What is Bitcoin?
Bitcoin is a decentralised digital currency (cryptocurrency) that can be used universally and instantaneously.
It isn’t regulated by a central bank, and instead operates according to peer-to-peer technology. You can therefore transfer and receive money worldwide, without involving third parties such as banks. And, thanks to its sophisticated cryptographic algorithms, the system is (virtually) unhackable. Read more about Bitcoin and learn how to get started with this digital currency.
What is Bitcoin Cash?
There has been a blockchain split on august 1st which separated Bitcoin in both Bitcoin and a new cryptocurrency called Bitcoin Cash. The reason for this chain split in Bitcoin and Bitcoin cash is a disagreement about the scaling issues Bitcoin currently faces. In the beginning period of Bitcoin a block size of 1mb was set by the developer(s) to minimize the amount of spam orders. With a block size of 1mb 4.4 transactions per second are possible.
Bitcoin has gained a great lot of popularity in the past few years, this caused a big increase in the amount of transactions on the Bitcoin-network. In most cases this causes a huge backlog of unconfirmed transactions when there is a lot of volatility. Only Bitcoin transactions with a lot of miners fee will be executed in a fairly quick matter, yet transaction with very little to none miners fee will take very long to be picked up on the blockchain.
To counter this inconvenience the ”replace-by-fee-system” was developed. When a Bitcoin transaction with little to no fee is not executed in time it cannot be canceled. But it is possible to do another transaction to the same coin-address with the same amount of Bitcoin which contains enough miners fee. When this transaction is executed in a block by the miners the previous transaction will be nullified.
For miners this system is profitable but not for all people that use Bitcoin. Because it can take very long for an order to be executed if very little to none miners fee is included. A solution for this problem that was offered by a part of the community was to increase the block size of Bitcoin from 1mb to 2mb. But there wasn’t full agreement for this proposal by the entire community.
To fix the scaling issues of Bitcoin’s block size two other proposals were offered; a soft fork and a hard fork. A soft fork is backward compatible, what this means can be explained through an example; when you use the 2007 version of MS Word it is still possible to open Word files that were made with MS Word 2010. But updates in MS Word 2010 cannot be used in MS Word 2007. A hard fork is not backward compatible, this means that changes will overwrite the previous version after which the previous version cannot be used any longer. This can be seen as a new generation PC on which no CD-ROMs’ can be played, it is also not possible to play PC-games on an older generation PC. Eventually the old generation PC will lose its functionality (to play games that is) because no new games will be released for it.
The soft fork solution would be realized through Segregated Witness. Segwit offers a solution for the limited block size of 1mb by sending a part of the transaction data in a separate block. A Bitcoin-transaction consists of 3 elements; the sender details (the input), the receiver details (the output) and the digital signature. The digital signature verifies if the sender owns enough Bitcoin to fulfill a transaction. But the digital signature takes 65% of the space of the data from a Bitcoin transaction. With the limited block size of 1MB this can be seen as a large amount of data. Dr. Peter Wuille thought of a solution fort his problem on which the sender and receiver details are sent in the ”main block” and the digital signatures are sent in the ”extended block”. The developers have implemented a function that the Segwit soft fork needs at least 95% approval by the users to be implemented. A part of the miners did not agree with the implementation of Segwit because they feared a great reduction of the miners fee.
Eventually the idea was made of a user activated soft fork called BIP 148. BIP stands for Bitcoin Improvement Proposals and is a document with proposals that are made to realize an improvement of the Bitcoin Network. BIP 148 is a soft fork that would repel all blocks without Segwit. If more than 51% of all miners chose the BIP 148 side there will be a split of the original blockchain of Bitcoin.
A large part of the Bitcoin community had its doubts about BIP 148. They feared that the chain split would also bring in problems. This resulted in a contingency plan proposed by the mining company Bitmain. They proposed a hard fork into a whole new form of Bitcoin called Bitcoin Cash on which larger blocks could be mined. All miners that had their doubts about BIP 148 could choose to mine Bitcoin Cash blocks instead.
