Bitcoin is considered to be the first cryptocurrency and is the most popular compared to other cryptocurrencies to date. Like most digital currencies, bitcoin is also decentralized that can be bought, sold, and exchanged directly without a third party in between like banks. Satoshi Nakamoto is considered to be the creator of Bitcoin.
The bitcoin transactions made are stored in a public ledger that is easily accessible to everyone. Thus the transactions done with bitcoin are difficult to undo and hard to interfere with. You can buy merchandise with bitcoin anonymously. As there is no government or other institutions behind bitcoin, it is ideal for cheap and easy international payments. It is a good choice for small businesses as there will be no credit card fees for bitcoin payments.
How to buy Bitcoins?
One of the questions that confuse beginning investors is where and how to buy bitcoins. Some of the ways you can get bitcoins are here.
There are bitcoin exchanges that allow people to buy and sell bitcoins by using other currencies. Bitstamp, Coinbase, and Bitfinex.
Solving complex maths puzzles using computers for bitcoins is called mining. Bitcoins are created through mining. Every 10 minutes, a winner gets about 12.5 bitcoins.
Digital wallets are where bitcoins are stored, The wallets will be either in the cloud or in the computer system of the user. Wallets can be considered as virtual bank accounts used to buy or sell bitcoins. You can also use them to buy goods or services.
As mentioned earlier, all the bitcoin transactions are stored in the public log. But the advantage lies in the anonymity option bitcoin offers. The names and details of the buyer or the seller are not revealed anywhere. The only detail given will be the ID of the wallet. Thus the bitcoin users can keep their transactions private and they can also purchase things without chances of tracing them. But this has become an opportunity for illegal activities too, which is why many countries are not open to bitcoin trading and usage.
Working of Bitcoin
The distributed digital ledger on which bitcoin is built is called a blockchain. Blockchain is made of numerous units that are known as blocks, where data about every transaction is stored. All the entries will be recorded in chronological order and thus a digital chain of blocks will be created. Blockchain is also decentralized and not controlled by any authorities. If a transaction block is to be added to the bitcoin blockchain, it has to be verified by most of the bitcoin holders.
Future of Bitcoin
The future of bitcoin is still a debate. Mostly, bitcoin is unregulated, but there are countries like China, Japan, and Australia, who are reconsidering these regulations. The inability to control bitcoin and the complications associated with the taxation are the factors that are restricting the wide expansion of bitcoin in many countries. But still, bitcoin investors and traders are looking forward to more acceptance of the cryptocurrency.