Bitcoin is the first Cryptocurrency that works on encrypted transactions. The monetary policy of Bitcoins cannot be altered anyway. No central body like a bank is involved in the operation of Bitcoins. They use technology that works by a peer-to-peer method. There is a separate network of Bitcoins that manages the entire transaction process. Bitcoins run through an open-source network that is not owned by anybody, and it is completely based on Blockchain technology.
Bitcoins came up with a completely new system of payment that was not provided by any bank or financial institution. There are NO or Low Processing fees. In many stores and eating joints, you can use your bitcoin wallet to pay. In the future, the acceptance of Bitcoins is likely to increase. However, it cannot be said with certainty.
The transaction process is very fast. The network of Bitcoins involves a huge number of stakeholders and participants. Bitcoin software protocol which possesses a ticker symbol of BTC is followed by the Bitcoin network. Bitcoins are available in limited numbers and double transaction on the same coin is strictly prohibited. All transactions of cryptocurrencies are recorded in a public ledger that is available for all.
How Was Bitcoin Cryptocurrency Launched?
Satoshi Nakamoto, a software developer proposed Bitcoins for the first time based on mathematical proof. In January 2009 Bitcoin was launched anonymously to a subgroup of technological experts. Today, many stores have become bitcoin and crypto friendly. Presently tens of billions of dollars are the daily worth of Bitcoins. The way the Bitcoin network is regulated is dependent on the region where it is used. Regulation of Bitcoins considers it to be a commodity or currency. Though there are restrictions for Bitcoins in a different economy, Bitcoins can be used worldwide. El Salvador was the first country that accepted Bitcoin as legal currency in 2021(June).
What Purposes Do Bitcoins Serve?
Basically, Bitcoins are used to perform value transactions in a way that is different from the traditional financial methods. Legacy settlement modes of payments like ACH and SWIFT have much higher fees of the transaction, whereas Bitcoins perform the same at much lower fees. Moreover, Bitcoins provide the user with a much more secure and fast transaction system.
With increasing competition, scaling issues came up which made Bitcoins less efficient in small amounts of transactions. It is often regarded as ‘digital gold’ as it is gold’s alternative in the electronic transaction world. But as an investor, you should not consider Bitcoin as virtual gold because it is a digital currency only. The investment thesis states that Bitcoins replaced gold in the global economy. There is another theory that states that you can use it with full freedom as it provides opt-in-basis. It states that by using Bitcoins, your transaction would be protected from devaluation, monetary confiscation, and censorship.
8 basic characteristics of the Bitcoin Cryptocurrency
- Resistant to censorships
- Bitcoin transactions are public i.e., they are recorded, and anybody can see that.
- Peer-to-peer- No third party is required as a middleman.
- Transparent- Bitcoins follow rules of the protocols transparently.
- Distributed- At present there are around 80000 nodes that are globally distributed because of which there would be no downtime problem and no information would be lost.
- Decentralized- There is no CEO to control the network of Bitcoins. Only consists of open-source software clients who are willing.
- Pseudo-anonymous- Bitcoin transactions are only tied to addresses, no information regarding identity is provided.
- No consent needed- For using Bitcoins, you need not take consent from any authority. If your transaction follows the Bitcoin protocols, it would be approved. It is 100% decentralized.
What Is The Value Of 1 Bitcoin In Today’s Market?
Roughly one Bitcoin has a value of $1200. Many investors are of the view that by the year 2030 the value of one Bitcoin would reach $500000. Back in 2009, the value for 5000 Bitcoins was only $27. People can use crypto exchanges and apps to buy and sell bitcoin. You can try the app like this trading platform for the same.
So, you might consider choosing Bitcoin Cryptocurrency over the conventional transaction methods looking at the level of security, freedom, and transparency it provides.