you can open the Windows PowerShell and type this for linux use the terminal in user mode. No matter who you are, you have the right to install a Bitcoin Core on your computer and participate in this network.

1. curl https://bitnodes.io/install-full-node.sh | sh

Types of Bitcoin Nodes.

Full Nodes are the most common type of Bitcoin Nodes. These must be running at all times to maintain the Bitcoin blockchain and store the full ledger history. Light Nodes are more user-friendly and connect to full Nodes as needed. However, they do not make any contributions to the network, and only verify transactions in the blocks they store. They are often used in mobile Bitcoin wallets.

Requirements for running a Bitcoin Node.

As a server in the Bitcoin network, a Bitcoin Node is responsible for verifying transactions and maintaining a copy of the Bitcoin blockchain. This requires a computer with a large amount of free disk space and a sufficiently high read/write speed. In addition, it must be connected to other Nodes in order to propagate new additions to the blockchain. In addition, it provides a copy of the blockchain to new Nodes in order to verify transactions independently. A full Node typically consumes up to 200 GB of traffic per month, while a lightweight Node uses up to 20 GB per month. A thin Node requires only a fraction of this space and relies on a full Node to validate transactions. Open-source solutions are available, such as RaspiBlitz and BTCPayServer.

Benefits of running a Bitcoin Node.

One of the main benefits of running a Bitcoin Node is the opportunity to learn more about the Bitcoin network. This will help you to make better decisions and become more knowledgeable about the cryptocurrency market. You will also learn more about Bitcoin's requirements and how to participate in the network. Moreover, running a Bitcoin Node will help you to protect your own privacy. As long as you use a secure server, no one will be able to find your transactions. Apart from the security of the Bitcoin network, running a Bitcoin Node also helps to further decentralize the network. It makes it stronger as more Nodes spread the network around the world. So, it is important for long-term Bitcoin believers to run a Bitcoin Node to contribute to the network. It gives them a stake in the Bitcoin revolution. But it is not necessary to be a Bitcoin Node to earn money.

Why is blockchain consensus revolutionary?

Before the arrival of the blockchain, it was impossible to reach a mutual consensus without having a hierarchy of master and slave, there were predetermined identities that were the bosses who held the information and shared it with the other servers that were slaves and these had no say in the matter, we can think of the master/slave process of MySQL. So if an ill-intentioned master sends a wrong information, the information would still be relayed which would be a nonsense for a financial technology that wants to be fair for all. If there was no blockchain, it would be necessary for all servers to be online to function properly, for any reason if the master disconnected the information sharing would be broken with the slaves. Thanks to the blockchain, all Nodes have the same priority and hold the same information and have the same rights, which allows them to be in communication with any Node of the network simultaneously. Each time a transaction is made between two users or a new block is found by a group of miners, the information is received by a Node and it will be broadcast to the other Nodes and displayed in the ledger, the miners will have the task of confirming that the information is real. Websites, exchanges platforme, mining pools connect to a Node, which queries the ledger and the information is relayed to you. Blockchain.com gives you real-time details on the ledger, the transactions being validated or confirmed by the network. As you could have noticed the transactions are made between two wallet, the number of confirmation to validate a transaction can vary from one cryptocurrency to another.

The benefits of Blockchain for businesses.

Blockchain is a revolutionary technology that aims to make online transactions more transparent, secure, and efficient. The technology is used for various purposes, such as payment processing and real-life asset tracking. With its help, companies and organizations can reduce costs and fraud. In addition to its potential for financial applications, blockchain is also capable of powering new generation internet applications.

It can be used for payment processing.

With the rise of cybercrime, banks are worried about the safety of their users identity data and money. To ensure the safety of these assets, banks need a secure system that can handle transactions. Blockchain can do both. Its decentralized network has no central authority, making it impossible to hack. Using blockchain as payment processing software, banks can reduce transaction time from days to minutes. Businesses can take advantage of this technology for a variety of purposes, including payment processing.

One example of how blockchain technology is being used for payment processing is with the Interbank Information Network. Developed by JP Morgan in 2017, IIN is a secure platform for transferring money between banks and can speed up cross-border payments. With a blockchain-based payment network, each transaction is encrypted and secured. The company plans to launch a digital payment app in 2019.

It can track ownership of real-life assets.

Blockchain is a revolutionary technology that uses a decentralized network to track ownership of tangible and intangible assets. It could revolutionize the way we purchase, sell, and store goods. It can be used to track real-life assets such as land, property, and more. The technology has also the potential to track the ownership of intangible assets such as digital assets such as Bitcoin. In the future, blockchain-based ownership could be a practical necessity.

