Described as the ‘ most disruptive financial technology of the last 100 years’ , Bitcoin is quickly evolving the way we view money and sovereignty over our own financial destiny. Enjoy our guide and welcome to the future of decentralized universal currency.
What is Bitcoin in NZ?
Bitcoin is a groundbreaking decentralized digital payment system that allows individuals to transfer value directly to one another without the need for a central authority or bank.
Bitcoin is free to use, accessible to anyone with via the internet, and has no comprehension of international borders; acting as the universal internet currency.
This decentralized network is unique in that it operates using a public ledger system called blockchain. This ledger (meaning a record keeping system) is maintained by thousands of computers around the world, ensuring the accuracy and security of all BTC transactions.
Known as the gold standard of cryptocurrency, Bitcoin is now used by hundreds of millions across the world, including roughly 300,000+ Kiwis who use it or hold it as a investment.
Bitcoin is a peer-to-peer version of electronic cash that allows payments to be sent directly from one party to another without going through a financial institution. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work.
What is the Bitcoin Ethos?
Conceived in 2008 in the wake of the Global Financial Crisis and launched in 2009, Bitcoin is more than just a digital currency; it is a revolutionary concept shaped by a distinct ethos which has evolved over decades.
At its core, Bitcoin is built on principles that redefine our approach to money, emphasizing privacy, freedom, decentralization, self-sovereignty, individual responsibility, and autonomy.
- Privacy: Bitcoin enables users to transact with a level of privacy often absent in traditional banking system – the ability to conduct financial transactions without revealing personal information.
- Autonomy: Users wield direct control over their funds, liberating them from reliance on central authorities and ‘middleman’ third parties.
- Decentralization: In stark contrast to centralized financial structures, Bitcoin operates on a decentralized network. This lack of a single controlling entity ensures resistance to censorship, manipulation, and mitigates the risks associated with centralized weak points.
- Self-Sovereignty: Bitcoin promotes the concept of self-sovereignty, emphasizing that individuals should be the ultimate authority over their own financial journey. Users hold their own private keys, granting them unparalleled control and access to their funds.
- Self-Responsibility: An inherent part of the Bitcoin ethos is individual responsibility. Users are tasked with safeguarding their private keys and securing their wallets, with no central helpdesk, instilling a sense of personal stewardship in the pursuit of financial freedom.
History of Bitcoin
Crypto has been a hot topic for over a decade, but the complexity of this expanding market can be overwhelming due to the continuous news surrounding it. However, understanding the history of Bitcoin, the worlds first and most widely traded crypto, can simplify this task.
The inception of Bitcoin begun with a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System“, which was posted to a cryptography mailing list on October 31st, 2008 – with “ Satoshi Nakamoto ” as the author. Satoshi’s true identity is still a mystery to this very day.
The Bitcoin network was deployed in 2009, released as open-source software when Nakamoto mined the first block of the blockchain (also known as the Genesis Block.
This bundle of transactions contained the first 50 Bitcoins ever created. From there, other early contributors mined BTC until 2010, when programmer Laszlo Hanyecz made the first known commercial transaction – he used 10,000 BTC to buy two pizzas from the american fast food chain Papa John’s.
Interesting fact: As of this writing, that amount of Bitcoin is worth over $1 Billion USD!
Since then, Bitcoin has been traded over 800 million times, with the earliest significant transactions taking place in darknet markets. The largest of these markets was Silk Road, created by “Dread Pirate Roberts”, aka Ross Ulbricht, which traded almost 10 million Bitcoin throughout its existence.
How Does Bitcoin Work in NZ?
Bitcoin's Blockchain
The Bitcoin blockchain is a digital ledger that records all transactions made with Bitcoin. It is a decentralized system that operates independently of traditional banks or financial institutions, making it a popular alternative for secure and transparent financial activity.
Note: This is where the acronym “DeFi” comes from, meaning ‘Decentralized Finance’.
Each transaction made with Bitcoin is verified and recorded on the blockchain, which is maintained by a network of users around the world in an autonomous, trustless fashion.
This decentralized system ensures the security, censorship resistance, and accuracy of Bitcoin transactions, while also making it difficult for fraudulent activity or hacking attempts to occur.
The blockchain also ensures BTC can not be counterfeited, making it’s scarcity absolute.
