All You Need To Know About Bitcoins
Bitcoin is a digital or virtual currency that is not tangible and does not exist in the real world. Bitcoin is basically virtual money that you can use online to buy things, or you can use it simply for investments. However, many companies do not accept Bitcoins, and several countries have also banned them. Lately, the influence of Bitcoins has been immense, and the interest in this virtual currency is also growing consistently.
In addition to that, one of the biggest online payment services, PayPal, recently made an announcement that it would allow its clients to sell and buy Bitcoins on its platform. This also led to an increase in the popularity of Bitcoins, and more people trust it now.
Bitcoin information is hard to trust because there is a lot on the internet, and you cannot really know which sources are reliable and which ones are not. Here, you will find authentic information about Bitcoins so that you can make an informed decision about investing in Bitcoins.
Bitcoin Explained In A Simple Way
Bitcoins are digital currencies that are completely decentralised, which means that you can make transactions with them, buy or sell them without the need of having any intermediary such as a bank. It can be described as a payment system that is completely electronic and has cryptographic proof. There is a public ledger that records each and every transaction that ever took place using a Bitcoin. Hence, it is very difficult to fake it. That said, Bitcoins are not backed by any government institution or banks, so there is no guarantee of their value except the systems that build them.
Bitcoins were launched in 2009, and ever since then, their value has risen dramatically. There was a time when the value of one Bitcoin was $150, but as recently as October 26th, 2021, its value has gone up to more than $62,000. There are only 21 million coins that are circulating in the market currently, so the supply of Bitcoins is limited. Hence, it is expected that the price of this currency will go further up. Today, more and more financial institutions and investors are treating Bitcoins like digital gold in order to hedge against inflation and market volatility.
How Does Bitcoin Work?
The Bitcoin working process is quite straightforward. It works with Blockchain technology. Bitcoins have a digital record that is distributed on the Blockchain. Blockchain technology, as the name suggests, comprises small units that are called blocks, and each block contains all the necessary information such as time, data, value, buyer, seller, and a unique code that identifies each transaction. These entries are strung together chronologically, creating a digital and virtual chain of blocks.
As mentioned above, Bitcoin is a decentralised system. This means that no organisation controls it. Bitcoin is like Google Docs insofar as any individual can work on it. It is not owned by anyone but can be used by anyone who has its link. Moreover, as different people use and update it, everyone’s copy gets updated in real-time. Although it might sound pretty unsafe and risky, given anyone can edit and update the Blockchain, this feature is actually what makes Bitcoins so secure and trustworthy. A transaction block can be added to the Blockchain of Bitcoins after being verified by the Bitcoin majority holders. Moreover, the unique codes that are used to recognise all the transactions and wallets of users must confirm the correct encryption pattern. These unique codes are random and long numbers, which makes it all the more difficult to be produced fraudulently. In fact, fraudsters do not have a lot of odds in their favour when it comes to guessing the right code for a Bitcoin wallet.
Why Do People Want To Invest In Bitcoins?
Most people appreciate the fact that this cryptocurrency is not controlled by banks or the government. Moreover, individuals can spend their Bitcoins anonymously and even though the transactions are recorded, people cannot know your ‘account number’ unless you share it with someone yourself.
In January 2021, in an online chat conducted with other social media users, Elon Musk shared that he is the biggest supporter of this cryptocurrency network. He even changed his bio on Twitter to #bitcoin. Musk has shown his support for Bitcoin and other online currencies time and time again. This has caused a lot of movement in their values, thanks to his influence and own personal wealth. This endorsement of Musk led to a massive increase in the value of Bitcoin.
Are Bitcoins Secure?
Bitcoin transactions are publicly recorded. Hence, it is not easy to copy them, spend Bitcoins that you do not own or make fake ones. That said, you might delete your Bitcoins accidentally and lose them forever, or you might even lose your Bitcoin wallet. Although there have been thefts from websites that allow users to store their Bitcoins remotely, the platform itself is super secure. Hence, investing in Bitcoins can prove to be quite lucrative for you in the long run!