We’re well aware that Bitcoin is an entirely digital currency that lets its users trade money without the involvement of any third-party authority (such as bank, government etc.). Also, these trades are made anonymously, that means no personal information is given out or even required for a transaction.
Out of the many perks of Bitcoin, two happen to stand out the most:
- With Bitcoin, you can exchange money almost instantly with anyone anywhere in the world (but do check if Bitcoin is banned in that country or not). You don’t require a bank account, just a Bitcoin wallet that could be installed on your smartphone, tab, computer etc.
- You aren’t required to mention any personal details which reduce or eliminates the risk of identity theft.
Bitcoin Mining & Blockchain:
For understanding Bitcoin, one must understand how Bitcoin mining works. It is the process behind the creation of bitcoins. During this process, complex mathematical equations are solved by mining hardware in order to verify and generate a block. Every time a transaction takes place, it is tracked digitally by computers in a record, where all transaction details are described.
Bitcoin miners are the people who own those computers and confirm transactions. Moreover, they’re also paid in bitcoins and sometimes even paid a fee for the transactions. Since there’s no involvement of a central authority, miners ensure whether the right amount has been transferred and each member has the right balance after the transaction is completed.
These transactions are shared onto a public ledger, also known as, the Blockchain, which can be accessed by anyone. Every transaction that ever took place is mentioned here along with the Bitcoin address linked to it.
Now you must be wondering, what’s a Bitcoin address?
Let me help you. In order to own bitcoin(s), one must have a Bitcoin wallet. You can get all sorts of wallets, hardware, and software. Install one on your phone, computer or just purchase a physical one. After you’ve got your personal wallet, the next step is generating a bitcoin wallet address and a private key. This is the address you’re going to share with everyone, whenever you want to make a purchase or transaction. Whereas, a private key is meant to be a secret as it basically holds the key to your coins, if you lose your private key, you lose everything.
Remember! Every transaction generates a new Bitcoin address and this is the reason for its anonymity. No one can actually trace the transaction back to you since it’s always a different address.
While Bitcoin has major advantages compared to fiat currency, it’d only seem fair if the drawbacks are pointed out as well.
- The Bitcoin network is also vulnerable to hackers and viruses. Remember, you cannot enter any personal details on a site promising to give out free bitcoins.
- Bitcoin is highly volatile, which means that its price is constantly fluctuating.
- Another drawback is that there are only 21 million bitcoins available. So nobody knows what’s going to happen once it reaches that limit.
- If you lose your wallet, those coins are gone forever, unless you’ve created a backup of it.
Introduction to Bitcoin
Bitcoin is a new cryptocurrency in the digital world. To begin with, the bitcoin network isn’t under control of any one central authority with Bitcoin investment. Which means, no banks! No need of heavy fees for transactions. No need of central authority’s order to confirm the transaction and you can carry out transactions anonymously. Also, bitcoin stores details of every single transaction that ever happened in the network, in a huge version of a general ledger called the blockchain, which keeps a record of every transaction and verifies them through proper ways.
How Bitcoin works?
Bitcoin is pretty much like cash for the internet and is used to purchase things electronically.
How does Bitcoin work?
Out of 10 biggest cryptos, Bitcoin Cash took the biggest hit on Friday as its value dropped by ~42% in one day.
Over the previous week, the South Korean crypto market‘s Bitcoin Cash frenzy and the reconciliation of BCH on the CoinBase and its digital currency exchange GDAX prompted a meteoric boost in the value of Bitcoin Cash.
Within seven days, the cost of Bitcoin Cash surged from $1,760 to $4,300, increasing by more than 144 percent.
As allegations against Coinbase’s potential insider exchanging of Bitcoin Cash rose, the cost of Bitcoin Cash encountered a minor revision, from $3,500 to $3,300. Still, a couple of hours later, the cost of Bitcoin Cash crested at $4,300, because of the rising interest for the crypto in South Korea.
