All You Need To Know About Bitcoins

What is bitcoin

What is Bitcoin all about?

Bitcoin is a cryptocurrency or digital currenct which is only present in digital format.

It has no physical existence like all other regular currencies.

According to popular beliefs,bitcoin is the term first coined by Satoshi Nakamoto in 2009.But there is a lot of speculation surrounding it.

But the fact is bitcoin is emerging one of the most dominating currencies worldwide threatening the existence of the conventional currencies.

While Japan has strongly supported Bitcoin,but there are different opinions about this also.

James Dimon of JP Morgan Chase has called it more than a ‘fraud’.India has also made her stand and opposed  bitcoin till now.

But the reality is bitcoin has striked so hard everyone is thinking twice before making any final stand.

Can you make Bitcoins?

Technically Yes . You can make Bitcoins.

But making the bitcoins is a bit complicated and called ‘mining’.

It is like mining the gold.

The people involved in bitcoin is called bitcoin miners.Below is the bitcoin chart :

coindex

Source

With the price of over $15K USD  for 1 bitcoin till date bitcoin is also much costlier than gold.

How do you get a Bitcoin?

You can get bitcoins primarily by three ways:

  • Buying it from bitcoin exchanges.
  • Mining the bitcoins.
  • Accepting bitcoins in exchange of goods and services.

How do you get Bitcoins for free?

Bitcoins can be obtained free by mining only.But this mining is not a simple task.

As bitcoins are decentralized form of currency there is really no-one controlling them.

So there should be some mechanism to validate the transaction.

Suppose John  sent some bitcoins to you,now how can you verify that John will not send the same bitcoin to any other person.That’s where mining comes into play.

These miners actually validate these type of bitcoin transactions to earn bitcoins.

Now these validation requires a lot of computation power and involves solving complex mathematical problems to get these coins.

The mining generally includes using cryptographic hash functions to validate the transaction data.

Generally it requires millions of computing power world wide to do such type of mining.

As the number of bitcoins is also limited the mining is also getting more and more difficult day by day.

So yes you can get bitcoins by free but it requires a great effort to do this.

How does the Bitcoin work?

Bitcoins are entirely virtual currency and which has no physical existence.You can’t touch it.

Once you get some portion of bitcoin.It is securely deposited in a virtual personal wallet.

When you need to transact you then just simply send some bitcoins to the destination wallet.

There is no middleman or central authority involved in it.

You can also buy many good and items with it.

How do I buy Bitcoins for cash?

You can buy bitcoins for cash from authorized bitcoin exchanges.

Though there are some minor differences in terms of how these bitcoin exchanges work ,but most of the exchanges works like this.

You first need to choose your bitcoin exchange,open an account with them,depost cash,then the seller will transfer bitcoins in your wallet.

It is necessary to have a bitcoin wallet before purchasing any bitcoins.

You can also consult with these exchanges if you do not have any wallet.

Most of the time these exchanges also offers such facilities.

Here are some below authorized bitcoin exchanges below:

Please verify minutely about the above exchanges before making any such investments.

Is it illegal to mine or trade Bitcoins?

The use of trading and mining of bitcoins varies according to different countries and corresponding authorities. While some countries have made it am alternative currency ,others have imposed strict ban on bitcoins.Trading and using bitcoins in these countries is treated as a  criminal offence.

On the flipside,there are many regions and countries who have not any specific rules about that and in these regions bitcoins are used among some private communities ,

For example countries like India has not imposed any specific rule against bitcoins yet so people trading bitcoins in India is not doing any criminal offence by law.

Here is a list of some major countries whre bitcoins are treated as legal and illegal.

Major Countries Where Bitcoins Treated as Legal:

  • European Union
  • Algeria
  • Nigeria
  • South Africa
  • Namibia
  • Zimbabwe
  • Canada
  • United States
  • Mexico
  • Nicaragua
  • Jamaica
  • Argentina
  • Brazil
  • Chile
  • Colombia
  • India
  • Saudi Arabia
  • Pakistan

Major Countries Where Bitcoins Treated as Illegal:

  • Morocco
  • Bolivia
  • Ecuador
  • Kyrgyzstan
  • Bangladesh
  • Nepal

Source: https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory

How safe is the Bitcoin?

Now when its come for safety no body can guarantee the returns.Since it is a type of financial investment there are also some underlying risks involved when dealing with bitcoins.

The value of bitcoin is very volatile and depends lot on several market factors.

It is also  a decentralized currency.

