Bitcoin was the first of the mobile wallet revolution. They call themselves “cash for the internet” and say that Bitcoin is the first decentralised peer-to-peer payment network  powered by its users with no central authority or middlemen.

So, in a nutshell, Bitcoin is its own currency and allows for  instant and secure transfer of money digitally, at very low transaction fees and regardless of where in the world the sender and receiver of the funds are, the value of a Bitcoin remains the same.

Let’s recap

Mobile wallets are the digital equivalent of your purse or wallet. It is an app on your phone that you use when you are ready to pay – just enter a pin code and the amount and there you go, you have paid for your purchase without needing a credit card or cash.

So, what are Bitcoins?

Simply put, Bitcoin is its own currency – electronic cash that you can use to pay for goods and services or send as gifts to friends and family. Most people buy a Bitcoin or two to use for online shopping and sending to money to loved ones.

Bitcoin in South Africa

The use of Bitcoin in South Africa is growing at a rapid pace with more and more people using it as an alternative to traditional payment systems. Bitcoin has also become popular amongst businesses, both online and off, who use it to accept payments from customers. Currently, there are over 30 000 online businesses that accept Bitcoin as payment through payfast.co.za. There are also certain online gaming and gambling sites that accept Bitcoins.

Wait there’s more

There is a whole other layer to Bitcoin that makes it even more exciting, and a lot more technical. It is called “Bitcoin mining” and refers to the act of searching for the secret codes that create Bitcoins.  That’s right, folks. With a little bit of technical savvy and some high-tech infrastructure, Bitcoin makes it possible for people to literally create electronic cash.

How does this work, you ask? Well, since Bitcoin is a virtual currency, it uses very complex codes for security, making it super difficult to copy. In order to “mine” Bitcoins, you will need to figure out text found all over the internet to change it into a readable format that can be recognised as Bitcoin currency. Sounds too good to be true but is actually encouraged by the company, so get your  high-tech computers and servers running 24/7, and start searching for and decrypting Bitcoin to make your billions.

Ultimately…

It sounds intimidating, we know, but once you get the basics right, it can be a fun and challenging way to make a little bit of extra cash on the side, with some people making hundreds of thousands. And, if all else fails, you can simply purchase Bitcoin instead of mining it and hopefully, like most currencies, its value increases over time.

Yes, it’s a tricky concept to wrap your head around, but there are so many sources of information online about buying, trading and mining Bitcoin so, like we always say: do your research before you spend your hard-earned cash.