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  • Richard Elliotby Richard Elliot
  • 2 years ago

How Bitcoins Work

Bitcoin is a digital currency invented in 2009 by anonymous figure(s) going by Satoshi Nakamoto (S.,L. , 2015). It is transacted without any centralize regulatory system in place. When transacted bitcoins are kept into bitcoin wallets where history of each transaction can be traced. It is optional to pay for transaction fee, although, most transaction fees are charged depending on the size of a wallet. Bitcoin has been labelled by some as the future of investment due to its appreciating market value thereby luring to a number of people investing in bitcoins. To this regard some business such as Microsoft and PayPal have started accepting bitcoin as payment. (Williams,S.,2017) check more from https://friendlycrypto.com/

Reasons to Invest in Bitcoins

Investing in bitcoins is one of the most ideal business practices as one is assured of profits. Due to the small number of bitcoins are mined per day, this makes the coins scarce in the market thereby its value rising at a fast rate. This can be equated to the way gold trades, in that, its availability commands the market price. Bitcoins are also easily accessible because all the money is stored electronically and internet access is all that is essentially needed for quick access. Anyone can invest in bitcoins as it doesn’t have any conditions to be met (Dean Investment, 2015) It is open to everybody with the will and readiness to venture into cryptocurrency investment. Bitcoins are also cheap to trade in as one will can be able to send and receive money anywhere in the world cheaply.

Acquisition of Bitcoins

In the process of acquiring bitcoins one should first gain extensive knowledge about bitcoins and the plunge into having a bitcoin wallet and then visit a bitcoin exchange market place such as Mt. Gox to buy. New buyers are advised to visit simple market places which they can easily understand and access. New buyers are advised to use accounts such as Copay which can also be accessed via a smartphone. One can also acquire bitcoins through mining. This is where one enters into some sort of a lottery and use a bitcoin mining hardware to mine faster and see whether they can win, with the bitcoin mining network selecting the winner. A winner is always selected randomly making the mining of bitcoin more of a gamble. Possibly the reason why not many people participate in it.

Bitcoin Wallets

A wallet is an electronic card where investors’ information is stored. They have coded that signify the personal details of an investor. It is this wallet that one uses for transaction, be it buying or selling of coins or buying goods from a store. The wallet can also be used to mine. There are many types of wallets and depending on the size of an investor’s wallet and the activities used to by the wallet, say transactions and mining. Bitcoins can exist in an owner’s smartphone or on cloud storage. This is protected by the user being given a password which will be used every time they access their accounts.

 

Personal Information

Bitcoins do not reveal the identity of a person and everybody is free to trade in bitcoins. It has its rules and guidelines to be adhered to but does not have a specific rule that locks out any potential investor. This has partly resulted to the criticism from experts and regulator who argue that bitcoins are a hub of money laundering as dirty money can easily find its way into the business. This is because no regulation rules have been put in place to oversee the operations of the trade. To some, this is welcoming as they do not wish to share their financial details to the made public. Since they choose to operate as private investors, then bitcoin seems to favor them

Uncertainty about the Future of Bitcoins

Most public financial watchers have questioned the sustainability of bitcoins and if indeed it will pass the test of time. Some have questioned its vulnerability due to the fact that it lacks a central bank such as the Federal Bank that regulates its operations. This, they argue that, could lead to a situation whereby money gets lost at the expense of the investors. For example, in September 2017, the CEO of JPMorgan bank said that bitcoin is a fraud which will eventually blow up. He termed the bitcoin business as a crazy investment just like the Tulip bulbs, saying it won’t end well(Beigel,O., 2017 Most people advocate for a central body to govern and regulate the operations of bitcoins so as to stop any criminal activity from taking place and also to try and control the crazy rising of value in bitcoins.

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Conclusion

It is without doubt that bitcoins are one of the most lucrative business to deal in right now. This is because of its high price value and the fact that it gains value each day. Bitcoins are also easy to use and are not prone to inflation such as normal currencies. A good example is Cyprus which underwent a serious inflation to its currency. Bitcoin can also be used to purchase products besides being simple to use. This has reduced the cumbersomeness of walking around with cash, instead now money is carried electronically with internet access being the only point of access. For one who wants to venture into the bitcoin investment, the person has first to do some research and get to understand, at least, the basics of operation and how to by. There are several platforms (market places) where a user can buy bitcoins and there is also the bitcoin mining hardware which selects a winner after a carrying out some complex mathematical calculations. Bitcoins can be stored in an electronic wallet that has the personal information of the user. The user has a password which is used to access the account details in the wallet. Despite this the, the bitcoin industry has been criticized majorly due to the fact that it lacks a regulatory body which will scrutinize its system.

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