You may think that when there is no central authority controlling the whole thing how much safe it is.

But believe me with the blockchain system involved in the background it is very safe at least 99% safer than traditional currency.

Think it this way.

Why are Bitcoins worth so much?

The rise of bitcoins has been a tremendous story.Bitcoins have jumped from $1,000 this year to a record above $5,800 in no time.

More and more people are going towards bitcoins and the there is no sign of slowing down the trend in near future.

But why Bitcoin is growing so fast?

There are several socio-political reasons behind it.

Firstly,the traditional currency is much more dependent on socio-political decisions.For example in there is a constant growth of increasing number of countries which have public debt greater than 100% of its GDP.

So why invest in something that is so much

So people are now investing in something that has less effect in the long run.

Another big reason is the increased privacy.

There is a ongoing global trend to stop physical transaction and to build a paperless economy where governments can trace every transaction.

In case of bitcoins ,the privacy is the prime concern and it is near to impossible to break this privacy.

Next reason is the stability.

Since from its  inception it has been a long eight years and this technology is only growing.

Bitcoin is here to stay.

This is also a great factor which is motivating alots of people to invest in bitcoins.

How do I buy Bitcoins anonymously?

As I mentioned earlier,buying bitcoins can be made through bitcoin exchanges.Som exchanges ask you for your identification documents.Some don’t.

If you want to be anonymous choose the appropriate one you prefer.

Why are there only 21 million Bitcoins?

To answer the question,I don’t find any convincing answer of it.

Some experts said that the propose of this limilitation is predefined to mark the exclusiveness of the currency.Some explained the number is great enough to feed the mankind because mining bitcoins is a herculean task.

But whatever the reasons may be if the limit is reached somehow ,I think the whole decentralized system would require the change.

But it is the thing for the future!

For now no conclusive answer yet.

Why Bitcoin is not traceable?

No.All bitcoin transactions are stored in a distributed public ledger called a block chain.Anyone can technically can inspect the transaction and can identify the user.

But the degree of privacy and security makes it much more  anonymous than any other conventional currencies.

If someone just want to spy on you he simply can.t do it because the process is so much resource intensive that it simply do not worth it.

What is the future of Bitcoin? Will it become a mainstream currency?

Bill Gates mentioned in 2014 during an interview that Bitcoin is “Better Than Currency

 

Richard Branson thinks bitcoin is working and he is an investor of Bitpay a Bitcoin payment processing platform.

So what do you think?

The future of bitcoin and such cryptocurrencies is bright and it is on the way to estabilish itself as a mainstream currency in near future.

With the increase of digitization and globalization bitcoin will be our only currency!

What do you think about bitcoin?

Is it a bubble  or the next big thing after internet?

Please share your thoughts regarding this in the comment box below and I will be happy to answer this.


Update: The End of Bitcoin in India?

Just Another hit for cryptocurrency investors in India.

Arun Jaitley,the finance minister has declared in his 2018-19 budget that the present government will try everything to stop any cryptocurreny operations in India.

With this declaration, the future of cryptocurrencies in India looks bleek.Though he doesn’t mention of bitcoins but it is clear that he is got giving any chance for bitcoins.

But  the interesting part is the Narendra Modi government had also announced the setting up of committee to understand the implications of virtual currencies.

This also indicates that the government is still in the research phase and trying to understand the proper mechanism of these cryptocurrencies.

Arun Jaitley has also made a statement that the blockchain technology may be used in financial transactions in future.

So all in,there is confusion everywhere and still there is not any solid future plans about it.

Will India come up with its own cryptocurrency?

Will it ban it altogether?

Only time will tell and until then we need to wait and nothing else!


Update: According to Bloomberg,China is making restrictions to limit bitcoin mining in the country which is a major setback for this emerging cryptocurrency.

The major bitcoin mining compaines like BTC.Top is already shifting its operations to overseas.

This is quite interesting to see whether it affects the value of bitcoins.


Happy New Year and have a blast!

image Source:https://pixabay.com/en/users/MichaelWuensch-4163668/

(Under CCO Creative Commons)

 

Soumik Ghosh

About Soumik Ghosh

Hello Readers, I am Soumik Ghosh,founder of Tekkibytes. In this blog I write about buzzing Technology news Tips,Internet Marketing etc. Stay Connected!

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10 Comments on “All You Need To Know About Bitcoins”

  1. Bitcoins are great for future money.This is really a in depth post about this future currency.Keep up the good work.

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