Bitcoin is the digital money which can be used for online transactions. It is one of the popular crypto-currencies of the world. However, bitcoins are not physical currencies which can be obtained in banks or ATM. Their existence is limited to online and they are not backed by government or banks. This electronic cash system was first originated in the year of 2009. Just like normal currency a wallet holder is eligible to own millions of bitcoins. People exchanging bitcoins are dependent on computer software to verify and validate the transactions.
Who controls them?
The blockchain is the financial system responsible for validation of bitcoins. It relies on the decentralized computer systems connected by internet. Just like P2P networks, blockchain is dependent on the growing online community. Bitcoin transactions are not controlled or backed by any treasury or bank.
How do bitcoins grow?
Since there is no treasury control to print new currency, bitcoins grow in number by solving the blocks of mathematical equations which are created on every bitcoin transaction. To solve the equation a huge amount of computing power is required. This process is called mining farm. Russia and China have the largest mining farms.
Where to buy bitcoins?
Bitcoins can be bought from exchange operators like Coinbase that are involved in the crypto-currency transactions. The symbols used for trading bitcoins are XBT and BTC. Different crypto-currencies uses different spot price index to determine the value. The month of December 2017 noticed the highest rate for bitcoin which is equivalent to 18000$.
Is it a safe investment or not?
With such huge rates for bitcoins, a number of people have started taking interest in this crypto-currency. But investing in bitcoin would be like investing in complicated algorithms and the network which hands it. Due to the volatile nature of crypto currency, investing in Bitcoin might seem like a gamble. What appeals the investors to buy bitcoins is their scarcity and usefulness. Bitcoins monetary policy can be verified by anyone and every bitcoin which is transacted can be traced.
Transfer of bitcoins is not regulated unlike banks and they can be sent to anyone across the world without middleman fees. Since bitcoin is not related to any country’s state of the economy, it is a global currency and its prices can be analyzed with some crypto-currency apps. Everything valuable on earth is prone to robbery. Bitcoins also need to be safeguarded against hackers and scammers. Safeguard your bitcoins in bitcoin wallets which are designed with security. There are few risks involved in cryptocurrency investment. The chance of hard fork split is possible. It means differences between stakeholders can result in splitting the current network and forming a new one.
Bitcoin like any other cryptocurrency is in its early stage of technology. There is a certain ambiguity in investment as buyers do not know how the new currency handles benefits and losses. There is also a chance that the new currency will replace the existing currency or it can become outdated.