Currently, traditional processes such as document scanning and tracking down physical files in a local recording office are expensive, time-consuming, and prone to human error. Blockchain technology removes these problems and can ensure that real-life assets are owned accurately and transparently. Additionally, blockchain is able to create a transparent ownership history of assets. Furthermore, a blockchain can record contracts using smart contracts.

It can reduce costs and fraud.

There are a number of ways in which blockchain can help businesses reduce costs. Firstly, the decentralized nature of the blockchain allows information to be shared between all of the businesses involved in the supply chain. This reduces the amount of manual work that needs to be done. This technology also makes auditing and reporting easier and less expensive. It also helps improve security. If implemented correctly, blockchain could help businesses save thousands of dollars per year. As such, it should be considered by any business.

Secondly, blockchain can make shipping and receiving easier. Companies can save money on shipping because they can automate the process through a blockchain application. By doing this, they will also be able to eliminate costs and bureaucracy associated with shipping. The use of blockchain technology will also help companies improve their online presence and reduce costs. They can also use the technology to help manage their accounting books by allowing the user network to see a history of transactions.

A distributed digital ledger like Blockchain can reduce fraud by ensuring that only authorized members can edit or delete data. Blockchain also allows members to share data between computers, ensuring transparency and accountability. Blockchain also allows authorized individuals from different departments to access data, control previous and current data, and detect fraudulent transactions. Its decentralized nature makes it ideal for reducing fraud, double booking, and document alterations. Nevertheless, it is important to understand that blockchain will not completely eliminate fraud.

Traditionally, bank ledgers have relied on a centralized database that is vulnerable to hacking. However, blockchain technology stores data on multiple locations, allowing equal access to each location. The network of Nodes also detects cyber attacks and data manipulation. It is not just blockchain technology that can cut fraud, but many other areas of business as well. The benefits of this technology are significant. Its ability to reduce fraud can save banks billions of dollars.

The disadvantages of Blockchain technology.

The biggest flaw of blockchain technology is when you send funds to another address on the network make sure that this one is the right one, the transactions cannot be cancelled, they are final and irreversible.
While its many advantages have already been noted, blockchain does have some disadvantages. In addition, governments do not have the same degree of control over blockchain-based virtual currencies, which has led to the devaluation of currencies in several countries. Some of these devaluations are the result of government interference. National security is another concern. However, blockchain remains a promising technology. Its use for crypto-currency transactions is not limited to financial institutions. It can be applied to a variety of sectors, including healthcare, crowdfunding campaigns, real estate transactions, music sales and government.

Adding a new block to a blockchain requires the creation of a new block using a nonce value that is calculated many times. Changing data in a blockchain is also a major challenge. Recording a single transaction can take hours, making it difficult to make changes. As a result, blockchains are often not scalable and may require a hard fork to resolve issues. In addition, the data and code in a blockchain is permanent, making it difficult to change.

The Bitcoin wallet: understanding how it works.

The Bitcoin wallet is the equivalent of your bank account. It is represented by a string that contains between 27 and 34 characters and randomized by one of the Bitcoin Nodes, there are four formats at the moment, they have the same functionality. Here is an example of wallet: bc1qy0gcpmdvjw2rglz3r7cq4gh6phuqldfxqzzpan, on Nodes you can generate an unlimited number of wallet. This address allows you to send, store and receive your Bitcoins. It is important to understand that Bitcoins wallet are always associated with a private key, this private key can be saved as a file and you can even associate a password to this private key. The creation of the private key and password is a step that is often ignored by Bitcoin owners and could cost you dearly. When you create a web account on an exchange platforme, mining site or other entity in the Bitcoin network, you are offered a wallet but it usually does not provide a private key, which becomes a high security risk for someone who wishes to store a large amount of Bitcoin over the long term. This implies that the owners of the website or application have unrestricted access to your wallet, and if their server is hacked, the hacker can take all of your Bitcoins. The only exchange platforme that says it guarantees the equivalent of the value of your Bitcoins is Binance, these have never been hacked but is it true? Let's hope we don't have to test their franchise. There is also a range of Bitcoin wallet also called hardware wallet which are usually physical wallets like keys or devices specifically dedicated to the storage of cryptocurrencies, your private key will follow you everywhere but the applications remain third party.

The world's most secure way to store your Bitcoins.

Download the official Bitcoin Core application. Create a wallet address, add a password to your private key, perform the necessary transactions, copy your private key to two good quality flash drives, remove the private key from your Node and re-identify with your key when necessary.

