A Beginners Manual to Understand Bitcoin

Technology has influenced every single aspect of our life. It’s also changing the way we transact or run our financial ecosystem. Cryptocurrency, blockchain, and bitcoin have entered the common man’s lexicon. There aren’t many people who haven’t heard these words before. For a long time, the central banks and government were in charge of the financial system. However, technology made a big change. know more about the bitcoin code app by clicking here on our Home-Page

As we have come to acquire virtual identity in social media platforms like Twitter, Instagram, and LinkedIn, our medium of exchange, i.e. currency, is also going digital. Crypto, which is short for “cryptocurrency,” is a form of money that doesn’t exist in the real world. They are run through blockchain technology operating on the peer-to-peer network. 

The earliest cryptocurrency to be introduced in the market was bitcoin. 2009 was the year that saw its inception, and the person who did so introduced themselves to the world as Satoshi Nakamoto. He claimed that he wanted to make financial transactions free from the centralized control of central banks and governments. 

What is bitcoin?

To put it another way, bitcoin is just one of the many cryptocurrencies that are available in the modern world. They are the digital format of currency. Since they are digital, there is no expense for printing, distributing, or regulating them. They can be transferred from any corner of the world to anyone anywhere. 

It also lends anonymity to the users. The users need not use their names, identity documents, or any other markers which can establish who they are. Instead of using traditional methods to link buyers and sellers of bitcoin, encryption keys are employed. It’s decentralized, which means it’s not centrally authorized or issued. Bitcoins are “mined” with the help of complex mathematical calculations done by powerful computers. 

What is mining?

Bitcoin mining is a process of creating new bitcoins. Mining involves solving complex mathematical problems in powerful computers leading to the verification of transactions. A predetermined amount of bitcoin is received by the miner once the mining is carried on successfully. With the demand for cryptocurrencies skyrocketing, the activity of mining bitcoins has also increased. The only downside is that not everyone can do such complicated calculations to mine bitcoin. 

How is the value of bitcoin determined?

Unlike currency, which has a fixed intrinsic value attached to it determined by the issuing authority, bitcoin doesn’t abide by the rule. The value of bitcoin depends upon speculation. Simply put, bitcoin’s value is determined by the people’s will to pay for it. It can be said to work in a similar mechanism to how a stock is priced. The speculation can lead to volatility. 

The inventor of bitcoin, Satoshi, claimed that only 21 million bitcoins could be altogether mined; thus, the supply of bitcoin is limited. 


Why invest in bitcoin?

Bitcoin has set a revolution in place. The economic woes that have grappled the world after COVID-19, like inflation, volatility, and job loss, have drawn people to cryptocurrency like bitcoin as a source of investment.

Bitcoin can be a good option which anyone who has the appetite for investment.

  •  Liquidity: the high liquidity of bitcoins garners popularity. They can be easily traded for both cash and assets like gold. Several trading platforms, software, and brokers have made transacting in bitcoins easy.
  • Hedging inflation risks: unlike government-regulated currencies, bitcoins are decentralized. Government or central banks can’t influence their value, so it’s immune to severe inflation risks that the world is currently witnessing. 
  • Adaption towards new technology: technology has the power to change every facet of our life. The change in financial ecosystem is also seeing a change with the ushering of cryptocurrencies like bitcoins. It’s yet to introduce many new technological innovations, opening opportunities for everyone. 
  • Hassle-free: other investment mediums are sometimes over-regulated, making investment and trading a tedious job. Bitcoin does not have those hassles on the other side. Anybody can trade in bitcoins, and transactions are settled instantly.

But due to prevailing misconceptions, and sometimes due to the complexity of handling this new asset, many people keep out of this system. But several platforms and applications are making it easier to adapt to the changes like this auto trading bot.

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