Source – coinveto.com
Written by Mark at Omentra
Bitcoin is the first type of decentralized Cryptocurrency with the largest market capitalization. It is a network in which person-to-person transactions can be done without the use of an intermediary. Bitcoin can be used to purchase products, services and can be exchanged with other currencies.
What exactly is Cryptocurrency?
Cryptocurrency is a digital asset that acts as a medium of exchange. It uses Cryptography to secure its transactions and keep a track of the assets transferred. It also ensures that the currency cannot be counterfeited. The defining feature of Cryptocurrency is that it does not have any central authority or Government interference when issuing the currency.
When did it come into popularity?
Bitcoin was founded back in 2009 as the first type of decentralized Cryptocurrency, but gained its popularity later in 2016. Bitcoin was originally created by an unknown person or group that go by the name of Satoshi Nakamoto. Since its introduction and rise in popularity, other types of Cryptocurrencies such as Namecoin, Litecoin, Ethereum, Ripple and PPCoin have also joined the game.
Bitcoin was invented as a result of Satoshi Nakamoto trying to create a digital cash system without a central entity. This eventually led to the birth of Bitcoin. Although it has been nearly a decade since its inception, majority of the people are not aware on how Bitcoin works. Due to this lack of knowledge many people have avoided using Bitcoin. By analyzing the below diagram it can be understood how Bitcoin is traded.
Source – Ogilvy.com
What is Bitcoin mining?
Bitcoin mining is the process of adding the transaction records to the public ledger. Bitcoin miners are the ones that keep the network secure by approving these transactions. Mining is an important process, as it ensures that the Bitcoin network remains stable.
It is important to understand that the Cryptocurrency market is very volatile and dynamic. Due to this volatility it is common that the value of the coin drastically increases or decreases regularly. Regardless of this, people invest money in Bitcoin due to its ability to earn high profits.
What are the advantages to using Bitcoin?
- Benefits to the merchants
Using Bitcoin can be highly beneficial for merchants, as there is a very low fees charged for trading. These fees are considerably low compared to credit card charges and other traditional methods used. While many of traditional payment systems have limitations on large payments, Bitcoin holds no limitations.
- Benefits to the buyers
When engaging in overseas transactions, currency conversion will not become an issue with Bitcoin. Further buyers can use Bitcoin wallets through Android, Apple and many other platforms. Storage of coins does not become an issue when trading with Bitcoin as the currency is digital.
Bitcoin ensures that personal information is kept hidden thereby giving protection against identity theft. Users are completely in control of the transactions they make plus Bitcoin can be backed up and encrypted to ensure their safety.
What are the disadvantages of using Bitcoin?
- The volatile nature
Bitcoin remains extremely volatile due to the limited 21 million Bitcoin’s available to supply for the increasing demand. Currently the price of Bitcoin changes rapidly on a daily basis due to this volatility.
- The limited understanding of Bitcoin
One of the major drawbacks of using Bitcoin is the limited understanding that people have over it. Most companies prefer using physical currency over digital currency due to their lack of understanding of it.
- Cryptocurrency is still a work in progress
Bitcoin still has a long way to go in order to become an internationally recognized currency. There are many features that need to be added to the network for it to develop further and reach its full potential.
Where can you find Bitcoin?
There are many websites that Bitcoin can be traded on. Below are a list of websites you can use to trade Bitcoin.
How much is a Bitcoin worth
It is really hard to pin down a certain price of a Bitcoin due to its volatility. At the time of writing one Bitcoin is worth Rs. 1,335,371.02. Due to its unstable nature, the price could skyrocket up or spiral down at any given moment. Below is a graph that shows Bitcoin’s price fluctuations.
There you have it! As expected Bitcoin has its ups and downs. It offers many features that the physical currencies cannot offer. On the flip side, it is a relatively new concept and many people are not aware of how it functions. The term “High Risk – High Return” can be used to accurately explain Bitcoin. Cryptocurrency is a concept that will only get bigger as time goes by and Bitcoin is leading this meteoric rise.
Await our next article about 6 people who got rich overnight from trading bitcoins!