What is Bitcoin?
How it all began
A vision put out into the world by Satoshi Nakamoto in 2008 paved the path to what we now call crypto currency. Just how digitization took over the world digital currency too is making its mark. Only a decade ago the value of bitcoin was 0 and today it’s estimated around 15 lakhs. What is bitcoin? Why is it so infamous? All your questions will be answered further.
All you need to know about bitcoins and how it works.
Bitcoins saw an all-time hike this year attracting millions. Many people find it risky as most of us don’t have enough information. Just like the title promised I’ll simplify it and provide you with all the details you might require to understand or even invest in it. For the longest time finance has been based on trust and is issued by central banks or governments but with crypto currencies there is no third party. This can be viewed as a benefit or a drawback. The Indian rupee holds value because it’s issued by the RBI without that it’s just a piece of paper. We have been investing since the very beginning but with banks and with this we give them complete authority over our money. And if we invest in bitcoins or any other crypto-currency we are in control.
How is Bitcoin generated?
Now this is a very difficult and technical process. But again I shall make it simple for you. All the bitcoin transfers have one public account called ledger and this is made available to everyone who is on the bitcoin network. All these systems are run by miners and their job is to verify all these transactions. This is done to ensure that the coin going from one party to the next actually exists. Each transaction has a unique variable which these miners find by solving complex mathematical equations. Like I said a very complex task but what an investor sees is that once the equation is solved the transaction is added as a block to the block-chain. For doing this the miner is rewarded with bitcoins and this is called Proof of Work just like we receive salaries for our jobs.
Some use bitcoins as digital currency and but mostly people see it as an investment. Just the way people buy gold and wait for the value to rise crypto investors do the same, that’s why it’s also called digital gold.
Investing in bitcoins- PROS AND CONS
To invest or not to invest is the biggest question now. Once we know all the benefits and risks involved we can make this decision. Now we must keep in mind there is no investment with immediate high returns.
Since the transactions can’t be tracked easily, it has been used for illegal activities on the dark web. Another risk is that it’s not a physical asset like property making it a niche product. Many banks and businesses are against it because if more people use bitcoins they are at loss. Even RBI was against it back in 2018. The Supreme Court allowed trade in crypto- currency and gradually many people are becoming more open-minded and venturing into it. The IRS now classifies digital currency as property and it would be taxed. Also with time it has become easier and safer with options like signing up, I.D verification and KYC authentication.
We have apps like WazirX and Coin switch Kuber where you can trade in bitcoins and various other forms of crypto. I have personally used these apps and found it to be absolutely safe and simple with instant withdrawal options. It’s as easy as online shopping. While many businesses and industries were shut down during the pandemic the value of bitcoins rose to 120%. The world of crypto-currencies is volatile so one can expect both profit and loss. Where some look at it as a gamble others see an opportunity, and if you fall in the second group, we have made it even easier for you guys. Given below is a direct link to WazirX where you can open an account by following a few simple steps and start buying and trading in bitcoins and other crypto-currencies.