For the more paranoid, download the Tail operating system and install it on a usb key. Connect to the onion network, add permanent disk space to this key using the system tool, install the Bitcoin Core on your operating system, create a wallet, add a password to your private key, make the necessary transactions, always make a duplicate of your operating system and disconnect it from your computer. It is very important not to leave your wallet open for a long period of time when it is not needed... even the Tail operating system can be hacked.

Why is the Bitcoin hardware wallet in second place?

The hardware wallet are specialized devices, these use the right storage methods for your cryptocurrency, they are considered hardware wallet because it transacts directly with the Nodes of the blockchain and your private key is on the hardware itself. The security problem occurs when you make an order on the company's website in order to get this wallet, it happened in the past that some database of several wallet companies was compromised and sold on the darkweb, see the article of express computer, which has the effect of broadcasting the name and personal address of the wallet owners, so it can be thought that a malicious person could go hunting for your Bitcoin wallet. The other point to consider is that for the recognition of this key, the necessary applications are installed on the computer that will host the key, which could open unwanted communication doors. Despite this security problem, this is still the second best way to store your Bitcoins. When purchasing a hardware wallet, be sure to buy it directly from the manufacturer or an authorized dealer and require that it be cellared. There are a lot of hardware to store your Bitcoins and different cryptocurrencies, they have different advantages and functionality, so here is a list.
The luxurious : Ngrave Zero.
The Ngrave Zero hardware wallet is now available for $398 USD. You can order this one with a high quality stainless steel plate that serves as a recovery tool in case you lose your password for a total of $498 USD. According to them, this would be the most secure wallet on the market. It also recently announced that ZERO is now the first hardware crypto wallet to be EAL7 certified, making it the first official financial product of its kind. The Ngrave Zero hardware wallet is a powerful crypto-currency storage solution. It can shuffle and sign transactions, and incorporates QR codes for easy mobile access. Ngrave Zero is also compatible with the Android LIQUID app and Apple LIQUID app. It can also communicate with the blockchain. Its firmware has been updated to improve security and reliability. If you are looking for the safest way to store and secure your crypto, this hardware wallet is a great choice. This app also allows users to view real-time balances and make transaction requests. The Ngrave Zero hardware wallet communicates with the mobile app via QR codes and never stores or accesses any private keys. This prevents hackers from gaining access to the private keys of Ngrave Zero.

Ngrave Zero's security is impenetrable by design, and users can have peace of mind knowing their funds are safe. Her team includes one of the brightest cryptographic minds in the world. It has leveraged this person's skills to create a platform that offers users bank-level security. The Ngrave Liquid app connects to the Ngrave hardware wallet and allows you to view, manage and send crypto assets. It also supports a wide variety of crypto, including ERC20 tokens and many other cryptocurrency. The Ngrave hardware wallet features a USB-C port for charging from the wall. It is possible to manage 27 ERC20 assets and tokens in a single app. The Ngrave LIQUID app connects to the blockchain and communicates with the hardware wallet using QR codes. The private keys never leave the hardware wallet and are kept securely in the software.

The Ngrave Zero is equipped with a biometric fingerprint scanner, which allows the device to confirm your identities. The device and the accompanying application are also protected by a PIN code. In addition, the ZERO has a light sensor that generates the world's most secure private keys. This is the Ngrave Perfect Key. In addition, the ZERO also offers users two ways to back up their wallet. It has a biometric fingerprint scanner that can be used for optional additional security. Instead of letting the user choose a set of keys that can be tracked online, the wallet generates a random set. This allows the user to recover their private keys if they misplace their wallet.