BIP 148 was implemented on august 1st 2017, because a small amount of the miners decided to mine Bitcoin Cash blocks a blockchain split took place on which both Bitcoin was mined with Segwit implemented and Bitcoin Cash was mined. Everyone that owned Bitcoin before august 1st would have both 1 Bitcoin and 1 Bitcoin cash if they owned their private key or if their exchange/wallet supported Bitcoin Cash.
Bitcoin Cash has a couple of significant differences with Bitcoin; first of all the block size of Bitcoin Cash is 8mb instead of 1mb, Bitcoin Cash has no Segwit implemented, Bitcoin Cash doesn’t support the ”replace-by-fee-system”, Bitcoin Cash has a different rewarding system for miners and Bitcoin Cash has replay and wipeout protection. Replay and wipeout protection with Bitcoin Cash protects a user against ”replay attacks”. This means that someone who sends Bitcoin Cash doesn’t have the risk of accidently sending Bitcoin as well. This was an issue that occurred after the fork because someone with Bitcoin on his private key both had access to 1 Bitcoin and 1 Bitcoin Cash. The rewarding system of miners from Bitcoin Cash differs with the one that Bitcoin has by their MTP-system. MTP stands for Medium Past Time; when the median time of the past 6 mined blocks is higher than 12 hours the difficulty will be decreased with 20%. So it will be 20% more easy to mine new blocks. When there are less miners the difficulty rate will be lowered, because mining blocks will then take longer. The MTP-system attracts new miners to mine Bitcoin Cash by adjusting the difficulty rate when there is little mining support.
Bitcoin Cash has a market cap of 21 million and is currently supported by the following wallets; Bitcoin ABC, Bitcoin Classic, Bitcoin Unlimited, Ledger, Trezor, Electron Cash and BTC.com. The current amount of circulating Bitcoin Cash is 16,750,413 BCH (on 30-10-17). Further it is important to make sure that you don’t send Bitcoin Cash to a regular Bitcoin address and vice versa. Bitcoin and Bitcoin Cash have the same private key, but they are two totally different cryptocurrencies. Luckily most of the times it is still possible to export your Bitcoin Cash to another wallet by exporting the private key when you’ve accidently sent Bitcoin Cash to a wallet that only supports Bitcoin.
What is Litecoin?
Litecoin looks like Bitcoin in a lot of ways. Litecoin is simular to Bitcoin both functionally and systematically. One of the main differences lies in the way Litecoin is mined. Mining Litecoin costs a lot less computing power than mining Bitcoin. So it is easier to mine Litecoin when you have a computer with less advanced average specs.
Bitcoin has a market cap of 21 million coins and the current supply is 16.4 million coins. Whereas Litecoin has a market cap of 84 million coins with a current supply of 51.8 million Litecoins. So relatively Litecoin can be interpreted as silver to Bitcoin as gold.
What is Ethereum?
Ethereum is a software platform which is built on blockchain technology. This is a technology which registers transactions. This could be value transactions but it could also be messages or documents. Every exectuted transaction is publicly registered through blockchain. There is no middleman needed for this, instead the blockchain is used as a control function. This takes away a large amount of tasks that banks and financial institutions have. Banks have a large database on which financial data of customers is stored. Ethereum’s blockchain is a database without an owner on which just like banks transactions and ownerships can be sent/stored.
Other than a blockchain the Ethereum network also has its own programming language called Solidity. This is a language which can be used to code decentralized applications and smart contracts. These can be used to build a peer-to-peer-economy or a decentralized financial system.
The ether coin is the currency applied to Ethereum. Ether is mainly used for ‘contracts’. Application developers use ether to pay for transaction costs and services on the Ethereum network. Ethers are the fuel that enables Ethereum to work. People use their computer to keep the Ethereum network running and in return they get ethers for this service. So in contrary to bitcoin ether can also be used as a fuel other than just a currency.
