need to know bitcoin

5 Things That You Need to Know About Bitcoin

Whether you are a social butterfly or live under a rock,there’s no doubt you’ve heard of Bitcoin. Perhaps you’ve even considered buying Bitcoin! It would be best to get informed first. Here’s what you need to know about Bitcoin.

How Bitcoin Works

Bitcoin is the first cryptocurrency, or virtual currency. It is created by the process of mining. Basically, cryptographic calculations are completed by miners which in turn create blocks that added to the existing chain, aka the blockchain. Each transaction on the blockchain is kept as a public record to confirm the transaction. It can also be considered a ledger. This ledger is distributed on every miner to prove transactions and balances.

Initially, owners of Bitcoin found it was difficult to transact freely with Bitcoin, due to lower retail acceptance. As development increased, more and more organizations and major retailers accept payment in Bitcoin. As popularity grows and regulations change, it is likely see the words “Bitcoin accepted here” in shop windows the world over.

Cryptocurrency Benefits

As a virtual currency, it can be transacted across borders, without geographical limitations. This helps to provide a frictionless global currency that holds universal value wherever you may be. It is also quite portable in this regard as it doesn’t take any physical space, making it easy to carry any amount of Bitcoin.

Bitcoin’s Value has Increased Vastly

From humble beginnings, and through tremulous times, the Bitcoin value has grown significantly since its inception. Now the price of a single Bitcoin is valued at around $7,000, making it a very lucrative prospect and a valuable commodity to own.

So much is the value of each individual Bitcoin that it is fair to say that if you own even a single coin, you are from the wealthier portion of society. Nowadays, traders and buyers will transact in smaller portions of the coin, much like the cent of a dollar. By working with fractions, Bitcoin is still accessible to everyone and everyone can buy into a very promising currency.

With Bitcoin’s value so large now, it is not difficult to see how owning a few thousand coins from the beginning could have made you a financial windfall.

Bitcoin Controversy

The idea that Bitcoin is a scam continues to circulate despite it’s massive popularity.

With the likes of major financial institutions and tech firms openly calling Bitcoin a pyramid scheme, it is fair to say there is a storm of controversy, such as thefts and hacks.

Warren Buffet have declared after consideration of the Bitcoin model that it is a pyramid scheme and will collapse eventually, leaving a financial vacuum and many heartbroken investors in its wake. These nagging criticisms refuse to abate, and with such scathing indictments being made against Bitcoin, it is easy to see why people still remain cautious around it.

Furthermore, Bitcoin has done itself no favors and now finds itself under investigation in the US. With so many people heavily invested in Bitcoin, it is not going to be easy for Bitcoin to see this out unscathed when falling foul of financial regulators. It is not a promising situation when the US Justice Department begins a criminal investigation into your operation.

Unfortunately, the nature of pyramid schemes, Ponzi schemes or any financial scam is that people only really know if it truly is one when it is too late. For now, though, there are as many large organizations backing Bitcoin as there are detractors, so this should go some way to put investors’ minds at rest.

Bitcoin is (Mostly) Decentralized 

Stop. Calling. Bitcoin. Decentralized. It is not.

Egor Homakov 

Bitcoin is a decentralized platform with a pseudo-centralized team of varied collaborators, developers and miners. Because miners create Bitcoin, this is the single most important aspect of sustaining Bitcoin. Investors with massive amounts of Bitcoin tend to be the ones that sway prices and create hype, and when Bitcoin gets investigated, it really means that those significant players at the center of Bitcoin are being investigated.

Bitcoin’s decentralized nature has many benefits, it provides a limitless and seamless transactional experience for people anywhere in the world without worrying about the implications of governance.

The downside to being decentralized is that should anything go wrong, there is absolutely no one to complain to. No real way of rectifying issues unless they happen across a significant portion of users. If the experiment fails then some could assume that the decentralized network could have been the cornerstone of the whole plot.

Bitcoin is Likely to Become A Real-World Currency

The aim of any cryptocurrency is to become a currency used in daily situations all over the world. When this happens, the currency’s value will soar, its intrinsic value will leap exponentially and those that own Bitcoin will be very well off indeed.

Bitcoin was the first virtual currency, it is also likely to be the first currency to go mainstream and be transacted frequently in the real world. This is because consumer confidence is high, retailers are accepting the coin as a form of payment more readily, and banks and financial institutions are seeing the benefits of cryptocurrency as a whole for creating a borderless transaction network.

The only thing delaying Bitcoin is the government’s inability and unease with enforcing regulations for cryptocurrencies. But given that the coin has lasted thus far with slow transactions, it wouldn’t be at all surprising to see it go mainstream soon.