Many of us have heard about cryptocurrencies like Neo, Bitcoins, Litecoin, and USD, and so on. But the most common Cryptocurrency people have been familiar with is Bitcoins. But few people might know what a Bitcoin is. This article is especially for those people who want to know about Bitcoins.
Working of a Bitcoin
The Bitcoins are like online cash that came to the market during 2009. Unlike our traditional currency system, Bitcoins do not have Banks or any other government agencies. The Bitcoins stands out to be the first in online trading, where this digital money transaction and storage depends on computer networks, which helps in solving out complex business-related transaction problems.
Like we store our money in a wallet or debit card or credit card for spending money, Bitcoins are stored in a digital wallet which is files. These digital wallets can either be stored in a computer system or the cloud. The success of Bitcoins usage depends on the user, the more the business supports Bitcoins as online trading; the more the usage of Bitcoins increases.
Advantages of Bitcoins
The most significant benefits of Bitcoins are it does not suffer from the risk of high inflation. Because the total Bitcoins mining is restricted to 21 million units, hence there will be a slowdown in the process of arrival of new Bitcoins which might take 2050 for all the Bitcoins to be mined. Therefore the government cannot put extra charges in the name of tax as the people are limited to Bitcoins usage. But the traditional currency system suffers from severe inflation as there is no limit in the printing of currency and as a result government imposes several taxes to equate this extra spending.
As the Bitcoins are not dependent upon governments, the rate happens digitally, which is the same for the whole world.
The Bitcoins are easy to carry. For example, even if you have thousands or millions of Bitcoins, all you need a computer memory to store those coins.
Bitcoins can be easily transacted, and it happens very quickly also. It will just take less than one day or even 2 hours for transactions. But the traditional currency system will take 2-3 workings for a deal to happen and it has lots of restrictions like minimum balance criteria, the limit in the amount of transaction, and so on.
Risks associated with Bitcoins
The Bitcoins transaction is recorded in a public ledger known as ‘Blockchains'. Here all the Bitcoin transaction details are logged as blocks linking to the wallet address of the sender. But if anything issues arise related to security, there is no means of tracking who was the reason or from where the Bitcoins are sent.
The Bitcoins wallets are just files. So if the data are being hacked or corrupted by Virus, the entire Bitcoins in the portfolio will be lost. So every wallet must be protected with a proper security mechanism.
If by mistake the Bitcoins are sent to some wrong Wallet address, the sent Bitcoins are not reversible.
Money making with Bitcoins
One can easily earn money with Bitcoins using trading, selling, and buying the Bitcoins. Using online trading agencies, the Bitcoins can be traded in the market, which can be purchased at a low price or sold for a high price. Website like deadlinenews.co.uk will help you do this trading easily.
During 2013, the value of the 1 Bitcoin was around $1100, and hence many people stared to prefer Bitcoins and started purchasing and buying and investing with the business, who accept Bitcoins. But at mid-of 2014, there was a sudden decrease in the value of a Bitcoin value, where 1 Bitcoin was equivalent to $500. This fall happened as there was news like Bitcoin worth 740,000 were stolen, where people have lost money invested in Bitcoins. Again later, in 2015, there was a sudden increase in the Bitcoin value. So there will not be stability in the Bitcoin market.
So, in the future, the usage of Bitcoin can be successful if there is a solution for tracing and more robust security mechanisms. And business accepting Bitcoins must also extend their help for the wide-spread usage of Bitcoins across the world!