Right from its beginning in the finance world, Bitcoin has been a hot topic of everyone’s discussion and curiosity. It has brought revolutionary changes in the world of currency, and prominent economists have acknowledged it well enough.
Bitcoin is a digital currency designed to work as a medium of exchange that uses cryptography to control its creation and management, rather than rely on central authorities. Bitcoins can be used to buy or sell products, but not many shops accept it yet. Nobody owns the Bitcoin network; it is controlled by its users all around the world.
Cryptography is an art to write or solve a code, so both encryption and decryption are part of Cryptography; here, it is repurposed to prove ownership.
How can you pay in different ways?
Holly and Jan are two bitcoin users. In a transaction, Holly sends 10 Bitcoins to Jan, resulting in a deduction of 10 Bitcoins from Holly’s wallet and the addition of that in Jan’s wallet; regarding this, a message is sent to the Bitcoin network about the details of the transaction, but in between anyone can take advantage by sending a similar message to the Bitcoin network and try to steal the Bitcoins of Holly, in this, case Cryptography comes in use.
Each message sent by the user contains a special message or signature used as a complex math problem. This message has the same significance as that of a handwritten signature. Each Bitcoin account user has a private key that is used to generate these signatures.
How to get Bitcoin?
We can buy Bitcoin by purchasing real money. We can sell goods and items in exchange for Bitcoins. It can be generated using a powerful computer, which is called Bitcoin mining.
Bitcoin mining
The rewards earned in helping the completion of transactions is called mining. It can be done using very powerful GPUs (Graphics Processing Unit) and ASICs (Application Specific Integrated Circuits). The miners are rewarded in bitcoins, which increases the presence of Bitcoin over the internet.
Advantages
Money can be sent and received from anywhere at any given time with a cryptocurrency software. We are in control of our own money. There is no central authority. All finalized transactions are available for everyone to see, but personal information is hidden.
Disadvantages
It has volatility mainly due to limited coins, and demand increases as the day pass. Many people are still unaware of digital currency. Bitcoin has features that are still under process. Initially, the mining took place by people interested in cryptography and solving computational problems or collecting them merely as a hobby. At the time, they had less or no value. With more and more people buying and selling them also gathered to their increase in value. The current value of one coin sits at $15293.10.
Bitcoin’s future is highly uncertain as the countries fear losing control over money and the generation of taxes. Still, few countries like Japan, China, and Australia have accepted it.