Unlessyou live under a rock or on a remote island with no social media you must haveheard the word Bitcoin.
In the last couple of years, there have been tonnes ofgood and bad press on bit??ins. Butwhat exactly are bitcoins? Are they the glorious future of online currency orjust a passing fad that will collapse faster than you can say Cryptocurrency? What Are Bitcoins? Thebit??in is a cr??t?curr?n?? or digital asset that came into circulation in2009. It is ?ut?n?m?u? of tr?diti?n?l banking and uses cryptography to secure, verifyand r???rd the d?t?il? of ???h tr?n???ti?n made. Cryptocurrenciesare monitored by a peer-to-peer Internet protocol and are 100% free ofgovernment oversight.
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Bitcoin,to date, remains the best-known virtual currency. It requires specializedencryption techniques to create and transact. Hence the name cryptocurrency.
Alltransactions are added to a ledger in the public domain called a blockchain. Theprocess of users and num?r?u? bu?in????? running a program to solve m?th?m?ti??lproblems in ?x?h?ng? f?r th? virtu?l ?urr?n?? is called mining.Asof 3rd November 2014, 13.36 million bitcoins, 64% of the totalsupply had been mined. By 13th January 2018, a whooping 16.8 millionbitcoins (BTC), which represent 80 percent of the entire bitcoin supply, weremined.
Bitcoin Vs. Traditional CurrencyBitcoinhas a 21million supply cap built into its protocol by creator Satoshi Nakamoto.This was designed to create scarcity of the digital asset.
The more bitcoins mined,the higher the scarcity and in turn demand and value. Ex??rt? predictthat the l??t Bit??in will be mined by 2050. After this, it will become evenharder to obtain them, which potentially makes every coin even more valuable.Inflationhas been the bane of existence for tr?diti?n?l ?urr?n?i??, as every year theytend to lose their purchasing power. Thisis highly unlikely in the case of bitcoins.
Bit??insare touted as having a lower risk of ??ll???? when compared to conventional?urr?n?ies dependent on central regulatory units. However,they are not entirely risk free as observed on December 22, 2017 when the Bitcoin dipped as lowas $12,855 from highs of over $20,000 onsome exchanges. A 30% percent tumblethat shook the cryptocurrency markets.Januaryhas also proven to be a tough month for the currency with value dipping up to$10,000 at its worst. This is largely attributed to the Chinese New year wherepeople exchange their cryptocurrencies for fiat currency to enable them topurchase gifts and vacations for the holidays.
Bitcoin Value Adds overTraditional Money Return on InvestmentFor early adopters, bitcoin is a high-risk, high-returninvestment. MobilityBit??insare extremely mobile. All you need is a virtual wallet and a smart phone ormemory stick in your pocket. Try carrying around a billion dollars like that. Fast TransactionsBitcoininitially promised to deliver fast peer-to-peer transactions at a fraction ofstandard fees. But with its growingpopularity and dive into the mainstream, the cryptocurrency is grappling withslow transfers. However, it is a lot faster than most traditional paymentsystems.
Zero/ Low F???Unlik?bank transfers and ?r?dit ??rd payments, there are usually no transaction feesfor bitcoin currency exchanges because miners are compensated by the network. FraudFreeThe risk of fraud and identitytheft when making online or credit card payments is very high. Merchants havefull access to your credit line and a whole lot of personal information.Bitcoins uses a “push” mechanism, which allows the user to send exactly whatthey want to the merchant or recipient with no further information. Helloanonymous irreversible transactions! AccessibilityAll you need is access to the Internet and asmart phone and you are well on your way to cryptocurrency nirvana. There are3.9 billion individuals with access to the Internet or mobile phones.
Witheducation and awareness all these are primed for the bitcoin and digitalcurrency market. These numbers are growing by the minute.DecentralizationBitcoin is managed entirely by its network,and not any one central authority. The network operates on a user-to-user (orpeer-to-peer) basis. This decentralization pits crypto over fiat currency anyday.
UniversalityBitcoins are not regulated by exchangerates, interest rates, transactions charges or other charges of any countrymaking them a borderless and universal currency. Most electronic cash systems like PayPal orKenya’s Mpesa are in one way or the owned or regulated by someone else. This”owner” has the power to make decisions about your money without consultingyou.With bitcoins, you are the sole custodian of theprivate key and the corresponding public key that makes up your cryptocurrencyaddress. No one can steal that away from you.
BecomeA Bitcoin Billionaire Bitcoin is a great option for making someextra cash or diversifying your wealth portfolio.Investingin BitcoinTop investors like Mark Cuban and Jim Crameradvise that one should only invest in bitcoin if you’re prepared to lose yourmoney. However, for a lot of the early adopters, they are laughing all the wayto the bank. The value of the bitcoin has skyrocket and keeps growing since dayone. As with all investments, rigorous research,an appetite for risk and a healthy dose of optimism is required.Some other indirect ways include BitcoinMiningBitcoin miners create the public ledger,which allows the whole system to run like clockwork. For every new blockcreated, the miners are paid in bitcoin, which grows the community.
A bitcoinmining calculator is a nifty tool for checking the profitability of miningeveryday. BitcoinFaucetA bitcoin faucet is a website that allows oneto give away minimal amounts of Bitcoins to users. The faucet owner makes moneyby billing for ads placed on the site.TheFuture of BitcoinOneof the challenges that bitcoin faces is that one’s digital fortune could be gonein a poof of a computer crash or that a hacker may penetrate your secure virtualvault. Advances in tech will help resolve this. The anonymity ofcryptocurrency transactions has created a whole world order of moneylaundering, drug peddling, smuggling and weapons procurement.
This will ultimately resultin more scrutiny from governments and regulatory agencies, which could crumblethe very premise on which these currencies were created.Finally, there is a substantialnumber of merchants who accept bitcoin payments, they are still in theminority. For bitcoins to become more commonplace, they have to first gainwidespread acceptance among consumers. Their relative complexity incomparison to conventional currencies is a deterrent for most except the verytech savvyOverall, Bitcoin has a long way to go before itcan take the place of credit cards, dollars and euros as a tool for globalcommerce, but its future sure shines bright