Bitcoin is a cryptocurrency. Cryptocurrency means digital money(currency) which work as a medium of exchange where its records will be stored as computerised database. It does not have a physical form and it is not under a centralised control. It does not come under any banking systems. Cryptocurrency works as a blockchain and serves as a money exchange database. Its records are stored in a ledger to verify coin ownership transfer.
Bitcoin is first released in 2009.BTC or XBT are the commonly used abbreviations of Bitcoin. As it is not centralised, it is not recognised or supported by any countries or any banking institutions. Normally currencies are under regulations of central governments. But the management of bitcoin is not under any policy. So, bitcoin is unaffected by economic inflation. Value of bitcoin will change only according to the demand of people as per bitcoin up sign up. Its value alters when its usage alters among people. So, the value of bitcoin depends on people not on government.
We have earlier seen that bitcoin works as a blockchain. Bitcoin cannot work without a blockchain. Many people are attracted towards bitcoin due to its anonymous nature. This anonymous character of bitcoin is attained due to blockchain technology. A group of persons known by a common name Satoshi Nakamoto developed a blockchain database. Its main feature is that it’s a shared database and it can be worked in multiple servers at the same time. A central server is absent here. So, it is difficult for hackers to hack information. Here transactions are viewable for public and people can verify it. So, it resists corruption.
The same Satoshi Nakamoto who created blockchain is also behind development of bitcoin. Though bitcoin is not issued by government, it is accepted worldwide. As the working of bitcoin is online, transactions are always P2P (peer to peer). But they do not just involve two users. Transactions are always public and they are verified by nodes. These nodes exist because of other users.
How to acquire Bitcoin
Purchasing and mining are the two ways in which we can buy bitcoin. In mining, all transactions will be verified. It will be added to ledger. New Bitcoins are also released through the process of mining. Any internet users can do early mining. During mining, the user will make blocks using transactions and it will be made as a puzzle. The person who solves the puzzle first will be able to play the block and they will get reward. A set amount of bitcoin and new amount of Bitcoin released will be rewarded. Number of rewards for each block is decreasing every year. So, people are seeking other methods to purchase bitcoin. For purchasing Bitcoin, only few steps are needed. A wallet is created and select your exchange. Set the amount you want to buy and transaction will be completed.
Here the first step is creating a wallet. Wallet means devices where users can keep their encryption keys that allow the users to access their money. Wallets can be either software or hardware. There are many digital currency exchanges and online marketplaces where cryptocurrency transactions are made.
Bitcoin was a valueless currency when it was first released. But gradually it’s value increased. But it’s value show fluctuations. There are highs and lows. As the market of Bitcoin change rapidly and unpredictably, it will not be a good idea to buy bitcoin when it is at a great high. If we buy bitcoin after a significant drop in value it will be a wise decision. Many companies and governments are gradually accepting Bitcoins for their transactions. So in the nearby period Bitcoin can attain a sustained value.
Bitcoin and world economy
Debts, political and social issues such as migrations and unstable governments have negative impact on world economy. Investors seek alternative ways to protect themselves from these problems. Gold is used as an investment for many years. Bitcoin can also be used as an alternative investment. As it is not under any centralized banking, it will be safe during difficult times.
A main advantage of using bitcoin is that it’s value do not change according to location. Many companies are already using bitcoin as payment. As it works through blockchain technology, corruption and fraud will not happen. As it works through online exchanges, it is easier for trade.
So, from this we can conclude that Bitcoin has attained a significant position in world economy. It is being accepted as a currency by many countries and organisations. Therefore we can consider Bitcoin as a future investment.
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