What is Bitcoin?
Still, wondering? That is where a lot of traders lost their chance for a lifetime back when bitcoin was just released. Those who invested and secured the coin for a long, could really feel blessed by the angle, isn’t it? The bitcoin value has surged more than exponentially in these many years. After 2009, its already been over 10 years and the value is soaring for good. So, why not take a look at the chances we still have to make some great decisions while we can.
Bitcoin is a digital currency. We often hear everyone calling it the ‘cryptocurrency’ and so it is. Only available online, bitcoins can be exchanged for real money. You can consider it the online replica of cash. This is so because one can use bitcoins for buying and selling goods. The number of bitcoins you own is stored in the digital wallet. One can send you bitcoins in your wallet and you can share it from your wallet to others online as well.
In short, if someone accepts bitcoin for their services and goods, you are good to go. However, it is important to note that many countries have banned the usage of bitcoin. So, you must continue after understanding the law within your jurisdiction.
The transactions using bitcoins are recorded on a public ledger. Hence, every bitcoin shared has a history online which is accessible to everyone. It makes it completely impossible to replicate, fake, or undo the transactions with bitcoin.
Creation of Bitcoin
New bitcoins are added using the process calling mining. This is completed when someone using their computational power solves very complex sums. In return, the greater number of bitcoins are added to the ecosystem and few are rewarded to the one who completed the sum. With time, these sums keep getting difficult, hence, not allowing the release of newer bitcoins in higher numbers.
That is why, if you like to own bitcoin, you must think of another way, unless you are pretty good at solving puzzles. You can buy it on bitcoin exchanges using your fiat money or other cryptos.
Why is Bitcoin so Popular?
Though there are a few risks of trading with bitcoins, the perks are the ones that always take the upper hand. With many prospects of high profit and other advantages, bitcoin trading is highly popular. Find out why.
With fiat currencies, international transfers are mostly tiresome. You must wait for days, own some special account preferences, cannot send during public holidays, need to visit the bank, and whatnot. Especially when the amount is bigger, you may have to go through a bit of scrutiny. However, this is not the case with bitcoin. Because the money is virtual, the entire transaction happens online. You even do not have to wait for days or let the holiday pass. If you want to transfer the amount, you can do it right away.
With such freedom, it provides users ease of money transfer crossing international borders. You got the control of your bitcoins and you can use it whenever you need it.
The transactions are recorded on a public ledger. If you have transferred bitcoin, the final transaction will be visible to everyone. Hey! Do not worry. Your personal details aren’t shared. This means that you can continue transferring or accepting bitcoins without worrying about how many people know that already. The public ledge only contains the approval of each transaction with fewer details. However, the important ones such as your name, address, or the private key are kept hidden.
With such transparency, you can always be assured of your funds reaching the destined party. No more lying around, you got your backups ready.
As you may know, there are several nodes working together for transaction approvals. Every transaction is recorded at each node. Hence, copying any fake transaction to every node becomes close to impossible. This provides bitcoin security from thefts and frauds. Also, the control of the bitcoin is in the hands of the owner. No one can ever use your bitcoins for transactions without having your private key.
Plus, the personal details aren’t required for transactions. This means that you are also safe from identity theft.
Fiat vs Cryptocurrency
While you can use both the payment substitute alternatively, there are a lot of differences that make these currencies poles apart. Fiat currency, the older one, has been around for ages. However, the idea of cryptocurrency is just a few years old. It is still in the development phase and we are yet to understand what all it could uncover. But it does have stirred the waves to fall in its direction.
So, let us discuss the major differences these two have.
- Fiat currencies are centralized, but cryptocurrencies are decentralized.
- To send fiat you need banks of payment institutions to make transactions.
- To send crypto transactions are confirmed by the computers which are connected to the Internet.
- The use of cryptos is limited to online transactions. However, fiat currencies are being transacted online as well as stored physically.
- Cryptos have limited supply. But this is not the case with fiat currencies. These are in abundance without any upper cap deciding what number should remain in circulation.
- Above all, crypto transactions are faster and are cheaper in terms of transaction fees.
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