Bitcoin has been in the news for the past few weeks, but many people are still unaware of it. Could Bitcoin be the future of online currency? This is one of the most frequently asked questions about Bitcoin.
How does Bitcoin work?
Bitcoin is a type of electronic currency (cryptocurrency) that is autonomous from traditional banking and was introduced in 2009. According to some of the top online traders, Bitcoin is considered to be the most well-known digital currency that relies on computer networks to perform complex mathematical solutions. Problems verifying and recording the details of each transaction.
Bitcoin exchange rates do not depend on the central bank and there is no single authority that controls the supply of cryptocurrencies. However, the price of Bitcoin depends on the level of trust of its users. The more large companies accept Bitcoin as a payment method, the more successful Bitcoin will become.
Advantages and risks of Bitcoin
One of the advantages of Bitcoin is its low inflation risk. Traditional currencies suffer from inflation and they lose their purchasing power every year as governments continue to use quantitative easing to stimulate the economy.
Bitcoin does not suffer from low inflation, as bitcoin mining is limited to just 21 million units. This means that the pace of issuing new bitcoins is slowing down and the full amount will be mined in the next few decades. Experts predict that the last bitcoin will be mined by 2050.
Bitcoin has a lower risk of collapse than traditional currencies, which depend on the government. When a currency falls, it leads to hyperinflation or instantly wipes out one’s savings.
Bitcoin exchange rate is not regulated by any government and it is a digital currency available worldwide.
Bitcoin is easy to carry. One billion dollars of Bitcoin can be kept in a memory stick and in one’s own pocket. Bitcoin is easier to transport than paper money.
One of the disadvantages of Bitcoin is its undetectable nature, as governments and other agencies cannot find the source of your funds and therefore attract some unscrupulous individuals.
How To Make Money With Bitcoin
Unlike other currencies, there are three ways to make money with Bitcoin, saving, trading and mining. Bitcoin can be traded in the open market, which means you can buy less bitcoin and sell higher.
Bitcoin volatility
The value of Bitcoin has declined in recent weeks as business at Mount Gox has abruptly shut down, making it the largest bitcoin exchange in the world. According to unconfirmed sources, trading was halted due to valuation-related thefts worth over 744,000. The incident has affected investors’ confidence in the virtual currency.
According to the Bitcoin Chart, the Bitcoin exchange rate was over $ 1,100 last December. That’s when more and more people became aware of the digital currency, with Mount Gox happening, and it dropped to about $ 530.
In 2014, we expect the global popularity of Bitcoin to grow for both traders and consumers, with Stephen Pair, co-founder and CTO of BitPay, “and the biggest growth in China, India, Russia and South America.
India has already been mentioned as the next potential popular market where Bitcoin can go. Africa could also benefit greatly from using BTC as a currency-of-exchange in the absence of an efficient central banking system or any other country that relies heavily on mobile payments. The expansion of Bitcoin in 2014 will be driven by Bitcoin ATMs, mobile apps and tools.
World experience bitcoin
More and more people are using Bitcoin, and supporters are hoping that one day, consumers will use digital currency for their online shopping and other electronic deals. Large companies have already accepted payments using virtual currency. Some large companies include Fiverr, TigerDirect and Zynga, among others.
The future of Bitcoin
Bitcoin works, but critics say the digital currency is not ready to be used by the mainstream because of its volatility. They also point to the hacking of bitcoin exchanges in the past which has resulted in losses of millions of dollars.
Proponents of digital currency say there are new exchanges overseen by financial experts and venture capitalists. Experts added that there is still hope for the virtual currency system and the forecast growth is huge.
I hope this article has helped you get a clearer idea of Bitcoin, its potential, what Bitcoin does and how Bitcoin works. For more articles on Bitcoin, weekly trends, information and updates, subscribe to our blog post.