For a concise timeframe, CoinBase and GDAX suspended Bitcoin Cash exchanging given its unforeseen unpredictability and suspicious value development of BCH before the coordination of Bitcoin Cash by CoinBase and GDAX. CoinBase CEO Brian Armstrong composed:
“I take the confidentiality of non-public data very seriously as CEO. Given the cost increment in the hours driving up the announcement, we will lead an investigation regarding this issue. If we discover confirmation of any worker or contractual worker damaging our arrangements — directly or indirectly — I won’t falter to fire the person quickly and make a legal move.”
So, Is BCH Going To Recover?
The latest slump in the cost of BCH isn’t just specific to BCH. Each and every digital currency in the market, from the biggest to top 100 have fallen in value. Bitcoin, Ethereum, Litecoin, Ripple, Monero, and IOTA have recorded more than 30 percent slump in cost in the course of recent hours.
Thus, the cost of Bitcoin Cash will probably recoup if the crypto market can recuperate quickly. Throughout 2017, the whole digital money market had not encountered a hit of this size in which each cryptocurrency in the market was influenced.
However, experts have noticed that the current cost adjustment of crypto money was essential, given the exponential increment in value and market valuation of cryptographic money since January 1.
Story Credit: ccn.com
As Bitcoin goes through another day reaching a new mark and huge publicity, it is important to inform the public what makes it so different from our paper money.
This post will outline the pros and cons of both the currencies and explain why Bitcoin is achieving all the fame and fortune.
USD and other Fiat Currency Systems
Fiat means “simple” which is pretty self-explanatory. Paper money was introduced into the system in 1861 to help fund the Civil War. The printing of paper money is regulated by a country’s central bank in order to keep the flow of money in line with monetary policy. Moreover, the value of fiat currency is not determined by what it’s made of, rather it is the economic laws of supply and demand that dictate its value. They are occasionally updated to new versions containing security features difficult to counterfeit to create illegal copies.
Advantages of USD
- Can be easily transferred, stored and claimed. You can easily get your cash in physical form with just a single trip to the bank.
- It has the ability to inflate and deflate accordingly to adjust the impact economic problems.
- Metals such as gold, are free to be used for commercial purposes, by not being tied to a currency.
- It is very divisible, flexible and digitally usable. (with the help of credit cards)
Bitcoin & the future of money
Bitcoin was created as a cryptocurrency, by an entity known as Satoshi Nakamoto. People from all over the world can exchange products, credits, and services instantly- without the need for a bank.
The Bitcoin network relies on the blockchain, which is a shared public ledger. It is sort of a database design, where all the nodes hold a copy of the entire blockchain history. These nodes are distributed around the world and attempt to solve complex mathematical equations to confirm a transaction and record it in the blockchain. The nodes are run by mining pools, bitcoin enthusiasts etc. with high computing power. Therefore, the more the computing power on separate nodes, the more secure the network is.
Advantages of Bitcoin
- Bitcoin transactions can be carried out instantly. Money can be sent with ease from one end of the world to the other easily.
- No or very less transaction fees. Bitcoin transactions are extremely cheap with very little or no transaction fees to be charged.
- It is infinitely divisible. At the moment, 1 bitcoin can only be broken down into million smaller units, which are known as satoshis.
- There is nothing hidden with Bitcoin, it is completely transparent. We are aware of the supply of bitcoins and with that, we can even predict its future.
Should Bitcoin be preferred over digital currencies?
Whenever something new is introduced, there is always a certain amount of fear and resistance present in traders. However, with the rapid growth Bitcoin has shown in the past few years, it is becoming every investor’s need. Even a small investment can show twice the doubling of your deposit in a relatively short time period which is not possible with traditional currencies. Bitcoin has stabilized a lot in the past year and with its short supply and increasing demand, it is definitely not slowing down anytime soon.
To be honest, this is up to your personal preferences. Also, people invest in bitcoin because it shows a good profit in a short amount of time, some do it to learn more about the cryptocurrency world while others just enjoy it. Due to its popularity and drastic growth, I’d recommend everyone to get acquainted with it.
Here’s a graphical representation of the differences of Bitcoin vs Paper money outlined:
Tags: bitcoin future, bitcoin news.