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The easiest way to buy bitcoin is to purchase it through an online exchange like Coinbase. Coinbase makes it easy to buy, sell, send, receive, and store bitcoin without needing to hold it yourself using something called public and private keys.
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However, if you choose to buy and store bitcoin outside of an online exchange, here’s how that works.
Each person who joins the bitcoin network is issued a public key, which is a long string of letters and numbers that you can think of like an email address, and a private key, which is equivalent to a password.
When you buy bitcoin—or send/receive it—you get a public key, which you can think of as a key that unlocks a virtual vault and gives you access to your money.
Anyone can send bitcoin to you via your public key, but only the holder of the private key can access the bitcoin in the “virtual vault” once it’s been sent.
There are many ways to store bitcoin both online and off. The simplest solution is a virtual wallet.
If you want to transfer money from your wallet to a bank account after selling your bitcoin, the Coinbase app makes it as easy as transferring funds from one bank to another. Similar to conventional bank transfers or ATM withdrawals, exchanges like Coinbase set a daily limit, and it may take between a few days and a week for the transaction to be completed.
The easiest way to buy bitcoin is to purchase it through an online exchange like Coinbase.
All bitcoin transactions and public keys are recorded on a virtual ledger called the blockchain. The ledger is effectively a chronological list of transactions. This ledger is copied—exactly—across every computer that is connected to the bitcoin network, and it is constantly checked and secured using a vast amount of computing power across the globe. The blockchain concept has turned out to be powerful and adaptable, and there are now a wide variety of non-cryptocurrency-related blockchains that are used for things like supply-chain management. The ‘Bitcoin Blockchain’ specifically refers to the virtual ledger that records bitcoin transactions and private keys.