A Review of Bitcoin
Ever since the evolution of mankind began, humans have developed various mediums for making transactions in order to conduct business and satisfy consumer needs. From barter system to coins and modern currency and now digital currencies like Bitcoin, the changing nature of transaction medium demonstrates the ever improving and improvising nature of mankind. These currencies are also referred to as crypto currencies. This article facilitates its readers with a Bitcoin review.
What is Bitcoin?
Bitcoin is a modernized version of currency which is a digital currency first introduced in 2009. It operates on the principles laid out by Satoshi Nakamoto, whose true identity has not been verified even yet. It was developed to facilitate online payments and transactions and offered lower transaction fees than the traditional paper money. Bitcoin can be a little controversial to people because of its intangible nature. As BTC do not exist physically but only on the computer itself, getting a grasp of the concepts involving Btc can be confusing to some people. To clarify these confusions, a bitcoin review is presented. They may not consider it to be a currency even but nevertheless, it has huge popularity among most of the individuals reminding us of the modern age that we are living in. As per the official Bitcoin Foundation, when referring to “Bitcoin” as a concept or entity, the word is capitalized while it is written in lower case letters when talking about the quantity of btc (e.g. “I bought 10 Bitcoins”).
First decentralized currency
Bitcoin is the first currency of its nature which is not centralized meaning that it is not backed by any Government or Authority of the world. Instead, the Btc miners may be thought of an authority that backs btc and implement the credibility of it. This cryptocurrency uses peer-to-peer technology in order to aid instant online payments with minimum fee. A peer-to-peer or P2P is sharing of information or asset without the involvement of a regulatory authority just like Bitcoin.
Facts and Figures
Bitcoin was created in 2009 and it has risen in value since then. In fact, from 2015 to 2017, it raised in value by an astonishing 1289% as more and more individuals are taking interest in Btc and its demand has sky rocketed. By September of 2017, almost 16.5 million Bitcoins are circulation where the maximum number of it which can be issued is 21 million. Also, the market capitalization or market value of all the Btc in August 2017 was 75.8 billion out of which 64% of this coins are never used and might never be used. Refunding of Btc transactions is not possible due to the nature of currency. In 2016, a Bitcoin sent $137000 instead of $5 accidentally with no way of getting it back. Also, the 21 million BTC limit is expected to expire in 2140. From 1st April 2017, BTC is a legal mean of payment in Japan. There are some countries where Bitcoin is illegal. These countries include Saudi Arabia, Bolivia, Kyrgyzstan, Ecuador, and Bangladesh.
Sites to buy the Bitcoin
According to reviews taken from exchanges and BTC brokers the following are the best sites to buy your coins, click on name of exchange to see review:
Bitcoin mining is a process through which new coins are created and released into the pool of coins. Basically, this process is performed on computers which use processors to solve mathematical puzzles and discover a block. This block is then added to block chain to create new btc. This process is performed by people using their computers and specialized hardware to solve these problems and they receive rewards in the form of btc for mining. Mining is a way of income used by many individuals and they receive cryptocurrencies through mining. The reward for a single was 50 new btc in 2009 which decreases every four years. Also, the difficulty of the calculations and mining process increases significantly as more and more Bitcoins are created. The difficulty of mining Btc was at 1.0 at the start of 2009 which rose to 1.18 at the end of the year. In April of 2017, the difficulty level was over 4.24 billion. These results in more and more powerful computers required with less and less rewards for mining the btc. By the end of August 2017, there was 1402 ATMs in more than 55 countries worldwide with only North America having the 75% of the World’s Bitcoin ATMs. The first university to accept btc as tuition fee was the University of Nicosia in Cyprus.
How Bitcoin works?
Bitcoin is one of a kind currency system which uses peer-to-peer network technology for quick payments and less fees. Without a regulatory authority, these transactions and their authenticity have to be proved in order to make it secure and less fraudulent. For this purpose, Btc uses a different method. The miners, who are continuously earning money by mining the BTC and receiving transaction fee, use a ledger recording system to ensure the security and validity of these transactions. Whenever a transaction is made, these miners record the transaction and every single transaction is recorded by every single miner. Of course, it is a computerized process but this is a great system developed by community to ensure the safety of transactions and keep track of the Bitcoins.
One btc is divisible to three decimal places and it is called a milli Bitcoin. Also, one btc is divisible by eight decimal places which is a 100th million of Bitcoin. This unit of btc is called Satoshi. It seems due to decrease in the total btc and increasing demand for the currency, one token could be divided to more decimal places eventually.
Transaction in Bitcoin
If you want to buy btc and carry out transactions, it requires a simple process. First of all, you have to create an E-wallet where you Bitcoins will be stored for future use. Reviewing Bitcoin should also be a basic requirement for anyone interested in Bitcoin transactions. There are many websites which offer E-wallets such as epayments.com. Once you have opened your E-wallet, you can transfer money from your bank account to E-wallet so that you can buy btc with it. To buy the it, you have to visit a cryptocurrency exchange where you will be able to buy from any seller who is willing to sell it. As there are limited number of Bitcoins, there must a buyer and a seller to complete the transaction. Once received your tokens, you can make online payments or even hold them for investing purposes. One thing to keep in mind is that you should never forget you E-wallet username and password. As the currency exists only in your E-wallet, you may lose all of your money if you forget your password and there is no way of getting it back.
Investing in Bitcoin
With the increasing demand and trend of Bitcoins usage, many individuals who have an interest in financial markets and investing, have identified this potential opportunity of trading and investing in. A comprehensive review for Bitcoin is crucial before making up the mind to invest. The value of Btc has rose significantly in the past year or so attracting a lot of attention from all around the world. Potential investors buy when they anticipate that the value of Bitcoin will rise in future or sell them when they think that btc value will diminish in the near future.