The GRAPHENE recovery plate is made of high quality stainless steel, making it extremely durable. It is resistant to impact, flooding and extreme temperatures. It also has a unique recovery identifier. It can also be recovered if lost, but there is no way to recover the bottom plate. Fortunately, Ngrave is also introducing an industry-first solution that prevents this from happening.
The best known : Ledger Nano X.
The ledger Nano X retails for $149.00 and comes with a digital display. This device Ledger Nano X has several advantages over other similar devices. First of all, it is compatible with Bluetooth. This means that you can easily pair it with your smartphone. The device also displays a real-time balance of your crypto assets. In addition, its user-friendly interface makes it easy to manage your transactions. Its easy setup process is also one of its biggest advantages. It can be paired with an app that allows you to monitor your balances on multiple devices. This allows you to easily transfer your cryptos to a desktop computer, tablet or smartphone. You can also use the Ledger Live app to manage your cryptocurrency on the go. To get started, download the Ledger Live app to your computer. The package also includes three recovery sheets and a sheet of stickers. When you set up a Ledger Nano X, you will need to choose a PIN. This can be either four or eight digits, with the eight-digit PIN being the most secure. The PIN must be entered correctly each time you use the device. Once your PIN has been verified, you will see a backup passphrase. This is a list of 24 words that will protect your Bitcoin and tokens. The Ledger Nano X is capable of storing NFT private keys on other blockchains. However, users need to sync their wallet with a third-party app to do so. Ledger's hardware wallets all benefit from a high level of security. The Secure Element chips are the same ones used in credit cards, passports and SIM cards. While Secure Element chips are not required for hardware wallets, they do ensure the security of private keys.
The entry level: The Trezor One.
The price is approximately $82.00 and it also comes with a digital interface. This hardware wallet will be a great option for anyone who wants a secure and convenient way to store and manage their digital assets. The Trezor Wallet connects to a computer or cell phone via USB 2.0 or 3.0. A USB Type B or C cable is included in the package. It does not support Wi-Fi or Bluetooth. This is an intentional limitation that limits its security risks. This feature is especially important if you are constantly in contact with your digital assets. You don't want to risk losing important information because your wallet can't access your bank accounts. Trezor's wallet comes in a simple cardboard box and aluminum packaging. Inside the package, the hardware wallet is sealed with a small sticker that indicates the color of the device. If the seals have been broken, Trezor offers technical assistance. To prevent theft and unauthorized access, the wallet should be purchased from a reliable source. If you have any questions, you can always contact the company and ask about the warranty. The Trezor One hardware wallet is completely open-source, which means that anyone can examine its code and replicate it identically. If they wish, they can also check the software for backdoors. Nevertheless, Trezor is one of the leading manufacturers in this field and has many satisfied customers. Once you receive your new hardware wallet, you need to install an application on your computer and configure your Trezor. First, you need to confirm the product's security rules. Once you've done that, you can select Begin Backup. Once you have completed this step, you need to secure your Trezor device with a backup tool. In order to secure your wallet, you also need to remember this password. You can also use your hardware wallet to store your passwords. However, it is highly recommended to store the password in a safe place, such as a safe. It is important to consider buying the Trezor Model T if you want to store your XMR, XRP and EOS. This version is available for $249 US.

Option number three, third party wallets.

A third party is an identity between you and the network Node that will generate the wallet for you and thus have full control over it.
These are the wallets that will be offered to you by any partner in connection with the Bitcoin network. These are not bad wallets in themselves, but you need to trust the partner who generates them for you. All the entry points to buy Bitcoin, all the exchanges platformes, all the places to mine are third party wallets, they are easy to acquire because a simple registration to their service or installation of their mobile application is necessary. The problem with this method is that the third party is responsible for your private key and even if they gave it to you, they would be able to recover it. So the security of your cryptocurrency depends on the honesty and protection of the partner, which can be a security issue in itself. The third party wallet remains a necessity and facilitates the distribution of the cryptocurrency, the best advice I can give you is to use them only when necessary and if you have assets in cryptocurrency divided on several partners in the case of a hacking or other you open lost only a part of your funds.

A very important financial variable of Bitcoin is that it is limited to 21 million which makes it a rare gold. As time goes by, the largest countries issue a predetermined amount of their currencies and history has shown that they create more and more of them, which in turn creates inflation and thus decreases your purchasing power. It is interesting to follow the evolution of the values associated with the cryptocurrency. As you may have noticed with the Bitcoin all time history index from Tradingview, Bitcoin is a currency that fluctuates a lot. The methods for determining the price of a digital security is completely different than the traditional market. There are certain points to consider, such as the maximum number of units available and Halving. Several tools exist at the moment to see the price in real time of your favorite cryptocurrencies. Some allow you to trade from one cryptocurrency to another, it is interesting to check the transaction fees before making a conversion of a virtual value and to take into consideration all the available purchase methods.

Two tools to follow the financial crypto evolution.

The number one tool to follow the evolution of the price of cryptocurrency is CoinMarketCap (CMC). It lists more than 20,646 different crypto at the moment, this one gives you their positioning, the total monetary circulation, the volume of purchase in the last 24 hours, the maximum supply of each crypto as well as their value and is displayed in a clear and efficient way, it even offers a night vision mode that is softer for the eyes. Three different charts are available and incorporates the TradingView chart under the name Candle Chart. You can have detailed information about each crypto such as their website, explorer, source codes, whitepapers as well as the communities related to the different asset. It allows you to search for the desired crypto by name, sort the crypto according to their category and their usefulness, have detailed information on the exchanges platformes so which crypto can be shared, the list of crypto that can be mined are also indicated, the comments of people are also displayed. As for TradingView, it offers a tool called Crypto Screener, TradingView is not limited to cryptocurrency, it is also used by traders for non-virtual securities. This tool is useful because it gives more filters to better determine the position of the cryptocurrency, the 52 Week High and 52 Week Low filters can give you good indications as well as their technical rating.

