Cryptocurrency or the digital currency is an encrypted decentralized currency which is transferred between peers and is confirmed in a public ledger via a procedure known as mining.
Cryptocurrency aka digital currency, over the past few years, has become a subject of popular discourse; however, the word still leaves many perplexed. Notably, the first and most famous cryptocurrency, Bitcoin has remained a topic of interest as well as confusion. Bitcoin has provoked curiosity and fascination as its value has soared to above $4,000, a new high point, turning some people who hoarded vast amounts early on into millionaires.
However, what exactly it is, how does it work and what is its future are some questions that strike every mind. So, here we try to simplify things for you.
It has increasingly gained public eye and has become a global phenomenon. Cryptocurrency or the digital currency is an encrypted decentralized currency which is transferred between peers and is confirmed in a public ledger via a procedure known as mining. Like any other currency, it is a medium of exchange but it is designed for the purpose of exchanging digital information through a process which uses principals of cryptography.
Basics of Bitcoin:
- Bitcoin was the first cryptocurrency to be created in 2009. It is a form of digital currency which is created and held electronically.
- Unlike other currencies, bitcoins are not physically printed or controlled by any institution. Since it is free from any government control and banks’fees charges, bitcoins are used as a tool for private and anonymous transactions.
- It runs on a decentralized ledger which is kept running by miners, known as the blockchain. The miners have powerful computers that crunch transactions and are rewarded in bitcoins.
- So as to create bitcoins, users must have to generate blocks on the network. Each block on the network is created cryptographically by harnessing users’ computer power and is then added to the blockchain, letting users earn by keeping the network running.
- As per the bitcoin protocol, only 21 million bitcoins can ever be created by miners. At present, there are 15 million in circulation, each of which was worth more than $4,000 ($3,080) at the time of writing.
- Bitcoin transactions are irreversible, which means once you’ve sent bitcoins, there is no way of getting them back unless the recipient returns them.
- Earlier this year in March 2017, for the first time the value of a Bitcoin, at $1,268, exceeded that of an ounce of gold ($1,233).
- The uses of Bitcoin are varied, from investing cash, funding companies, transferring money, to name a few. The fact that a bitcoin wallet cannot be associated with any individual makes it a lucrative option for criminal activities like drug dealing and cybercrime. More than 1, 00,000 retailers across the globe accept it as a mode of payment. Some of the big companies accepting bitcoin as payment include Overstock, Microsoft, Dell, Expedia, PayPal, Wikipedia, Twitch and Rakuten and many more.
The mind behind Bitcoin:
Satoshi Nakamoto is the brain behind the revolutionary invention of Bitcoin. Despite various attempts to unveil the person or people behind the name; Satoshi Nakamoto remains the mysterious founder of bitcoin and blockchain.
Investment in Bitcoin:
Since bitcoin is a deflationary currency, it appreciates in value, and that is the reason people buy and hold bitcoin. To put it in context, an investment of US $ 100 in January 2011 would roughly by valued at US $ 1.2 million at today’s exchange rate of US $ 3,800 per bitcoin. After a few level years, its dollar price soared again this year, and it has peaked at around US $4,900.One thing anyone investing in bitcoin should always remember, its price is notoriously volatile as it has also had massive intraday declines in the past like in May it fell by US $400 in one day.
Disclaimer: This is not an investment advice. It is of paramount importance that everyone should do his or her own due diligence before investing in any product, platform, tokens etc. Cryptocentral.io does not endorse any content or product published on this page. Our aim is to simply provide all the readers with the latest information in the field of cryptocurrency / blockchain industry that might be of interest to our readers.