Basic Knowledge about Bitcoin

Bitcoin is a decentralized, peer-to-peer digital cryptocurrency. Bitcoin’s creator intended Bitcoin to be used as an alternative currency that allows for anonymous transactions and prevents double-spending. Bitcoin has gained worldwide attention and is being adopted by many mainstream online retailers such as Reddit, Namecheap, and 4Chan. Bitcoin can also be held as an investment or exchanged with other currencies of the world. The bitiq app is considered as one of the most authentic platforms that are helping many bitcoin investors. 

Bitcoin for Payment

Some Bitcoin users see Bitcoin as a way to avoid fees that PayPal and credit card companies charge (typically 2-3%). Other Bitcoin users believe Bitcoin was invented so people could store their money themselves without having to rely on banks creating debt-like fractional reserve lending practices.

Mining bitcoins requires powerful computer hardware; thus businesses providing mining equipment are making profits. Bitcoin is more attractive as an investment when the number of new bitcoins miners are allowed to create in each block (every 10 minutes) decreases over time, thus Bitcoin’s supply dwindles with time. Bitcoin is also subject to value spikes and drops due to its high volatility.

When Bitcoin first started, users were able to mine Bitcoin using their regular desktop computers or laptops. Today, Bitcoin mining requires special hardware that can cost anywhere from a couple of hundred dollars to tens of thousands depending on how strong your computer setup is. The most popular companies are Butterfly Labs, Avalon ASICs, KNCminer, and BitFury. New companies enter the market every month providing even stronger equipment at reasonable prices making Bitcoin mining accessible for anyone who wishes to participate.

Bitcoin as a Money Saviour

Many Bitcoin users see Bitcoin as a way to avoid fees that PayPal and credit card companies charge (typically 2-3%). Other Bitcoin users believe Bitcoin was invented so people could store their money themselves without having to rely on banks creating debt-like fractional reserve lending practices. Bitcoin also allows for anonymous transactions. Bitcoin has been adopted by many mainstream online retailers such as Reddit, Namecheap, and 4Chan. Bitcoin can be used internationally with little or no transfer fees depending on the user’s country of residence. Bitcoin is decentralised allowing for more freedom when compared with other currencies from more powerful countries that have strict regulations in place, which significantly increases the desirability of Bitcoin. This means that Bitcoin is valued because people choose to use it as a currency and Bitcoin is not subject to the whims of a government or central bank. Bitcoin exchanges exist where Bitcoin can be bought and sold, however, Bitcoin does not require an exchange for one to hold Bitcoin. Bitcoin has become more and more popular over time and demand continues to rise exponentially.

Bitcoin was created in 2009 by an anonymous tech mastermind. Bitcoin is a decentralised peer-to-peer cryptocurrency that only exists online. By using cryptography, Bitcoin’s tech mastermind was able to create something that acts like cash but has the conveniences of credit cards.

  Because Bitcoin has no central bank or governing agency, each purchase is essentially private and anonymous. This draws in people who want to buy illegal goods without worrying about repercussions from governments or banks.

  For example, at the time of writing this article, Bitcoin has dropped significantly in value (it was worth $1160 USD on January 1st, 2017; it’s worth $762 USD right now). This dip may be because China recently banned Bitcoin exchanges. Since there is no governing Bitcoin agency, Bitcoin’s value is determined entirely by market demand.

  But Bitcoin may have a more functional future as a mainstream currency. Bitcoin has been growing in popularity since it started and transactions with Bitcoin are getting faster and cheaper. Because Bitcoin is decentralised, governments don’t get to monitor or tax the network like they would traditional currencies. This allows Bitcoin users to spend their money without revealing their identity (it’s possible to be anonymous with Bitcoin).

      However, Bitcoin isn’t perfect. As cryptocurrency technology evolves, so do Bitcoin’s shortcomings. For example, because there is no governing body that can monitor illegal activities online, money laundering becomes easier. Also, hackers steal thousands of Bitcoins daily due to security flaws at various major exchanges. The Bitcoin community is working to solve Bitcoin’s flaws and make it a more versatile currency.

      Bitcoin isn’t the only cryptocurrency. Other cryptocurrencies include Litecoin and Dogecoin, which were both created in 2011. Bitcoin, Litecoin, and Dogecoin aren’t controlled by a single agency either, making them decentralised currencies as well. However, Bitcoin is the most popular cryptocurrency and is used for about 70% of all Bitcoin transactions.

PRIYA JAMES is a Cyber Security Enthusiast, Certified Ethical Hacker, Security Blogger, Technical Editor, Author at GBHackers On Cyber Security

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