There’s a new name in the finance industry that is ruling many investors’ minds and many industry’s hearts and that is Bitcoin. Although Bitcoin is not the first cryptocurrency yet it’s the most popular one among more than 5000 existing cryptocurrencies. Let’s take a closer look at what Bitcoin is and how it works.
|Index – Choose your topic|
|What is Bitcoin?|
|Brief History of Bitcoin|
|How does Bitcoin work?|
|How does bitcoin make money?|
|Pros and Cons of investing in Bitcoin|
|Where can you buy Bitcoin?|
What is Bitcoin?
Bitcoin is a decentralized digital currency that you can trade in without the intrusion of an intermediary like banks or governments. You can use a peer-to-peer computer network to confirm purchases directly between users. It’s like an online version of cash. You can buy and sell commodities using bitcoin. But not many shops or countries allow legal trading of bitcoin.
Bitcoin’s creator, Satoshi Nakamoto, originally described the need for “an electronic payment system based on cryptographic proof instead of trust.”
Present Price of 1 Bitcoin = $62,085.50 i.e. Rs. 46,50,331.23
Brief History of Bitcoin
Bitcoin gained popularity in 2020 but was launched back in 2009. The blockchain concept has been in talks over decades but turned into reality with a paper “Blockchain: A Peer-to-Peer Electronic Cash System”. In April 2011, Bitcoin was priced at $1. By April 2021, it reached a record price of $65000 before sliding down. Currently, it ranges between $48000 to $65000.
How does Bitcoin work?
Each bitcoin is a computer file stored in a digital wallet on a computer or smartphone. It works on Blockchain technology.
Blockchain technology – It is a system of records information in a way that makes it difficult to change, hack,s or fraud the system. It uses cryptography to link timestamped batches of events together to make sure if tampering has occurred or not. This type of data structure helps create new applications that use a blockchain as a trustworthy public database.
How does bitcoin make money?
Bitcoin follows the law of supply and demand and so because of fluctuating demand, there’s always a lot of volatility in its price. Apart from mining bitcoin, people also buy-in in form of currency speculations.
Pros and Cons of investing in Bitcoin
|Potential for huge growth||Price Volatility|
|Helps avoid traditional bank and government intermediaries||Not protected by SIPC|
|Access to private, secure transactions anytime||Limited (but growing) use|
Where can you buy Bitcoin?
Following are the ways to buy bitcoin :
Cryptocurrency exchanges – There are many exchanges like Coinbase and Coindesk. Coinbase is the largest cryptocurrency exchange in the U.S.
Investment platforms – many investment platforms like Zebpay allow you to buy bitcoin easily.
Peer-to-peer purchases – you can buy directly through bitcoin owners through peer-to-peer tools.
Bitcoin mining – through technical expertise you can earn bitcoin through mining too.
Bitcoin is growing popular amongst young leaders too. It’s literally the talk of finance town. With the growing interest in stock markets and investment, bitcoin could help in elevating India’s financial literacy.