What One Needs to Know About Bitcoin
What is Bitcoin
Bitcoin has earned the reputation as the world’s most exciting cryptocurrency. When many people are making huge profits from relatively small investments, heads turn. This new form of money is Bitcoin. Being a digital cryptocurrency, it is completely intangible. Unlike dollars, there are no notes or coins. In addition, the transactions occur anonymously, meaning there is no help from banks and middlemen. Today, it can be used to pay for restaurants or shop online. The more its popularity grows, the more the business world is embracing the new technology as a form of payment.
So how does Bitcoin get exchanged
This is facilitated by the blockchain technology. In the conventional financial market, there is a bank which acts, as the entrusted middleman to supervise our money. The banks are at liberty to charge you fees, block your account and monitor all your transactions. In addition, banks are vulnerable to data breaches. The blockchain technology facilitates the direct sending of money from peer-to-peer. Instead of a bank monitoring the transactions, thousands of computers do that instead.
This can be likened to the way in which thousands of people monitor Wikipedia to ensure it remains accurate. With the blockchain technology, the transactions come in the form of a block that resembles the previous one. In that aspect, if an external actor interfered with one block, it will affect the entire chain. It also takes a great deal of energy to maintain the network. As a result, the network remunerates the miners. The miners maintain the network, approve transactions and hold it to account without an overseeing middleman.
The supply
Unfortunately, the supply of Bitcoin is not unlimited. There will only be 21 million Bitcoins at the very end. This scarcity is responsible for its value aspect. However, many people are interested in the blockchain technology more than the coins. Blockchain technology can be used in various industries such as, in medicine to verify health records, etc. It can also be borrowed in the aviation industry among others.
How to get started
The easiest way to get Bitcoin is by buying it. Mining is quite demanding. You will need highly specialized software and powerful hardware rigs to run it. This consumes a great deal of electricity when powering the entire thing. To buy Bitcoins, you will have to set up an account with major exchanges. The account will require you to connect a bank or credit card so you can transfer money to the Bitcoins. The process takes roughly 20 minutes unless the exchange is experiencing an outage. Most exchanges are struggling to keep up with the demand. Outages might complicate the buying or selling process. As more information about Bitcoin spreads, there are many investors, customers, and speculators who want a piece of the action.
Level of anonymity
Unlike popular assumption at the beginning, Bitcoin cannot be classified as anonymous. All transactions are publicly visible. The transactions have to be inscribed and published on the blockchain. This creates a Bitcoin address.
How much Bitcoin can I buy
If you have endless piles of cash, a good number of exchange platforms have a cap. This might be daily or weekly. The purchase cap will depend on the duration your account has been active, its purchase history and the payment method used.
