Bitcoin is the type of digital currency and is also called crypto-currency; which use the encryption techniques to manage the generation of units of currency and verify the transfer of funds, operating independently of a central bank. It is an innovative payment network and a new kind of money. An unknown programmer or a group of programmers invented it, under the ‘Satoshi Nakamoto’ and released as open-source software in 2009.
Bitcoin-The New Crypto Currency
Bitcoin uses peer-to-peer technology to work with no central authority or banks; managing transaction and the issuing of bitcoins is carries out collectively by the network. Bitcoin is open source, and its design is public. Thus nobody owns or controls Bitcoin, and everyone can take part. Painstaking mathematical computations create Bitcoins and policed by millions of computer users called miners.
Bitcoins take the power of creating money away from central federal banks and deliver it to the general public. Tax authorities cannot freeze or examine the bit-coin accounts, and middleman banks are entirely unnecessary for bit-coins to move. As per the research conducted by Cambridge University in 2017; 2.9 to 5.8 million unique users are using a crypto-currency wallet, most of them using bitcoin.
How bitcoins work
Bitcoins are virtual coins designed to be self-contained for their value and don’t need banks to move and store the money. They act as physical gold coins and possess value. You can use your bitcoins to purchase goods & services online, or you can tuck them aside and hope that their rate increases over the years. Thus, you can trade them from one personal wallet to another.
You can store a small personal database on your computer, smartphone tablet or somewhere in the cloud, which acts as a wallet.
Bitcoins possess specific characteristics as below:
- It is decentralized, and thus, no central authority controls it.
- It is easy to set up in seconds and with no fees payable. On the other hand, conventional banks require a lengthy procedure to open a bank account.
- Transaction fees are minuscule.
- Bitcoin accounts do not link names, addresses or other personal information. Thus, you can hold multiple bit-coin accounts.
- Bitcoin stores the information of every single transaction that ever takes place in the network in a massive version of a general ledger; called the blockchain. Thus, it is entirely transparent.
- Bitcoin network processes the payment fast. You can send money anywhere within minutes.
- It is non-repudiable. Thus, if you send the bit-coins, there is no getting them back unless the recipient returns them to you.
Bitcoins Values and Regulations
A bitcoin varies in value daily. You can check today’s price of bitcoin at the website https://www.coindesk.com/price/. Bitcoin currency is wholly unregulated and completely decentralized. The currency itself is self-contained and un-collateral that is; there is no precious metal behind the bit-coins. The value of each bit-coin remains within each bit-coin itself. Speculators buy as many as they can and hold them for price appreciation.
A massive network of people, who contribute their personal computers to the bitcoin network steward bit-coins. They are called minors and; act as a swarm of ledger keepers and auditors for bit-coin transactions. They are paid by earning new bit-coins each week for their accounting work they contribute to the network.