Exchanges platformes and apps for buying/trading crypto.

There are over 512 exchanges platformes currently listed at CMC and countless mobile applications on Android and Apple Store that allow you to buy, sell and trade your cryptocurrency. The glaring difference between them is the different cryptocurrency that can be traded and the services that are associated with them. When you sign up to a quality exchange platforme, you will have two types of accounts, either fiat values which correspond to the currencies that everyone knows such as USD, CAD, EUR as well as virtual currencies. Some exchanges platformes allow you to buy crypto by credit card or bank transfer while others allow you to get a credit card in order to make regular purchases in any good business that accepts Visa, you can even withdraw your FIAT currencies in ATMs of different banks. Before registering on an exchange platformes or mobile application it would be wise to check the list of values that can be shared and the fees associated with each transaction. It is important to note that some credit card companies do not allow the purchase of cryptocurrency assets, transactions will be automatically cancelled. When you open an account with a cryptocurrency exchange platforme, it is important to enable F2A authentication to protect your account and keep your login information private. Although some exchanges platformes have high security standards, if someone gets hold of this information and steals it from your account, the exchanges platformes do not refund accounts that have been hacked.

1. Crypto.com : This APP allows for card/transfer purchases, the user interface is user-friendly and the most popular cryptocurrency can be exchanged. You can take advantage of a credit card to buy in all major stores or withdraw your earnings by ATM.

2. Binance.com : Are you looking for new crypto, while staying within a secure framework for your wallets? Binance allows you to share the latest crypto and buy them by credit card.

3. Coinbase.com : You can buy the most popular cryptos periodically with a debit card. The ultimate option, sell your cryptos and get paid with paypal. For US residents you can use a credit card to make your purchases.

4. Shakepay.com : For the Canadian resident it is the easiest door to buy Bitcoins or Ethereum through Interac online, checking an account takes less than a day and you can make purchases up to $10,000 a day. It offers a credit card service that can be used in any store but you can't take your money out of an ATM.

What is Halving terme and why is it so important ?

Bitcoins are created through the process of mining, when a device mines a new block it will be added to the chain, the network rewards it with bitcoin. At the very beginning of the chain the difficulty of finding a block was easy, it required little computational effort, with only one processor you were able to find a block and a reward of fifty Bitcoin was offered, see the details of the first BLOCK 1. As time goes on, the more transactions there are so the difficulty of finding a block increases and it becomes necessary to buy hardware dedicated to Bitcoin mining. After 210,000 blocks are found by miners, the reward offered by the network is halved, a phenomenon known as halving, which tends to occur every four years. The fewer Bitcoins offered by the network, the more its value tends to rise. This is only one factor that determines the value of Bitcoin, but it is verifiable and can give you a good indication of when the next halving will occur. The date of the next halving is approximate because the time it takes for a new block to be discovered varies, but the next halving is estimated to be May 4, 2024.

The mining process and its partners.

Cryptocurrency mining has come a long way since the last few years when you had to connect directly to the Node of your favorite crypto and mine it. This process still exists for some currencies but it is no longer relevant for bitcoin and the most popular cryptos. Now it is necessary to connect the software that manages your mining hardware to a Pool that acts as a bridge named Stratum, this will create a bridge between your mining device and the Node. For Bitcoin, you need to buy powerful hardware called ASIC (sha256) in order to have an acceptable remuneration by the network, other crypto such as Etherum can be mined with a simple graphic card. Since the difficulty to find a Block is now very high, it becomes difficult for a single person to have enough manpower to discover a Block, the fact of connecting to a Pool with other miners allows you to be paid for each calculation made, when a Block is found by the Pool, the value of the Block is distributed in the Wallets of the participants at equal value. Depending on the crypto you want to mine, the algorithms and materials can vary. The site MiningPoolStats allows you to discover the list of available pools as well as the algorithm used by the crypto of your choice. Bitmain remains by far the best partner to get quality ASICs, You can get a detailed list of ASIC providers at Asicminervalue, Nicehash can help you with CPU, GPU and ASIC yields, you can rely on Nicehash's Profitability Calculation page, you have to understand that profitability varies every day depending on the value of the cryptocurrency and that these are power-hungry machines that can easily inflate your electric bill. Nicehash offers higher than average profitability because they sell your computing power to people interested in using it. Some pools such as Mining-dutch have additional options that allow you to convert your earnings from mining different crypto's into bitcoin and send them to a remote wallet automatically as well as receive a daily report by email.