There is no doubt that we are surrounded by the word “Bitcoin”. We have heard this name so many times. But the thing is what bitcoin actually is? Is it a special type of coin or something else? Such kinds of questions are mostly asked by those who are unaware of bitcoin. So in this article, we will discuss right from the basics and then the benefits of bitcoin. If you want complete information about bitcoin trading, then you should click here to start trading.
Bitcoin is a type of currency that is held electronically. In simple words, bitcoin is a virtual or digital currency, which means it does not have any physical appearance. It is becoming common that bitcoin is being used for instant payments by using its efficient peer-to-peer technology. There is a limit of 21million set for bitcoins. There is no doubt, bitcoin is a currency, but it is way different from other traditional currencies. The major difference between the bitcoin and other traditional currencies is that the working of traditional currencies comes under the terms and conditions of government and central authorities, while the working and issuance of bitcoin are dealt with by some specialised software computers that are independent of the terms and conditions of the bitcoin.
We know that traditional currencies are kept in our physical wallets and pockets, but we know that there is no physical appearance of bitcoin, so there is also some specialised software in which we store our owned bitcoins. This specialised software is known as bitcoin wallets. The working of bitcoin wallets depends upon the public address and a private key. The public address in the bitcoin wallets is the account in which you store your bitcoins and the private key is the private PIN for the public address. You have to keep your wallet quite safe. Just like if you lose your physical wallet, you lose all your money that is in your wallet, if you lose your bitcoin wallet, you will directly lose your bitcoins.
There are multiple uses of bitcoins. Bitcoins are traded from one authentic user to another. Bitcoins are also being used for buying or selling goods. The price of bitcoin is mostly on the rising side. If we keep analysing its price rate, then we will examine that at the start of 2018, the price of bitcoin was $10,000 and now it is almost $40,000.
There are lots of uses and benefits of bitcoin, but still, it is new in the market and its future is a bit doubtful, as many states are banning bitcoin for their payments. But still, bitcoin is creating many huge impacts in the financial markets. For that reason, there are many states that are accepting bitcoins. Las Vegas is the first-ever American state which has started accepting bitcoin as a payment in 2017.
The Reason behind the Creation of Bitcoin
One of the major reasons behind the creation of bitcoin is to support the financial system. Bitcoin was created by a Japanese Person, Satoshi Nakamoto. There is a complete procedure behind the transactions of bitcoin. The records of all bitcoin transactions are verified by bitcoin network nodes with the help of cryptography and then these transactions are kept in a public-based ledger. This ledger is also known as the bitcoin blockchain.
Bitcoin is printed or created as a reward. The creation process of bitcoin is known as bitcoin mining. You can exchange bitcoin with other traditional currencies such as USD, GBP, etc. You can also use bitcoins for buying or selling goods or services.
It has been observed that by the start of 2015, bitcoin had attracted a number of merchants in it. As merchants and vendors have found their benefits in accepting bitcoin as payment.
Now let’s discuss the major advantages of Bitcoin.
As the use of internet technology is becoming common everywhere in the world, the use of bitcoin is also spreading worldwide. You can accept or pay with bitcoins from any part of the globe.
As I also mentioned earlier bitcoin is being accepted by the majority of merchants in the world. One of the major reasons why merchants are interacting with bitcoin is less fee. Bitcoin transactions seem free as compared to paying with PayPal or credit cards.
Bitcoin transactions are considered faster and easier in processing as compared to the traditional payment methods.