A cryptocurrency exchange is a place where buyers and sellers of cryptocurrency interact and make their transactions. There are not physical exchanges instead these are online trading platforms where registered users trade in cryptocurrency and keep track of the transactions. These cryptocurrency exchanges are divided into subcategories depending on different factors such as facilitation of new traders, the type of service which they offer and the exchange rates which these exchanges offer.
There are two most popular types of cryptocurrency exchanges:
Regular or Standard exchange
Regular or Standard exchange
These are the traditional and the key forex market which follows the procedure of the elemental market to operate. This procedure is similar to any other forex market in which traders sell their assets for the normal money or for crypto currency.
Benefit of regular or standard exchange
- Regular exchange shows their Forex rate which represents quotes of the current market. The exchange may rise or fall according to market demand and offers.
- The quote currency, base currency or cryptocurrency used is either the dollar or the euro.
- the standard exchange can use either of the major world currencies for the transactions
- Their number is growing and they can easily be found in some major world cities, on the internet search and also financial markets.
As the name suggests, peer-to-peer exchanges are free platforms where buyers and sellers interact with each other directly without any medium between them. They can carry out their transactions directly with each other and the major characteristics of this type of exchange include:
- Traders post their intended price for a specific asset publicly
- Direct negotiation between buyers and sellers is allowed which transfers the transaction to the exchange rate to quicken the deal.
- Sellers have the advantage to set their own price and can ask for any price and can transact in any world currency.
- The direct trading does not have a market price that is fixed
Cryptocurrency brokers work as the traditional brokers i.e. they facilitate transactions between cryptocurrency buyers and sellers and charge some fee for the service they are providing. Finding a good and reputable broker is an essential element when it comes to trading and transacting in crypto currencies. The benefits of cryptocurrency brokers include:
- Anybody can use the top brokers for trade.
- The top broker forex trading volume is quite minimal.
- The broker sets the rate which forces buyers to buy at the broker’s price.
Cryptocurrency funds are pools of currencies which are managed by professionals to ensure profitability and growth. These funds can be purchased by individuals who want to trade in crypto currencies but lack experience and do not want to take risk of losing money in crypto currencies. There are two widely used cryptocurrency funds and they are:
- Crypto currencies Public Traded Funds
A trader can participate in the fund or buy a share and can decide to sell it for some revenue or withhold it for some timer
- Crypto currencies Private and Hold Funds
These are normally available through invitations or being offered privately by a cryptocurrency broker who is at top level. The amount to be invested here is usually above 100,000 Usd and the participation is quite limited.
The exchanges which facilitate their participants to buy or sell Bitcoins are Bitcoins exchanges and due to the ever increasing demand of Bitcoins and the huge growth it experienced in the past couple of years, finding a good Bitcoin exchange to transact in Bitcoin may be a little tricky. With cutthroat competition among the number of exchanges, finding an exchange which ensures fastest Bitcoin transfer to E-wallets alongside lowest exchange rates can be a tiring and time consuming process which is why a proper Bitcoin review should be carried before buying and selling of Bitcoin. But you have to put necessary time and effort to find the perfect exchange if you are serious about buying and selling Bitcoin.
Is a currency trading platform that is very powerful and is used to deposit, withdraw and trade cryptocurrencies, Bitcoin and over 400 different crypto currencies. Located in new Zealand the platform lets a trader to sell anything to anyone in anyplace of the world and in return they are paid in crypto currencies.
Risks related to Bitcoin
Although Bitcoin was designed to make online payments, and not trading or investment purposes, the appreciation in the btc value attracted a huge amount of potential investors who saw this as an investment opportunity. But the digital nature of btc and the absence of regulatory authority carry different risks to it. To minimize the risks associated with transactions, one should consider paying attention to Bitcoin review.
The Bitcoin and cryptocurrency industry is still in its infant stages and there is not much historical data to foresee and predict future moves regarding the value of token. With less data available to analyze, this investment is a highest-risk, highest-return for the potential investors.
As there is no authority or Government to back the BTC, there is always a regulatory risk associated with it. Bitcoin can be used to make illegal transactions, money laundering, and black market operations. This has caused the relevant authorities to conduct a review. Although the miners are considered to be the regulatory authority, there is no physical backing for the BTC in case something goes wrong.
As evident, Bitcoin is a purely digital currency with no physical existence and proof. This means that your money is stored in a computer making it vulnerable. There could be a risk of malware and computer viruses which could potentially result in the loss of money, not to mention the circumstances if you ever forget your E-wallet password.
We have witnessed huge fluctuations in the value of Bitcoin in the past year or so. Due to high volume of buying and selling and a large number of transactions, the direction of market of the value of Bitcoin is difficult to predict and investing in it is not for a person who does not want to take risk in their investments.
The Bitcoin is not eligible for any tax advantages, so there are not good options to shield your investments from taxation.
The industry shift
Bitcoin was a unique concept when introduced at first which changed the way everyone looked at currency. It was the effect of the ease and facilitations it provided to individuals that there are now a number of crypto currencies working in the world. The most common of them after Bitcoin are Litecoin and Ethereum. With these crypto currencies in play, the online and quick payment systems have revolutionized causing a shift not only in the industry but also the financial markets worldwide.
The potential investors are looking at it as a financial asset due to the high profitability and growth opportunities it may have to offer in the future.
Just like any other thing, Bitcoin has certain advantages as well as disadvantages attached to it. Not to mention the fraudulent activities and stealing happening over the internet with no place to look for once you are robbed of your money. Who know where this will go in the future and opportunities or threats it brings.