Some say it is like carrying swizz bank in your pocket while others see as a currency without a government. Yes, Bitcoin is phenomena, unfortunately, the world will require adapting to these changes as this could be similar to the next internet revolution.
Bitcoin is a digital currency which can be used to transfer its value to other parties without having an intermediary party (ex., Banks) in between. Anyone who holds bitcoin, their ledger balance is stored in multiple locations on a computer network, called blockchain or in simple accounting term is a public ledger.
The concept of Bitcoin can be intriguing and the driving factor behind this invention was attributed to 2008 Banking financial crisis, where people lost most of their savings and eventually banks were required to bail out by the government.
Bitcoin is growing with the philosophy that neither government nor the central bank should control the currency and benefits of financial gain should be distributed to the people instead of some individuals.
Today, Bitcoin has become trending topic in media, growing number of people investing in this coin scaled its value. If you had bought a few hundreds of bitcoins in 2007 for a dollar and you still hold it, I personally congratulate you for being a millionaire.
5. The Number Of Bitcoins Is Limited.
Unlike traditional currency, printed unlimited by banks. Bitcoin has limited supply of only 21 million coins.
Satoshi Nakamoto, unknown founder, and the creator has set this numbers based on the principle of artificial scarcity (Their numbers are being released roughly every ten minutes and the rate at which they are generated would drop by half every four years until all were in circulation). Therefore, the max limit will be reached in 2140.
4. Bitcoin Transactions Are Anonymous And Public.
Bitcoin transactions are publicly traceable yet anonymous. Every Bitcoin user can actually choose whether to sign on or not his name before executing the transaction. But even if the user wants to keep their confidential identity, all transactions are still registered and publicly monitorable.
3. You Can Transfer Bitcoins Anywhere In The World
One can transfer bitcoin from anywhere in the world, all it requires is an internet connection. This has made cross-border payments easier. Perhaps this could even disrupt remittance industry like western union. Though transactions are peer-to-peer and easier, one should keep in mind about transaction fee, the charge paid when one send Bitcoin from one wallet address to another.
Recently, the transaction cost of bitcoin increased to $20. this has to do with a combination of two factors such as increased transaction numbers, and the limited volumes of transactions that the Bitcoin network can process per second.
This fee is part of the reward given to a Bitcoin miner, who dedicate computer resources to verify each transaction and update ledger balance in blockchain (distributed ledger or public ledger). Though fees are decided by the sender yet miner has the option to prioritize and sync ledger based on higher fees. So remember higher the fees faster the transaction.
2. Transactions Are Irreversible.
Unlike traditional transactions, bitcoin transactions are irreversible unless beneficiaries agree to repay. So one needs to be careful before giving destination address. This address is a.k.a as the public key (comparable to a bank account number), which is shared with others in order to receive payment into one’s wallet.
Alternatively, one will receive the private key (comparable to a bank PIN), which is required to keep secret and used to authorize your bitcoin transaction.
1. Bitcoin is Independent And No Agent or Government Have Control.
Because Bitcoin is distributed in implementation, no country or government have control over Bitcoin or its Blockchains database.
All transactions are recorded directly, transparently, and spread across millions of servers. Those who want to alter or falsify Bitcoin transaction data must hack millions of servers at the same time.
Author: Varun Raj