Is Bitcoin a digital currency?

Is Bitcoin a digital currency?

2017 is the year that will be cherished for the upsurge of the bitcoin mania. However, most people still find the concept quite confusing. Bitcoin is the first decentralized peer to peer payment system that is not tied to any central authority. It is powered and organized through a network called blockchain.

The blockchain is an online ledger that records and secures all bitcoin transactions. Most refer to it as 50 cash for the internat' Bitcoin was launched way back in 2009, but recently it has soared in value. It is the first implementation of cryptocurrency.

What is cryptocurrency? Cryptocurrency is a virtual currency that is designed to function as a medium of exchange. It verifies and secures its transactions through cryptography technology. Cryptography also controls the creation of new units in a certain cryptocurrancy.

Who owns or controls bitcoin network? No one, in particular, owns or controls bitcoin network. This is because the blockchain has been decentralized across all computers that contain bitcoin wallets. All the users of bitcoin from around the world control bitcoin network. Users can flexibly choose the type of software and version to use. However, the software must share common rules for it the network to work in consensus.

How bitcoin work? Most people view bitcoin to be more of a computer program or mobile application that provides you with a wallet that enables you to send and receive payment in the form of bitcoin. The entire bitcoin network shares a large public ledger commonly referred to as blockchain. Every transaction that is done is verified and stored in the blockchain. It uses digital signatures to verify the authenticity of every transaction.

The digital signatures must correspond to the sending addresses to allow other users to control the sending of bitcoins. Blockchain verifies itself automatically and at certain intervals thus, creating a self-auditing mechanism. This helps to guarantee the accuracy of all the data it stores. It buries the data and makes it hard to manipulate or alter. For you to process a transaction in a blockchain, you need special hardware with superb computing power. You must solve a puzzle after which you earn a reward in the form of bitcoins.

The process is termed as aDmining' Through mining, you confirm transactions and add them to the public ledger. Since mining is open source and competitive process, you must struggle to be the first to solve the puzzle and add a transaction to the ledger. The complexity of blocks, transactions, and manner in which blockchain ledger is designed ensures that no one can change or quickly add a block at their will Thus, in bitcoin, there are no chargebacks, frauds or identity theft.

The mining process gives bitcoins their value and is referred to as a proof-of-work system. How can you acquire bitcoins? There are various ways through which you can acquire bitcoins. You can purchase them at a Bitcoin Exchange, exchange them with someone around you, receive them as payment for goods and services, or earn them through mining.

It is also possible to find someone willing to sell them to you in exchange for a PayPal or credit card payment although most exchanges limit such methods. When buying bitcoins, it is paramount to consider several aspects among them privacy, ease of access, limits or the amount to buy, exchange rate, reputation and payment method.

While bitcoins have the lowest transfer fees, it is also worth considering when making a purchase. Some companies are willing to link to your credit card or bank account than sell you the bitcoins. Coinbase is such company that requires you to open an account than sell you bitcoins. In case you don't want to expose your identity, companies such as Local Bitcoins can connect with you than sell the coins to you in person.

When you get bitcoins, you can store them in a wallet. There are several types of bitcoin wallets, and you can choose the best depending on the security level and features you need. There are cold wallets, hot wallets, desktop wallets, physical wallets, mobile wallets, online wallets and hardware wallets. All these wallets resemble and work like a bank account. You use it to send, receive and store bitcoins.

What makes them valuable? Due to the lack of government or intervention from any other third party, it can be hard to predict the value of these coins. Essentially, the value of bitcoins is derived from its supply and demand just like any other stuff. It has generated an ecosystem where people are now willing to accept and trade on it.

What are the benefits of using bitcoins? • Freedom of payment- bitcoins are not limited by geographical locations or regional borders. You can send them electronically from one person to another anywhere in the world. Besides, with bitcoins, you are not limited by bank holidays because you are in full control of your money. • There is limited fraud-any transaction you do is irreversible and irrevocable. Additionally, transactions don't carry your sensitive or personal information. If you are a merchant, than you are protected from potential losses that may arise due to frauds.

You can also venture into any market where frauds are high. • You decide on your fees-there is no charge levied on you for receiving bitcoins. In fact, several wallets give you full control of the fees you want to pay as you spend. If you want faster transaction confirmations, than you might need to pay more.

However, the charge is not based on the amount you are transferring. It means you can incur the same cost for sending 1BTC with someone sending 100,000 bitcoins. • There is so much transparency, and neutrality- all information regarding the supply of bitcoins is available for the public to see. No one can alter or control the bitcoin network since it is cryptographically safe.

Are there any drawbacks of bitcoins? • Volatility-the number of bitcoins that is currently in circulation is still small. This affects its stability, hence, prone to fluctuate in value. • Low degree of acceptance-several people from different parts of the world are still skeptical about bitcoin and its technology.

Are they legal? Yes, Bitcoins are legal. In fact, a very negligible percentage of all the bitcoin transactions have been termed illegal. Since the system is secure, there are no instances of fraud that may compromise its legality. The future of bitcoins Bitcoin has made us view currency from a completely different perspective.

In fact, it is far much better than fiat currency, considering you can send and receive it with no limits. It has been predicted that by 2024, about 94% of the total 21 million bitcoins will have been released into the market. It means there is still much more to expect from bitcoins and its underlying blockchain technology.

Future aspects and predictions of bitcoins
The crazy growth and frequent fluctuations associated with bitcoin have had investors, venture capitalists, entrepreneurs and bankers talking. Experts have weighed several aspects of bitcoin including its longevity, cryptography, the blockchain, its originality and the current trends in the token sales. It is evident that bitcoin is here to stay. Analysts have done bitcoin predictions based on its supply and demand. David Drake, LDJ Capital founder, asserts that the value will rise to $20,000. Ronnie Moos, Standpoint Research Inc. founder revised the bitcoin price outlook from $7,500-$11,000. Barely a month, he has again revised the value from $11,000-$14,000. Though there is a fixed supply, the demand is growing, and the prices will rise. In fact, its value is now worth more than that of gold. Investors are now finding it better to invest in bitcoins rather than share markets.
What started off as a dribble with only a few individuals trading on it is now the buzz with several non-traders finding their way into the market. 2018 will be the year when several countries of the world will become decisive on how to manage the growing industry. This year we can expect the price of bitcoin to trade at somewhere around $10,000-$50,000. Though there are several speculations, the bitcoin market will grow then mature steadily. 

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