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Everything about the powerful bitcoin ; Decentralized Currency

Everything about bitcoin
Everything about bitcoin

Everything about the powerful bitcoin ; Decentralized Currency

Bitcoin is a new trending decentralized currency that was created in 2008 by an unknown person using the alias Satoshi Nakamoto who is still unknown to the world. Transactions are made with no middle involvement – meaning, no banks are there! Bitcoin can be used to book hotels on Expedia, shop for furniture on Overstock around and buy Xbox games etc. But much of the hype is about getting rich by trading it all around the world now. The price of bitcoin skyrocketed into the thousands dollar in 2017 and continuously rising.

Each and every Bitcoin transaction that’s ever been made exists on a public ledger accessible to each and everyone worldwide, making transactions hard to reverse and difficult to fake at all. That’s by design: Core to their decentralized nature, Bitcoins isn’t backed by the government or any issuing institution, and there’s nothing to guarantee their value besides the proof baked in the heart of the system, giving it more firm trust that’s why people are investing so much into it.

Since its launch in public domain in 2009, Bitcoin has risen dramatically in value. Although it once sold for under $150 per coin, as of March 1, 2021, one Bitcoin now sells for almost $50,000 and value is still increasing. While the wild volatility might produce great headlines in public, it hardly makes Bitcoin the best choice for new investors or people looking for a stable store of value.

What one can do with bitcoins?
What one can do with bitcoins?

Why bitcoin?

Bitcoins can be used to buy merchandise anonymously that make it more mysterious. In addition, international payments are easy and cheap because bitcoins are not tied to any country boundation or subject to regulation of taxes. Small businesses may like them because there are no credit card fees for bitcoins. Some people just buy bitcoins as an investment, hoping that they’ll go up in value in future soon.

Buying bitcoins /Buy on an Exchange

Many marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies worldwide. Coinbase is a leading exchange, followed by Bitstamp and Bitfinex. But security can be a concern: bitcoins worth tens of millions of dollars were stolen from Bitfinex when it was hacked in 2016 easily.

How Does Bitcoin Work?

Bitcoin is built on a distributed digital record system called as block chain. As the name implies, block chain is a linked body of data, made up of units called blocks that contain information about each and every transaction made, including date and time, total value, buyer and seller, and a unique identifying code for each exchange made. Entries are hold together in chronological order, creating a digital chain of blocks and make it functional.

“Once a assigned block is added to the block chain, it becomes accessible to anyone who wishes to view it, acting as a public ledger of crypto currency transactions,”

Block chain is decentralized, which means it’s not controlled by any one organization anywhere. “It’s like a Google Document that anyone can work on easily,” says Buchi Okoro, CEO and co-founder of African crypto currency exchange Quidax. “Nobody possess it, but anyone who has a link can contribute to it anyhow. And as different people update it; your copy also gets updated.”

Transfers

People can send bitcoins to each other using simple mobile apps or their computers internet. It’s similar to sending cash digitally in most simple way.

Mining

People compete to “mine” bitcoins using computers to solve complex math puzzles using systematic coding. This is how bitcoins are created. Currently, a winner is rewarded with 12.5 bitcoins roughly every 10 minutes all around.

Bitcoin wallet

Bitcoin wallet
Bitcoin wallet

Bitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. The wallet is a kind of virtual bank account that allows users to send or receive bitcoins direct, pay for goods or save their money. Unlike bank accounts, bitcoin wallets are not insured by the FDIC or any other agency. 

Wallet on computer: You can accidentally delete them. Viruses could destroy them.

The anonymity of bitcoin

Though each bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed – only their wallet IDs is visible. While that keeps the bitcoin users’ transactions private only, it also lets them buy or sell anything without easily tracing it back to them. That’s why it has become the currency of choice for people online buying drugs or other illicit activities now.

Bitcoin’s future in question

No one knows what will become of bitcoin. It is mostly unregulated, but some countries like Japan, China and Australia have begun weighing regulations to control its flow now. Governments are concerned about taxation and their lack of control over the currency of the country.

How to Buy Bitcoin

How to buy bitcoins?
How to buy bitcoins?

Most people buy Bitcoin via exchanges, such as Coinbase. Exchanges allow you to buy sell and hold crypto currency, and setting up an account is similar to opening a brokerage account—you’ll need to verify your identity and provide some kind of funding source, such as a bank account or debit card and others.

No matter from where you buy Bitcoin, you’ll need a digital wallet in which to store it. This might be what’s called a hot or a cold wallet. A hot wallet (also called an online wallet) is stored by an exchange or a provider in the cloud server. A cold wallet (or mobile wallet) is an offline device used to store Bitcoin and is not connected to the Internet. Some mobile wallet options include Trezor and Ledger now.

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How to Invest in Bitcoin

No matter where you choose to hold your Bitcoin, people’s philosophies on how to invest it vary globally: Some buy and hold long term, some buy and aim to sell after a price rally, and others bet on its price decreasing and so on. Bitcoin’s price over time has experienced big price swings, going as low as $5,165 and as high as $40111 in 2021 alone.

Should You Buy Bitcoin?

In general, many financial experts support their clients’ desire to buy crypto currency, but they don’t recommend it unless clients express interest genuinely. “The biggest concern for us is if someone wants to invest in crypto and the investment they choose doesn’t do well, and then all of a sudden they can’t send their kids to college,” “Then it wasn’t worth the risk.” the investment in bitcoins is purely a risk that can navigate you anywhere towards profit or loss.

The speculative nature of crypto currency leads some planners to recommend it for clients’ “side” investments. In a very real sense, Bitcoin is like a one single stock, and advisors wouldn’t recommend putting a sizable part of your portfolio into any one company. At most, planners suggest putting no more than 1% to 10% into Bitcoin if you’re only passionate about it. “If it was one stock, you would never allocate any significant portion of your portfolio to it at all,” 

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