The cryptocurrency Bitcoin has received an enormous amount of press coverage, and it’s easy to understand why – the digital currency has gotten astronomically valuable in just five years, going from pennies on the dollar to thousands of dollars per coin as of this writing.
Unfortunately, much of the news surrounding Bitcoin has been negative, including its use by criminals to launder money and by drug smugglers in the notorious Silk Road marketplace.
So just what are Bitcoins, and Is Bitcoin the future of finance? Read on to find out.
What is it?
Easy to use, digital and anonymous. Unlike credit cards or PayPal, you can send and receive bitcoins from anywhere in the world at any time. The transactions are cheap, too – often less than a dollar (or 0.01 BTC).
Bitcoins have value because they are backed by powerful cryptography and a decentralized network instead of banks and governments. They aren’t attached to any physical form.
They can be stored on your computer, online accounts, or printed out if you want physical coins. And it’s completely open-source – anyone can take part in improving it.
Because of these reasons, many people believe bitcoin is here to stay and will soon become one of our primary methods for transacting money across borders. It’s certainly an exciting technology worth keeping an eye on.
Where can I buy bitcoin? Well, you can buy it from many popular crypto marketplace like Coinbase, eToro etc.
Benefits
Digital currencies offer many benefits over traditional forms of money. The most obvious is that they allow for quicker transfers and exchanges.
International payments, for example, can be made almost instantly-and for a lower cost than fees charged by banks or third-party money transfer services like Western Union.
Digital currencies also allow users to remain anonymous, which some see as beneficial in allowing people to make financial transactions without interference from government or banks (although it’s worth noting that governments are becoming increasingly aware of digital currency use).
And unlike credit cards, if your digital wallet gets hacked, you won’t be liable for fraudulent charges.
There are also potential risks associated with virtual currency, including volatility in pricing and hacking attacks on cryptocurrency exchanges (although fraud occurs with any form of currency).
Why does it have value?
The supply of bitcoins is regulated by mathematics. New bitcoins are created by a competitive and decentralized process called mining.
This process involves the network rewards individuals for their services. Bitcoin is secure money because it’s based on cryptography.
Individuals may sell their bitcoins to someone else who wants in. Nobody can tell you to send them back, and nobody can counterfeit your bitcoin wallet.
You’d have to do that yourself if you wanted to scam people out of their hard-earned coins.
Future potential
The cryptocurrency world is full of hidden gems that have massive potential. Anybody who invested in bitcoin before its price started to increase dramatically has made a significant amount of money.
Ethereum, litecoin, and dash are other digital currencies worth investing in, as they’re currently cheaper than bitcoins. As they say on Wall Street, past performance is no guarantee of future results.
However, it’s certainly worthwhile doing your research before investing any money into cryptocurrency.
