What is Bitcoin
Bitcoin is a decentralized digital currency, more of a software application, created in the year 2009 by an undisclosed programmer Satoshi Nakamoto, (the mysterious inventor behind bitcoin) and designed to give online users the ability to make or process transactions via the internet.
In a lay man’s language, Bitcoin is basically a digital currency used for transaction over the internet, and for which no banking system or even a government is needed, or have control over.
Since creation in 2009 hitherto, Bitcoin and many other digital currencies have rapidly gained popularity as well as controversies. A lot of people believed that Bitcoin is very complicated, where as in real sense, it’s a lot simpler than what most people think. Many people also believe that bitcoin represents a new era of digital currency whereas a lot still get confused about it.
Features of Bitcoin
Foremost, Bitcoin is decentralised in nature, meaning that no government or institution has control over it. Nobody regulates its use; this is the most important feature that made people to embrace it especially as it is used to make transactions anonymously.
It also allows payments to be done easily and more conveniently and rapidly unlike the conventional payment systems.
Bitcoin transactions are untraceable to a large extent, No Governments or other agencies can trace the source of your funds.
Just like the internet, anybody can use it. No rocket science is required or long paper protocol is needed to posses or use a bitcoin.
Bitcoin is very volatile in nature, at least for now. Rises up and goes down at any time, mostly due to the fact that nobody regulates its use except the market force.
Benefits and Risks of Bitcoin
Bitcoin is not affected by low inflation, because its mining is limited to just 21 million units. That also means that the release of new Bitcoins is slowing down day after day. Experts and analyst have predicted that the full 21million units would have been mined on or before the year 2140.
The exchange rate of Bitcoin is not regulated by any government worldwide, neither does it depend on the central bank or any entity, and there is no single authority that governs the supply of this digital coin.
Another good advantage of Bitcoin is that it can be stored offline on someone’s local hardware. This process is called cold storage and it protects the digital currency from being taken or hacked by others. This means you can have billions of dollars worth of bitcoin stored in your computer at home etc.
It is very easy to carry or store. A billion dollars Bitcoins can be stored easily or even transferred easily compared to paper money.
The price of bitcoin fluctuates, and so, a lot people are now engaged in bitcoin trading as a means of making extra income or as a source of living. They buy when price goes down and sell as price appreciates, making gain at the end of the day.
Bitcoin is very volatile. Since the use of this crypto is not regulated in anyway by the government, bitcoin can rise or fall at any given time. A Million-dollar worth of Bitcoin today by virtue of market force, can loose worth to Five hundred thousand dollars or less in the next day.
Bitcoin is more of a computer program and this means it can be hacked if not well secured or protected. A lot of people have loosed their bitcoins from the activities of hackers, even exchanges in the past have been hacked and this resulted in the loss of millions of dollars.
Bitcoin and the Future
Could Bitcoin be the future of online currency? This has always being the most of questions, frequently asked about this crypto currency-Bitcoin.
Bitcoin is gaining popularity and acceptance day by day; in fact, some countries are beginning to adopt bitcoin as a legal tender, and more are embracing the block chain technology of Bitcoin.
A lot of applications and tools have been developed in recent times to facilitate the use of bitcoin. Many school of thoughts see it as the future money. In a way, Bitcoin works and it’s still working, many large online firms now use it as means of payments and for other transactions. In fact, in less than no distant time, Bitcoin ATM will begin to flood the markets. However, there are still lots of critics who believed that Bitcoin is not yet ready, especially with its volatility nature. Experts still maintained that there is still hope that one day Bitcoin will be the future digital currency.
Sources of Bitcoin
Where do Bitcoins come from? This question runs through the minds of a whole lots of people. Everything on this earth has a source or a beginning; something or someone must have created it or introduced it; the case is not different with bitcoin too. As mentioned in the first paragraph, Bitcoin was created or introduced by programmer, Satoshi Nakamoto, and whose identity or whereabout remained undisclosed hitherto.
21,000,000 units of Bitcoin was created, to get any one of the 21Million out, a process called Bitcoin mining is used. This process involves solving of complex mathematical puzzles or problems to win Bitcoins. This is done by a powerful machine that is built to solve these math problems using some kind of algorithms. The process is called Bitcoin mining and the people who own these powerful computers used for this practice are called miners..
Whenever a batch of these mathematical problems is solved, it becomes known as a block. Blocks are then verified and validated by other miners and added to what is called the block chain. The block chain continues to grow with addition of new blocks roughly every 10minutes. Anytime a new block is added to the Blockchain, the miner claims a reward called BITCOIN. Now the more of this puzzle or mathematical calculations you solve, the more bitcoin you have.
Mining is not really an easy venture because these super computers takes a lot of power in the process, and some even get blown up by overheating during process. More so, the problems get harder and more complex as coins are mined and the rate of production also slows down
As at May 2017, tonly 72 Bitcoins were mined per hour (that is, 12 every 10 minutes)
The last of the 21Million Bitcoin rewards is expected to be mined in 2140
I hope this article has helped you with a better knowledge about Bitcoin and all its potentials. Read also: How to make money trading bitcoin at the comfort of your home.
Please use the buttons below to share this articles to your friends on the social media.