Bitcoin Basics and Legality

Bitcoin is an electronic or digital currency whose popularity has increased rapidly over recent years. The skyrocketing price of this virtual currency has prompted many people to question its legality.

What’s more, some people are wondering whether investing in Bitcoin is a safe and wise move. All these are genuine and natural concerns for first-time Bitcoin owners or people that want to invest in this electronic currency. This article explains the basics of this virtual currency and its legality.

What is Bitcoin?
Most Bitcoin definitions describe it as an electronic or virtual currency. That means you can’t have physical Bitcoin or a coin to keep in your pocket. What’s more, Bitcoin doesn’t have a central authority controlling it. It’s a decentralized currency that resides online. Consequently, there’s no government or central bank that has control or power over this virtual currency.

However, Bitcoin has a universal system that tracks all transactions that people make using this virtual currency. And that system is known as the blockchain. Essentially, blockchain is the technology behind this cryptocurrency.

This technology provides a public ledger or database with details of all Bitcoin transactions. Everybody with a Bitcoin address has a public entry on this ledger that identifies the number of coins they own. However, this ledger doesn’t include personally identifiable details related to the tokens.
This aspect of anonymity is the reason why so many people find Bitcoin attractive. That’s because it means no authority can control their money.

What’s more, people can purchase Bitcoins within minutes via crypto exchanges or start bitcoin trading. With such platforms, you only use an acceptable payment method to fund your account and then buy Bitcoin using your preferred amount of fiat money.

Essentially, you don’t have to go through the hassles of opening your bank account and providing personally identifiable data to use Bitcoin. You only need a digital wallet to receive and send Bitcoin.

How to Purchase Bitcoins
Since Bitcoin is not a physical tender, exchanging it is not easy for some people. An attempt to purchase Bitcoin with a PayPal account or a credit card can expose you to unscrupulous sellers or scammers. However, you can find a reputable crypto exchange that enables you to buy Bitcoin safely using fiat money. Thus, it would help if you researched the crypto exchange via which you want to purchase Bitcoin to ensure your safety.

Before the emergency of cryptocurrency exchanges, people could only mine this virtual currency. Bitcoin mining is an expensive process because it requires you to invest in powerful computers and electricity. What’s more, you might reap all the money you invest in Bitcoin mining. Consequently, most people opt to purchase Bitcoin via cryptocurrency exchanges.

If you sell products or services, you can also accept Bitcoin payments. That way, you can also get this virtual currency.

Bitcoin’s Legality
Initially, some people thought that Bitcoin was for the underworld. That’s because they primarily associated it with illegal transactions. However, things have changed now, and Bitcoin is slowly becoming a mainstream currency. For instance, El Salvador became the first country to make Bitcoin a legal tender.

While some governments are yet to make such a move, people across the world use Bitcoin. With an internet connection and a gadget that you can use to set up a digital wallet, you can use Bitcoin. What’s more, some states are now taxing Bitcoin as a commodity.

However, Bitcoin is illegal in some countries. Some nations have even embarked on a process of creating their cryptocurrencies. Nevertheless, Bitcoin’s legality varies from state to state. Therefore, check whether Bitcoin is legal in your country before you start using it.

Bitcoin’s Future
Bitcoin’s future may seem uncertain to some people. That’s because not every country accepts it as legal tender. However, the increasing adoption and usage of this electronic currency mean its future might be bright. What’s more, the technology behind this electronic currency is quite promising.