Many people have come across the term bitcoin, but few understand what it actually is.
Bitcoin was created in 2009 by a mystery person who only goes by a pseudo name, Satoshi Nakamoto. It can be described as a digital token or a decentralized electronic mode of transaction that can be sent and received globally. This article explains how bitcoin works, it’s advantages, downsides as well as the future with respect to the same.
How Bitcoins are Created
New Bitcoins are generated by a process referred to as bitcoin mining. In simple terms, people compete to solve incredibly complex math puzzles and get rewarded. Currently, a winner is rewarded around 20 bitcoins every 10 minutes.
Acquiring Bitcoin
There are many marketplaces out there known as bitcoin exchanges. There, you can buy and sell Bitcoins using various currencies across the globe. Prior to it’s fall, Mt. Gox was certainly the most popular trading platform, with an estimated 80-90% of the Bitcoin-Dollar trading volume. Since then, a few of the most popular Bitcoin exchanges are Bitstamp, Bitfinex, Coinbase and Kraken. Parties transact and identify each other using digital wallet ID’s, no names. All transactions are completely anonymous. You can purchase Bitcoins from your phone or computer, and then store them in a digital wallet, existing only in the cloud or the user’s personal computer. From there, you are able to
receive, send or save.
Using Bitcoin
The value of Bitcoin changes daily, just like in stock exchange. On average, it currently stands at around $4,370, however, a bitcoin can be subdivided into 8 fractions. This means that you can literally purchase anything, from anywhere in the
universe through your computer or smartphone. The greatest part about it is that no government controls or taxes these transactions. Therefore, you can actively save a lot of time and cash by using the Bitcoin technology.
Advantages of Bitcoin
- You can make Bitcoin your business. For instance, many people have made millions by simply buying bitcoins and reselling when the rate of exchange hikes.
- Recognition at the universal level- this is probably the biggest advantage. Anyone in the world can buy anything from anywhere without any hiccups or extra cost.
- It is accessible by all and transactions are settled immediately.
- Bitcoin cannot be counterfeited like standard currency can.
- International payments are fast and cheap. This is because the Bitcoin currency is not tied to any government or country hence not regulated.
- Small businesses have huge potential for growth if they use cryptocurrency such as Bitcoin. This is because there are no transaction fees or credit. They can channel the saved cash towards constructive development.
The Past and the Future of Bitcoin
Since 2010, the journey of Bitcoin has been an incredible one. The first Bitcoins to be mined were only a sum of 50. Today, they are in excess of 16 million. This is huge. As a matter of fact, in 2017, 1 bitcoin beat the price of 1 ounce of gold.
With many people adopting this amazing method of transaction daily, one thing that’s for sure is it’s here to stay. In fact, some governments such as Switzerland and Estonia are gradually accepting and proposing frameworks that will adopt the technology. Experts say that 10 years from now, Bitcoin will be on a whole new level. They predict that the value of 1 bitcoin could exceed $1,000,000. However, they say that the largest number of bitcoins that can ever be mined is 21,000,000.
It is important to acquaint yourself with the changing world. Be a part of future banking; adopt the Bitcoin way.