▶ Coinbase Website: Coinbase.com
▶ CEX Website: cex.io
Do check out my courses here:
What exactly is a bitcoin? Why is there so much hype about it? Is it really worth its value today? Is it completely anonymous?
What exactly is a bitcoin ?
Firstly, it’s a digital currency, which means that its all virtual , it isn’t available like hard cash. The most striking feature of bitcoin is that there are no middle men involved in any of the transactions. Whenever we buy or sell anything online, there is always a bank which under government regulations approves the transaction and takes a small cut from the payment done. Your payment gets recorded by the banks and you can always ask a copy for it. Bitcoin on the other hand is completely anonymous. It is decentralized which means that no banks or even the government agencies have any control on it. Crazy right!
How are the transactions completed?
Let’s say you are paying your friend one bitcoin. Like how we have UPI ID or bank account number similarly there is a recipient address which changes after every transaction and it doesn’t require you to share any personal information while making the payment. When you initiate the payment, there is a group of individual anonymous people called miners who approve the payment. Miner can be anyone: you or me. The computer used for this process aren’t ordinary ones available in the market. They require huge coolant system to keep the temperatures under check. Here’s a catch. The payment doesn’t get approved in the conventional way rather they have to solve complex mathematical problem to approve the transaction and they get rewarded for it. The process is called mining . The entire process takes about 10-20 minutes.
What are the advantages of bitcoin?
1. Its completely anonymous, which means that your personal identity is never exposed in any transaction , unlike in normal transactions where the name of the sender is clearly visible
2. Its decentralized. The main drawback for other currencies is that you can only transfer a certain amount to another account overseas daily and the changing rules of the banks for overseeing these transactions at times cripples the sender from sending money. No need to worry about bank holiday and payment limits. Also the government cant freeze your assets and you have complete freedom over it.
3. Its neutral. No individual can try and manipulate the entire functioning of the process to his advantage. This has been one of the key factors for the rise of bitcoin as after the 2008 crisis, the world was shocked by the manipulative nature of the banks.
4. It cant be stolen. In these increasing times of online fraudulent activities , bitcoin provides a state of the security. In conventional currency, a few details are required to gain complete control over your finances, in bitcoin a person will require physical access to do the same.
What are its disadvantages?
1. Due to its anonymous and non-regulated method of functioning , it is being used for a lot of illicit activities.
2. Huge volatility. Bitcoin values works on the basic demand supply principle, since the number of bitcoins available is capped at 21 million, its value will increase on a daily basis. When bitcoin was launched, each bitcoin was valued at 0Rs and now its close to a staggering 40 lakh rupees! Since no government agencies have any control over it, there is no insurance against its values. This might cause spending surges which will cause the Bitcoin economy to fluctuate very rapidly, and unpredictably
3. Once lost, its lost. If we lose our credit or debit card we can easily request for another one. Banks insure us of a certain amount in case of any mishaps related to your account. So if you lose your bitcoin access once, its lost forever.
What’s the future of bitcoin?
Recently many countries including India has banned bitcoins and has also asked companies involved in such transactions to make such information public. This has been done as flourishment of a non-regulated currency poses a threat from the economic point of view.
Do you think it was a right move by India?
Website:
Follow me on Facebook:
Follow me on Twitter:
Follow me on LinkedIn:
Follow me on Instagram:
Buy my courses:
Buy my books:
Buy my new book on How People Buy Online from amazon:
#bitcoin #bitcoininvestment #bitcoinban #bitcoinhype #whatisabitcoin #howbitcoinworks #basicsofbitcoin #basicsofcryptocurrency #bitcoin2021
▶ Coinbase Website: Coinbase.com
▶ CEX Website: cex.io
Youtube version
