Bitcoin has been in the news in recent weeks, but many people still don’t know about it. Could Bitcoin be the future of online currency? This is just one of the most frequently asked questions about Bitcoin.
How does Bitcoin work?
Bitcoin is a type of electronic currency (Cryptocurrency) that is independent of traditional banking and came into circulation in 2009. According to some of the major online merchants, Bitcoin is considered to be the most well-known digital currency that relies on computer networks to solve problems. complex math. problems, in order to verify and record the details of each transaction made.
The Bitcoin exchange rate does not depend on the central bank and there is no single authority that governs the supply of CryptoCurrency. However, the price of Bitcoin depends on the level of trust that its users have, since the more major companies that accept Bitcoin as a payment method, the more successful Bitcoin will be.
Benefits and risks of Bitcoin
One of the benefits of Bitcoin is its low risk of inflation. Traditional currencies suffer from inflation and tend to lose their purchasing power each year as governments continue to use quantitative easing to stimulate the economy.
Bitcoin does not suffer from low inflation, because Bitcoin mining is limited to only 21 million units. That means the release of new Bitcoins is slowing down and the full amount will be mined over the next two decades. Experts have predicted that the last Bitcoin will be mined by 2050.
Bitcoin has a low risk of collapse unlike traditional currencies that are dependent on governments. When currencies crash, it leads to hyperinflation or the disappearance of savings in an instant.
The Bitcoin exchange rate is not regulated by any government and it is a digital currency available all over the world.
Bitcoin is easy to carry. One billion dollars worth of Bitcoin can be stored on a memory card and put in your pocket. It is that easy to transport Bitcoins compared to paper money.
A downside of Bitcoin is its untraceable nature as governments and other organizations cannot trace the origin of their funds and as such may attract some unscrupulous people.
How to make money with Bitcoin
Unlike other currencies, there are three ways to make money with Bitcoin, saving, trading and mining. Bitcoin can be traded on open markets, which means you can buy Bitcoin cheap and sell it high.
Bitcoin volatility
The value of Bitcoin fell in recent weeks due to the abrupt halt of trading on Mt. Gox, which is the largest Bitcoin exchange in the world. According to unverified sources, the trade was halted due to a malleability-related theft that was said to be worth more than 744,000. The incident has affected investor confidence in the virtual currency.
According to the Bitcoin chart, the Bitcoin exchange rate rose to over $1,100 last December. That’s when more people became aware of the digital currency, then the incident with Mt. Gox happened and it dropped to around $530.
In 2014, we expect exponential growth in the popularity of bitcoin worldwide among merchants and consumers, Stephen Pair, co-founder and CTO of BitPay, “and we anticipate seeing the most growth in China, India, Russia and South America.
India has already been cited as the next likely popular market that Bitcoin could enter. Africa could also benefit greatly from using BTC as a currency of exchange to avoid having a functioning central bank system or any other country that relies heavily on mobile payments. The expansion of Bitcoin in 2014 will be led by ATMs, mobile applications and Bitcoin tools.
Bitcoin World Experiences
More people have embraced the use of Bitcoin, and supporters hope that one day, consumers will use the digital currency for online purchases and other electronic offerings. Major companies have already accepted payments using the virtual currency. Some of the big firms include Fiverr, TigerDirect, and Zynga, among others.
The future of Bitcoin
Bitcoin works, but critics have said the digital currency is not ready for mainstream use due to its volatility. They also point to Bitcoin exchange hacking in the past that resulted in the loss of several million dollars.
Supporters of digital currencies have said that there are newer exchanges that are overseen by financial experts and venture capitalists. The experts added that there is still hope for the virtual currency system and the expected growth is huge.
I hope this article has helped you all gain a much clearer understanding of Bitcoin, the potential, does Bitcoin work, and how Bitcoins work. For more Bitcoin articles, weekly trends, insights, and updates, please subscribe to our blog post.