Bitcoin is a digital currency also known as crypto currency that’s exchanged between two parties without any central command. There is no central authority that controls or backs the currency the way fiat money is controlled by the government. Bitcoins (crypto currency) are pieces of computer codes that represent monetary units. There are about 11 million bitcoins and it is expected that this will rise to around 21 million by 2040. Unlike traditional money, bitcoin transactions are irreversible; they can only be reversed by the one receiving the payment.
No Central Control
No one owns bitcoins; it can be used by anyone without any central control. This means no government or bank can come between you and the bitcoin transaction you wish to make. They can be transacted anywhere in the world since it is internet-based. This great freedom also comes with an even greater responsibility; you have no one to complain to in case things go wrong. You cannot let others hold your bitcoins for you or make the mistake of sending it to the wrong account.
You need a bitcoin wallet to hold your funds securely. The most important aspect of this is the entity controlling your private key needed to spend your bitcoins. Using these entities means leaving the security of your funds in their hands. No need to worry so much since most wallets allow users to hold their private keys so no one can access your account unless you permit it. The sad part is that if you lose or forget your private key or the password, no one can help you. If you plan to keep lots of bitcoins, it is recommended that you keep them in several wallets for prudence and safety reasons. Bitcoins (crypto currency) is impossible to counterfeit due to the complicated code used to encrypt each transfer. This ensures total anonymity and safety for all users.
What does bitcoin cost?
Bitcoin is a commodity whose price varies with the demand and supply. Since the supply is limited to 21 million, the increase in demand caused by an increased in the number of users is driving up the price. Its price can still fluctuate significantly since only a small fraction of the world population use it. In 2011, one bitcoin was valued at less than a dollar, but today it is worth more than 650 dollars. To accommodate the ever increasing demand, the value of a bitcoin will continue to rise. According to the market rates, the bitcon market is valued at approximately 7 billion dollars with daily trades of worth millions of dollars.
Trusted exchanges are the best ways to buy bitcoins. With every exchange, there are different prices due to the inefficiencies in the regular banking system. In case the difference in prices is too wide, traders will buy from one end at low prices and sell high, therefore, closing the gap. If one exchange constantly has a substantially different rate from the others, it is worth avoiding as it may be a sign of trouble. Before delving into the market, do some research and work with a trustable exchange.
Where can I use bitcoins?
Today, so many companies accept bitcoins as a form of payment, and the number keeps growing each day. In the earlier years, crypto currency was notoriously used to pay for illegal goods and services. Today, thousands of e-commerce businesses accept bitcoins. These include WordPress, Etsy vendors, Amazon, Overstock and traditional brick and mortar business, including Sears, Kmart, CVS, and Home Depot.
Is bitcoin completely anonymous?
It has been widely believed that transacting with bitcoins offer complete anonymity, however, since it records the transaction details in the ledge called blockchain, it is possible for someone to trace the transaction back to you. Some companies will offer bitcoin mixers that increase the privacy level, but it is not completely anonymous. If you want to avoid trouble with the laws of your country, you may need to follow the tax regulations, but the power rest with you whenever you want to take the risk. The newer wallets use a new bitcoin address for every transaction that sends funds in.
These transactions are super fast and can be sent globally, unlike bank transactions that are subject to lots of regulations. Bitcoin is getting better as the technology gets refined over time. There is no fear of a major bug affecting the system in the near future.