DApps are applications with self-executing smart contracts. These contracts enable them to be decentralized. A dApp is fully open-source and is controled by multiple entities. The data of the application is publicly stored on a decentralized blockchain. A dApp uses app coins, this is a crypto-graphic token which is needed to gain access to an application. Both miners and farmers are also rewarded with these tokens. A dApp generates tokens with a crypto-graphic algorithm, this algorithm applies as proof for the nodes that contribute to the application. Through the dApp-model it is possible for users to contribute to the Ethereum Network. This can be done by buying coins.
Many startups in the Ethereum network have been launched through initial coin offerings. Especially Fintech startups use initial coin offerings for developing, financing and launcing dApps. So startups give away tokens to investors that are willing to financially support them with ethers. So other than investing in ethers as a crypto currency they can also be used for funding Fintech startups to get coins in return which can be seen as shares in the dApp startup which runs on the Ethereum network.
What is Dash
Dash is an alt coin which works through the same principles as Bitcoin. Dash is one of the fastest crypto currencies for online transactions, because it has a blockchain which is one of the most efficient in its kind. Dash has two unique features: the instantsend method which can be used to do payments without a confirmation time and the privatesend method which can be used for anonymous transactions. Dash has a higher guaranteed level of financial privacy than bitcoin and it can be used to make extremely fast financial transactions.
Why should I buy Bitcoins at Bitrush?
Bitrush was founded in 2014 and facilitates the convenient, reliable and secure purchase of Bitcoins and other cryptocurrencies. Our user friendly platform offers cryptocurrencies at competitive rates via popular payment methods such as iDEAL, Bancontact and MyBank.
What is a bitcoin address and how can I obtain one?
A bitcoin address is required in order to purchase or spend Bitcoins. A bitcoin address consists of a minimum of 27 and maximum of 34 characters, and is comparable to a bank account number. Each bitcoin address comes with its own unique personal key (access code), which enables you to spend bitcoins.
You can obtain a bitcoin address by creating a bitcoin wallet.
What is a Bitcoin wallet?
Your bitcoin wallet is used to store bitcoins and, for all intents and purposes, can be regarded as a bank account. There are three types of bitcoin wallets; an online wallet, a mobile wallet and a software wallet via a bitcoin client.
A software wallet can be downloaded onto your computer via a bitcoin client. The big disadvantage with this is that it necessitates the download of the full bitcoin public ledger (blockchain), which can take days. And, although it gives you total control over your wallet, you still have to administer the security for yourself.
Online wallets are universally accessible and can be created on various websites. An online wallet is not managed by you personally, but rather taken care of by a third party who additionally has responsibility for its security.
A mobile wallet enables you to place your bitcoins in your pocket and effectively take them with you wherever you go. You can readily make payments in physical stores by scanning a QR code or holding your phone to a cash register equipped with NFC (Near Field Communication).
Please visit Bitcoin.org if you require more information before selecting a bitcoin wallet.
What is a hardware wallet?
A hardware wallet is an encrypted device which can be used as a bitcoin wallet. The hardware wallet is a form of cold storage. This means that the private key is stored offline.
The public key is the bit-/altcoin address which is used to make cryptocurrency transactions. The public key is generated by the private key. It is important to save the private key in a secure location and not to share it with anyone to protect the bit-/altcoins. A hardware wallet is a secured way to do this.
It is still possible to do online transactions from cold storage with a hardware wallet, this can be done by plugging the hardware wallet into a computer and by giving permission then entering the password.
There are different kinds of hardware wallets which all vary in price and safety level. Most of the general settings for hardware wallets are the same; a pin and password will have to be configured.
To prevent losing your bit-/altcoins in cases of loss or damage of the hardware wallet there is a safety procedure which can be followed. By making a note of the wallet seeds and storing them in a safe way it is possible to retrieve the wallet.
The wallet seeds can be perceived as safety words that are included with the hardware wallet. When the hardware wallet is lost it’s still possible to get access to your login information/private key by supplying these safety words. This makes it possible to regain access to the account with your public key that contains the bit-/altcoins.
How do I initiate a purchase process at Bitrush?
You can readily initiate a purchase process on our homepage.
- Enter the amount you wish to spend or the number of coins you wish to receive.
