I will be talking here about a mysterious technology named Bitcoin in the era of 2015 which is enabling a way for one Internet user to transfer a unique piece of digital property to another Internet user. This is an emerging cryptocurrency technology. Transfers are being made such a way, so that security is guaranteed. Here everyone knows that the transfer has been made in crystal clear ledgers and nobody can challenge on the authenticity. Since this technology relies heavily on mathematical algorithms to give it values, it is called Cryptocurrency.
Let’s understand what “Cryptocurrency” is? It is a kind of digital or virtual currency which uses cryptography for security. So it is hard to faking because of it’s security feature. Another determined feature is, they are not govern by any Government body or regulatory, so it is immune to government interference and manipulation. The first imagination of cryptocurrency was came in 2008 by name of “Bitcoin” The anonymous nature of this cryptocurrency transactions makes them perfect for a host of villainous activities such as money laundering, tax dodging, and other online activities which can clearly seen in Silk Road incident.
What is Bitcoin?
Let’s now start with the best inquisitive sentence, “WHAT IS BITCOIN?”
Bitcoin is one of the leading and a kind of cryptocurrency which is decentralized. It is an internet based medium of exchange to send money from point A to point B in an innovative way. Well, it is still vague about the person who started it? Resources says that the first Bitcoin was issued by Satoshi Nakamoto in 2008. Interestingly the smallest fraction of the Bitcoin is named on him. 1 Satoshi is hundredth of a millionth BTC.
Let us understand it more with this great video.
Although this virtual currency is different in nature from physical currencies such as bank notes and coins, its shows similar attributes to it. Bitcoin, symbolize as . It is also known as BTC on exchange as the similar way we know $ as USD. So anyone can buy anything with Bitcoin, Believe me! A payment towards recharge of your mobile or buying any stuff online, making done you micro payments. Hold on! You can buy a house too!
Now you got to be thinking. Exactly, It is same like we can send an e mail to one location to another location for free. Maria can send money to her friend Alisha without paying a hefty amount as service charges by a middle institution.
Why it is being so popular worldwide?
First reason behind of the popularity is that it governed by no one. It is controlled by the unanimity of the market participants. Else the several reasons are really an advantages comparing fiat currencies. It is Fast, Secure and there is very less charges for your transactions.
It is really really fast, than any transaction you initiate whether it is wire transfer or normal pay cheques to other person. Your transactions are more secure comparatively with any credit card. You do not need to fill all card details like, card number and CVV. It is a combination of two keys; Public Key and Private Key. Anyone can watch the public key information (Your Bitcoin address) but the private key is encrypted, so the online fraud is impossible.
The other advantages which are driving Bitcoin to be more popular are privacy and non-inflation affect. We know that inflation issue does exists with the regular fiat currencies. Which affects the buying power of the peoples. On the other hand Bitcoin is designed in such a way where the numbers of Bitcoin will never grow (21 Million Only). So inflation won’t be a problem at all.
How it works?
Bitcoin transaction begins with an electronic wallet. A Bitcoin Wallet. Let’s take an example. Assume I want to send Bitcoins to my friend. Now this transaction will have three information.
- An input record, which is a record that gives information about the first place transaction, it means from where I got it. I got it from Sam.
- An amount that gives information of the amount how much I have transferred.
- An output that is the information of my friends Bitcoin address.
To send Bitcoin, it is required to have two components. A Bitcoin address and a Private Key. Bitcoin addresses are random generated numbers and the Private Keys are another secret sequences. When I send Bitcoin to my friend, I use private key adjoining with the input of the coins and output (friends account). Now this will be send from my Bitcoin wallet to huge Bitcoin network and then it will be verified by Bitcoin miners and putting it into a transnational block called “Blockchain”. After verifying it, the transaction succeed.
So now we do know the behavior of Bitcoin working. You just need to have a Bitcoin Wallet to start transaction with merchants and users. There are lot of communities offering varieties of wallet supporting different platforms for Web and Mobiles. You can choose your type here.
After getting your type of wallet your second move will be towards getting a Bitcoin. Correctly said, what’s the use of empty wallet? There are ways, you can purchase a Bitcoin, you can earn or you can mine your own. There are some fantastic services which allows you to Purchase, Earn or Mine. So choose your own.
Great news for Fitness freaks, they can earn Bitcoin while sweating. Yeah! that is true FitCoin has introduced a connected app which tracks power of your fitness tracker to generate cryptocurrency. After your workout, your wearable sends the data to the FitCoin app that is analyzed to find out how hard you were pushing yourself.
As I mentioned above that the last transaction verifies by Bitcoin miners. You really need to know about “Mining”. People are sending and receiving bitcoin in a large bitcoin network, so it is really necessary to know that who has paid what to whom. So this is the Miner’s job to keep an eye on the transactions and keeping in a general ledger called block. This general ledger becomes a long list of block which is called BlockChain, and believe me they got paid with Bitcoins as reward.
The miners use hardware to solve cryptographic puzzles. They are rewarded with Bitcoins for their work and they get more Bitcoins the harder the puzzle they solve. The more puzzles solved, the harder the cryptographic hash that creates these puzzles gets.
If you ask, is Bitcoin Legal? Certainly it is, it just depends what you are doing with it. Although having magnetic and innovative properties, the ways are not easy. There are complex legal implications surrounding Bitcoin. Law enforcements are more concern about its decentralized nature. As it can be used anonymously another big concern is Money Laundering.
I would like to tell something more on “Silk Road”. It was not the first incident when Silk Road, an anonymous marketplace came into controversies. Earlier in October 2013, it was closed by FBI. The market place is commonly used to sell items which are illegal in many countries. Another Silk Road Darknet Market has spawned after the demise of Silk Road 2.0. The new site is called Silk Road Reloaded. Although after severe suppression of Silk Road be law and enforcement, another market place is booming fast. This is called AgoraDrugs. These are the market place which is only accepting cryptocash like Bitcoin for purchasing.
Sequentially after several bad news related with Bitcoin, it started loosing the integrity. Resources says that in end of year 2013 and start of year 2014 there was a series of dictum’s and warning for Bitcoin from Bank bodies and regulators globally. They stated to be beware and no support from them. Many of them claim to be worried about the aftermath that large-scale Bitcoin adoption might have on the stability of the financial system, especially if prices are volatile. Yes, you can check the records on exchange. Prices are too volatile.
Eventually there are some interesting facts on Bitcoin. Some of them has collected and depicted with the help of info-graphic. Thanks to PiktoChart!
Friends, I really hope that the information on this emerging virtual currency will attract you and tickles your knowledge nerves to run faster to get more information. I would love to have your valuable comments, suggestions and queries if you have in comment box.