Understanding Bitcoin and it’s working
The rise of digital currency – Bitcoin has been significant in the past few years. It went from becoming £3,600 in March 2020 to exceeding more than £27,000 in recent days. As Bitcoin has become the talk of the town in the digital currency world, we see this 12 years old currency becoming a global phenomenon in recent years. We see people making huge money by investing in cryptocurrency. Yet, there are many who fail to understand Bitcoin and the way it works. It would be interesting for them to get a basic understanding of this digital currency; let’s explore it:
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A Bitcoin is usually defined as a virtual currency, digital money, or cryptocurrency, which completely works in the virtual world. In layman’s language, it is an online version of cash. You can go online shopping with bitcoin, thus buying a wide range of products and services. However, not all shops accept this currency, while in a few nations, it is even banned. While we see a few companies are now investing in this domain with its growing influence in the market. For example, in October 2020, PayPal announced that its customers can now buy and sell Bitcoin. The physical Bitcoins one sees in pictures can be a novelty. These have no value without the private codes that are printed over them.
The working of Bitcoin
Each bitcoin is nothing but a computer file, which is stored in an app, usually called a digital wallet on a PC or even a smartphone. These Bitcoins can be sent to digital wallets during any digital transaction. Each and every transaction of bitcoin is recorded in a public list known as the Blockchain. With this, it becomes possible to trace the history of bitcoins, thus barring people from spending coins, which they do not own or make illegal copies of the coin, or even nullify the transactions.
How can you obtain Bitcoins?
There three key ways of obtaining bitcoins through Bitcoin Code, which are enlisted below:
- You can buy bitcoins with the help of your real currency.
- You can sell a number of products and allow people to pay you in Bitcoins.
- Or you can create bitcoins with the help of your computer program.
Creating a new Bitcoin
To make the Bitcoin system functional, people have the choice of making their PCs process transactions for everyone. The computers are allowed to work to carry out some incredible amounts of complex sums. At times, these people are rewarded with bitcoin as an owner. People establish powerful computers in order to try and get Bitcoins, and this process is known as mining. With this, it has become difficult to prevent people from making too many Bitcoins. However, it takes years to mine a single Bitcoin, as it involves a very complex program. At the end of the day, you could invest more money in the process of mining it for gaining a single Bitcoin with the mining efforts.
Why do people want Bitcoins?
There are several reasons why people like Bitcoins; some of these include the following:
- There are people who like the fact that Bitcoins are not controlled by any bank or country.
- People feel the liberty of using Bitcoins anonymously despite the fact that all the transactions are recorded. No one would ever come to know anybody’s account number unless the user declares the same.
- Even the richest man on this earth, Elon Musk, claims to be a big supporter of Bitcoin for the anonymity and ease of use. He even changed his Twitter bio to #BitCoin. With this endorsement, more and more people are getting attracted towards transacting in Bitcoins.
Is Bitcoin Secured?
As we know the fact that all the transactions are recorded publicly, hence it is extremely difficult to copy Bitcoins or make fake ones. It is not possible to lose the Bitcoin wallets or delete them same. You can even store your Bitcoins in any remote location in case you have any fear of getting attacked by any cybercrook. People who fear that dealing with Bitcoin can be a risky business primarily mean that the value of the digital money can fall or rise depending upon its market. However, this does not mean that you lose them.
There is no doubt about the fact that Bitcoins are valuable as these can be easily exchanged for any goods or services and thus remain as good as having cash.