Bitcoin is a remarkable cryptographic achievement and the ability to create something which is not duplicable in the digital world has enormous value… incredibly useful for many computer applications.
-Dr. Eric Schmidt, Former Google CEO
Hi. Are you also a part of the group that finds the concept of Bitcoin confusing? No issues! You are not alone my friend. Even after so many years, the virtual currency has been a trending debate, but still not well understood. In this blog, we are going to try our best to help you understand Bitcoin cutting all the technical jargon.
What is Bitcoin?
Bitcoin came into existence in the year 2008, all thanks to Satoshi Nakomoto (a person or a group of anonymous people). The prime goal was to create an alternative to banks, using blockchain, a distributed ledger technology, as its backbone.
Bitcoin is an innovative payment network that uses peer-to-peer technology exempting the need for mediators. This decentralized digital currency has been able to bring in the revolution in different sectors since its launch. You can easily exchange Bitcoin for other products, currencies, and services but in some countries only.
Do you know? The search for real Satoshi Nakamoto is still on!
What makes Bitcoin different?
First of all, Bitcoin is a virtual currency i.e. it exists only online. They are different from national currencies and not created by a specific government or related bodies. Bitcoin doesn’t have control of anybody.
How does Bitcoin work?
Bitcoin is just like a computer file that is stored on your smartphone or your computer. The cryptocurrency is backed by a source code that makes use of complex algorithms to prevent the illegal duplication or transaction of Bitcoin units. It is impossible to break the source code of Bitcoin and hamper its supply.
This is why one cannot detect the history of spent, sold or received Bitcoins.
What are the benefits of Bitcoin?
Many people have termed Bitcoin as the future of money. But why so? Take a look at the benefits of Bitcoin below.
- Low transaction fees
Bitcoin offers very low transactional fees. There are no account fees with Bitcoin and the transaction fees for bitcoin payments are significantly lower as those made by credit and debit card purchases.
- Safe and secure
Bitcoin keeps the information safe. No one, literally no one, knows who is sending or receiving it except the two parties. The system provides full anonymity and there is no middle man. Moreover, your personal information is subtracted out of the transactions and users aren’t exposed to identity theft.
- No paperwork
Get rid of all sorts of paperwork. Bitcoin handles everything online, hence you need not go around banks or financial institutions. Anyone, from anywhere, can accept Bitcoins in minutes.
- Mobile payments made easy
Bitcoin allows users to pay via their mobile phones in an instant. You can keep your money in the mobile wallets and even use it online.
- Far away from currency fluctuations
Currency risks can be a nightmare. Bitcoin has its fair share of price changes, but, most of the time, prices tend to escalate. Just keep an eye on the market and take decisions wisely.
The popularity of Bitcoin is seeing steady growth. Even if it sees a steep decline in prices, the cryptocurrency is not going anywhere for sure. Before you get all excited and open your laptop to invest in Bitcoin, it is highly recommended to take some time to dive into the details, understand its working and check whether it will be profitable for you or not.