The use of the blockchain has many potential applications beyond Bitcoin, including in areas such as supply chain management, voting systems, and identity verification. However Bitcoin’s blockchain is the first to ever exist, crediting Satoshi’s work with prestige far beyond creating a universal, censorship resistant, borderless internet cash.
The blockchain industry and its adoption is quickly evolving in New Zealand and around the world, as more industries explore the benefits of this innovative and open technology.
How to Store Bitcoin in NZ
Bitcoin are stored in Bitcoin wallets – which are free to set up, use and operate, and you can set up as many bitcoin wallets as you like. Best of all, you don’t have to ask anyone for permission to use it, to send and receive payments in Bitcoin (BTC).
Until today, you would’ve been accustomed to accessing your various online accounts and services by using your email address and password. In the world of crypto, wallet access and ownership is instead represented by something called apublic and private key pair.
What is Bitcoin Mining in NZ?
Bitcoin mining refers to the computational process of validating and adding transactions to Bitcoin’s Blockchain. Miners use specialized hardware to solve complex mathematical equations and compete with each other to add a block of transactions to the blockchain.
Upon successfully adding a block, the miner is awarded newly created bitcoins along with transaction fees from the transactions incorporated in the block. This process is known as proof-of-work and is essential to ensuring the security and reliability of the BTC network.
Private Keys and Public Keys
Acting as your digital identity and signature, every cryptocurrency wallet is distinct by having its own unique public and private key, with each unique key pair being freshly generated whenever a new cryptocurrency wallet is created.
- Private Key: Private keys are the password to your crypto bank account, and they’re required to sign off on outbound transactions from your wallet. Never share your private key with anyone, and the security of your wallet rides on how safely you store your private key.
- Public Key: Bitcoin public keys are like your crypto bank account number – an address others can use to send you Bitcoin. You can safely send your public key to anyone, knowing they can’t change or open your wallet, but rather use it to send you Bitcoin.
Best Bitcoin Wallets in NZ
Cryptocurrency NZ Chooses Exodus as the best Bitcoin wallet for beginners due to its exceptional features. Being a free wallet, it offers an accessible entry point for newcomers. Additionally, Exodus provides great customer support.
Pros & Cons
Pros Of Exodus Wallet:
- ✔️ Built-in Exchange: Exodus offers the convenience of a built-in exchange, allowing users to easily trade between supported cryptocurrencies without leaving the wallet interface.
- ✔️ Good Customer Support: With responsive and helpful customer support, Exodus ensures that users receive assistance promptly, enhancing their overall wallet experience.
- ✔️ Easy Setup Process: Exodus boasts a user-friendly and straightforward setup process, making it an ideal choice for beginners entering the world of cryptocurrency.
Cons Of Exodus Wallet :
- ❌ Closed Source Software: The closed-source nature of Exodus’s software may raise concerns for security-conscious users, as they have limited visibility into the codebase and potential vulnerabilities.
- ❌ Lacks 2FA Security Protection: Unfortunately, Exodus currently lacks Two-Factor Authentication (2FA), which is an additional layer of security desired by some users to protect their accounts from unauthorized access.
Overview
Exodus is a user-friendly desktop and mobile wallet known for its straightforward interface and built-in exchange. With the ability to swap between over 250 cryptocurrencies, it offers great versatility for users. Beginners appreciate its simplicity and excellent customer support, making it an ideal entry point into the world of crypto.
However, more advanced users might find it lacking due to its closed-source nature, raising potential security concerns. Despite this, Exodus allows custom fee settings and ensures prompt transaction completion, adding to its appeal for users seeking cost-effective and efficient transactions.
Why Do Most Kiwis Explore Bitcoin in NZ?
Most Kiwis who buy Bitcoin (BTC) are either doing it as an investment, or to leverage it’s utility as a decentralized, borderless digital currency. Because Bitcoin is 100% intangible, you can easily transfer it internationally or instead move across countries, with your Bitcoin still stored in the blockchain. As long as you have access to your keys, you can access your Bitcoin from anywhere in the world – and spend it on goods and services as you please.
Although Bitcoin is now a mainstream word, Bitcoin global adoption rates still sit between 1-3%. Regulation and interest from traditional financial institutions has continued to expand, showcasing the world’s interest in the potential of decentralized, universal, borderless digital currency.
Stay humble and stack sats.