- Select your desired payment method.
- Enter your coin address; you’ll subsequently receive your purchased coins at this address.
When you order cryptocurrency at Bitrush for the very first time, we request a verification of your e-mail address, telephone number and bank account number. This process only takes a few minutes.
What are the benefits of bitcoin?
- No middleman is required to perform a transaction and there are no bank transaction fees.
- You can universally and instantaneously transfer and receive bitcoins at any time. There are no public holidays, borders or imposed limits!
- You have complete control over your transactions. It’s impossible for a company to debit unwanted or unrecognised fees from your wallet for example.
- You pay no or extremely low commission.
- Bitcoins are almost infinitely divisible. You can make a transfer of 0.00000001 bitcoin for example.
- Privacy and anonymity; all bitcoin transactions are permanently stored in the bitcoin public ledger (blockchain), and the balance of every bitcoin address is visible to everyone at all times. However, providing the owner has not released personal information during a transaction, their identity cannot be determined on the basis of their bitcoin address.
- Bitcoins are impossible to counterfeit and thus readily and instantly identifiable.
- Storing bitcoins is completely free, exceptionally easy and doesn’t require the involvement of third parties.
- Bitcoin payments are irreversible and a bitcoin transaction cannot be undone. It can only be repaid by the recipient.
- The number of bitcoins is restricted to a maximum of ~21 million. As a result, bitcoin is essentially immune to inflation.
How do I make a bitcoin wallet
If you want to buy or sell crypto currency to bitrush.nl you will need a crypto-wallet. This is an account on which you can save your crypto-currency. Bitrush.nl does not have its own wallet. Bitrush.nl clients usually use the following wallets:
One of the main features you need to buy or sell crypto currencies is your coin address. Keep in mind that you need a different coin address based on the currency. A Bitcoin adress and an Ethereum adress for example. It is possible to manage different addresses on one wallet. When you’re being asked to generate an address at a wallet you should save it first (it could be a constantly generating adress feature).
How can I protect my bitcoins in a safe way?
Your Bitcoin wallet must be well protected, just like a traditional wallet. It’s essential that you sufficiently secure it, in order to prevent loss or theft. Further information is available on Bitcoin.org.
Why do you require my mobile phone number?
Bitcoins can also be used for fraudulent purposes. We are therefore obliged by our financial partners to request your phone number.
Your phone number is used for the following purposes:
- To send a verification code.
- To deter fraudsters.
- To potentially help track down fraudsters.
I didn’t receive my SMS, now what?
In the rare event that you don’t receive an SMS containing your code, you can do the following:
- Try to execute the purchase once more, perhaps using a different browser.
- Clear the last hour of your browsing history.
- Activate your browser’s private browsing/incognito mode.
Why is account verification required?
The popularity of bitcoin and other cryptocurrencies makes it a target for cybercriminals unfortunately. A cybercriminal can gain access to a user’s bank details via "phishing" for example. The moment a bitcoin purchase is executed, the bitcoins are sent to an anonymous bitcoin address, and we are unable to reverse the transaction.
To reduce the risk of fraud, we therefore request an authentication when executing your first order.
Why must I supply my passport or ID card?
In order to prevent (Internet) fraud and money laundering, our payment service provider obliges us to request identity verification on amounts over € 2500. More information can be found on our safety policy page.
What is the cooling-down period?
The cooling-down period ensures that bitcoins are held for a period of 2 working days once a purchase limit has been reached.
Suppose you place an order for € 250, you will keep a purchase limit of € 200 for the following two working days. If you exceed the € 200 limit, your bitcoins will be temporarily retained. The next period begins once the two working days are up. More information can be found on our safety policy page.
I have purchased bitcoins, but not yet received them?
Although bitcoins are generally immediately visible in your wallet, it is possible to experience a delay. The most common reasons for this are:
- You have not completed your account verification.
- Certain online wallets require 6 confirmations before bitcoins become visible. A confirmation means that the transaction has been verified by the network and can (almost) never be reversed. (With each confirmation, the risk of reversing the transaction is reduced.)