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You might have heard of two-faced people but never of a two-faced globe. One face of the globe is what the older generations have seen and the other side is the digital face which is being shown off to us in this contemporary world. The thing that makes up this digital face of the world is the digital currency: Bitcoin. Now it’s time for the modern world to experience modern currency.
What is bitcoin?
Bitcoin is one of the leading cryptocurrencies. A digital currency is completely virtual. Virtual currencies are a multi-dollar venture providing a vast benefit that is e-money for investment purposes. Marketplaces called Bitcoin cash to allow online exchange of cash in different forms of currencies in your digital wallet which exists either in your computer storage or on the cloud. It is like a bank account where you save your bitcoins for future use. People are facing increased competition which raised 52 million US dollars in November 2019.
A Look into the transaction process
As soon as a new transaction is produced it is distributed among the computer users by the peer to peer. Now it’s time for an accuracy check to complete the transaction, which is done by the computer by solving some equations. This block is then tied with the other blocks that are already containing the history of the transaction. Last but not least that chain shaped into a cluster with the help of other chains.
Why Invest in Bitcoin?
Bitcoins will provide aid in investment, buying merchandise, or for example, booking a hotel, buying furniture, or other stocks anonymously as transactions in the wallet only require data of wallet ID and not the names of the sender and receiver, unlike bank accounts. International payments are effective and cheaper. There is no such fee for service like for example no credit card fees.
The History Leading to The Invention of Bitcoin
Tracing from barter system to physical money to digital money is a whole lot of a roller coaster revolution. This incredible invention of modern money was done on 3rd January 2009. However, the idea was spread to the world on 31st October 2008 by an anonymous group of people, who brought this concept in front of the world’s eyes is known as Satoshi Nakamoto which is debatable as some people say that no such group in the name of Satoshi Nakamoto exists.
An online registered domain named bitcoin.org was silently coming into being. A white document titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was containing an explanation of the power of digital money. “Coins can be sent from user to user on the peer to peer bitcoin network without the need of the intermediates,” says the CEO of Crypto.com.
Bitcoin Mining and blockchain
As mentioned above, no inconvenience of dealing with intermediates (middleman) or bank services is required while transaction of the bitcoin system. Instead, miners are used to verifying the legitimacy of transactions known as blocks. Also, people compete to mine bitcoins with the help of solving Math problems. It’s exactly like a child fulfilling the conditions made by their parents in order to get that chocolate as a reward. To feel that enjoyment of owning that reward and entitling it with the word ‘mine’.
The rate at which bitcoin is mined is very high and fixed in advance. Note that miners are also being paid bitcoins for witnessing the transaction of 1MB. These transactions are recorded on a blockchain that is experiencing exponential growth with Megabytes growing into Gigabytes in the span of every few days. As of 5th Jan 2021, it was 312.46 GB.
Blockchain sounds like a building block of life for miners because they are paid according to the verification of transaction that makes a block. That data in a block is chained together with other blocks and thus forms a blockchain. The idea of the chain is to retain collective control by all of the users.
The Relationship Between Bitcoin and Blockchain
Bitcoin is protocolled by the technology made in 1991 called the blockchain. This correlation is only because of avoiding the use of banks hence reducing the cost alongside providing effective transactions and transparency. IBM blockchain technology is bringing the word bitcoin among them in your round tables.
The Future of Bitcoins and Blockchain
Analyzing the past data of bitcoin, and its price trends and acceptability, one can only wonder how beneficial investing in bitcoin can be for them, in monetary/financial terms. Where the blockchain can be beneficial for the investors, since it can’t be taxed, it has been problematic for the governments. Also, this electronic-currency without a backbone of banks may also aid frauds and scammers as they cannot be traced. Bitcoins and their blockchain come with their pros and cons, and although the cryptocurrency has been favorable for the investors, only time will tell how much advantageous this asset can be for them in the longer run.