A-Z Guide of Bitcoin December 2017 India
Bitcoin is an online currency that is still in its infancy. It’s different from the physical currency that we use every day. You cannot touch or see this digital currency. The Coin word, in the end, may remind you of traditional metallic coins but that is not the case. It is a virtual digital currency and is stored in an online Bitcoin wallet. It is gaining traction as we speak. So we at ShoutArticle decided to educate our readers about this upcoming digital currency.
Bitcoin was created by a Japanese person named Satoshi Nakamoto in 2009. It is a “ Peer-to-Peer Electronic Cash System” meaning that there is no third body acting between the people who are interested in cash transaction or investment. People themselves act as a bank.
The important thing to note is that there is no centralized controlling authority like a bank which controls or determines it’s value. Just as 1 Rupee is equal to 100 paise and 1 dollar is equal to 100 cents, 1 Bitcoin is equal to Satoshi, which is one hundred millionth of a single bitcoin (0.00000001 BTC).
The unit has been named in collective homage to the original creator of Bitcoin. As of May 26th, 2017, one Bitcoin is equal to 156374.35 Rupee or 2423.99 Dollars. As there is no centralized authority, its value keeps on fluctuating.
How to use Bitcoin:-
It is similar to physical currency but in a digital form. It serves the same purpose as physical currency does, which is to buy and sell commodities. The only difference is that cash transaction is done over the internet using Bitcoin Blockchain network.
Now you will be wondering what is this Bitcoin BlockChain network?
A blockchain is a public ledger(A record in which commercial accounts are recorded) of all Bitcoin transactions that have ever been executed. As I already mentioned before that there is no centralised authority, people act as banks and use this blockchain network to do all the transactions.
These transactions are stored online forever. A good thing about blockchain is that it is very transparent meaning that all the transactions ever done are accessible to people.
Advantages & Disadvantages of Bitcoins:-
(1) Freedom of Payment
- You can send or receive money anywhere in the world.
- Since transactions are done over the internet, there are no limitations that will halt your transactions.
- You are in total control of your Bitcoin money as there is no central figure controlling it.
(2) Security & Privacy
- Bitcoin transactions keep the personal information of both sender and receiver hidden, thus preventing identity theft.
- Payment can be finalized without one’s personal information being tied to the transaction.
- It supports encryption which adds to the safety of your money.
- Directly allows the user to be in control of their transactions thus maintaining the safety of network.
(3) Transparency Of Information
- Since all the transactions are done over the blockchain network, records are stored online thus making it nearly impossible for anyone to cheat.
- With blockchain, you can see all finalised transactions as they are available for everyone to see. You don’t need to worry about your privacy as your personal information is hidden.
- No one can manipulate Bitcoin protocols, be it an individual, organisation or government. This is because it is cryptographically(The science of coding messages so as to keep these messages secure) secure.
(4) Cost Effectiveness
- Bitcoin payments charge very low fees or no fees at all.
- People can include fee in these payments to make the overall transaction faster. The higher the fee, the more priority it gets in the blockchain network, hence making overall transaction quicker.
- It can be converted into Fiat currency(A legal currency whose value is accepted by the government.) These services have lower fees than credit cards or PayPal.
(5) Reduced Risks for Merchants & Traders:-
- As Bitcoin transactions are irreversible and secure, it eliminates the chances of loss which merchants or traders face due to fraud.
- Because of the transparency of information in the blockchain network, it is very hard to con or cheat anyone.
(1) Still in Development Phase:-
- It is still in its infancy.
- Lot’s of features are still in development.
- To make digital currency secure, new methods, tools, services are being developed.
(2) Lack of Awareness & Acceptance:-
- It is still a new term for the majority of people.
- People have no knowledge about this currency of digital era hence they are reluctant to use it on day to day basis.
- Because of lack of trust in digital payments, most people prefer to use old school physical currency.
- It is network dependent.
- It is slowly gaining traction. Business firms are accepting payments via Bitcoin but majority others have still to catch up.
- Bitcoins have no fixed price as of now.
- There are a limited amount of coins and their demand is rising every day which results in price fluctuation.
How to Earn Bitcoins:-
There are a lot of ways to earn Bitcoin. Some of the easiest and commonly used methods are described below:
(1) Bitcoin Mining:-
It acts as a peer to peer network meaning everyone who uses it acts as a tiny fraction of the bank of Bitcoin. But where do they come from?
With paper money, the government decides to print and distribute money.Bitcoin is not controlled by central government. Miners use special software to solve the mathematical problems. Once they solve the problems, a fixed amount of Bitcoin is provided to them in return.
This provides a smart way to issue the currency and also create more incentive for more people to mine. Since miners are the one who approve Bitcoin transaction, more miners mean more secure network.
The blockchain network automatically changes the difficulty of mathematical problems depending on how fast they are solved.
Earlier people used their personal computers to solve these problems. Later it was discovered that a PC with powerful Graphics Processing Unit was able to do calculations at much faster rate than traditional PCs.
(2) Exchange Real Money For Digital Currency:-
What you need to do is buy a Bitcoin online for real physical cash. For example, you can buy one Bitcoin for 156374.35 Rupee. Then you can either keep it in your online wallet or sell it to some buyer depending on the market conditions.
As the values are always fluctuating, you can wait for the value to go up and then sell it to someone interested thus making profit.
(3) Work For Bitcoins:-
This has to be the second simplest method to earn Bitcoins. What you need to do is provide your goods and services in exchange for Bitcoins rather than accepting the traditional physical currency.
(4) Gambling and casino games:-
If you are searching for a simple way to earn Bitcoins online, you may try gambling. However, while it might seem to you as easy money, gaming has a number of risks.
Bitcoin is definitely the currency of the future. It has more advantages than disadvantages. And the majority of disadvantages will fade away once this digital currency starts to mature.
Bitcoin, as you can see, is not perfect. This is mostly due to the fact that Bitcoin is still a relatively young and new currency. People are just beginning to become more aware of it.
In order for Bitcoin to succeed, more people need to understand what it is and not let their preconceived notions distort the concept of digital currencies.For more updates on Bitcoins keep following our website. We update our content every day.