If you are wondering about what’s all the hoopla about bitcoin and cryptocurrency, you have landed at the right place. This article will cover detailed information of cryptocurrency and bitcoin, right from the basics of these terms to the factors that have led to their popularity.
Continue reading to know more information about cryptocurrency and bitcoin.
What is Cryptocurrency?
Cryptocurrency is a totally decentralized payment system. By being decentralized, it is implied that each individual using this payment system has equal authority. This payment system allows people to exchange currency on the internet. Cryptocurrency has eliminated the need for a third party i.e. bank or a financial institute to complete the transaction as it can be performed without any supervision or authority in this system.
One of the prominent features of this payment system is that the users are not required to pay a huge transaction fee. The transactions, in most cases, are free. Even if there is a transaction fee, it is a meager one, which will not prove to be hard in your pocket. Moreover, the payments transferred through this payment system are pseudo-anonymous. It is impractical to trace the real-world identity of the users in this system.
What is Bitcoin?
Bitcoin, also known as a digital asset, is a form of digital currency. It means that it has no physical presence; this form of currency is created and held electronically i.e. in digital form. This form of currency is also not controlled and supervised by anyone.
Bitcoins are most commonly used to purchase online merchandise anonymously. Moreover, bitcoin network has also made international transactions more convenient. Simply because users are anonymous, the network is not tied to a particular country, there is no regulation related to it, and, above all, the transactions are cheap.
Acquiring bitcoins is easy. You can buy them on an exchange using different currencies. You can easily find a bitcoin exchange marketplace, where this form of currency is purchased and sold. Bitcoins can also be “mined” by solving complex mathematical puzzles on computers.
Similar to the digital exchange of cash, bitcoins can also be exchanged over the internet using mobile phone apps and computers.
Reasons behind Popularity of Bitcoins
The extensive features, which bitcoins boasts of, form the major reasons behind their popularity. Let’s shed a light at a few of them and how they are contributing to the enormous popularity that bitcoins are enjoying since the last few years.
Easier to Get Started with
One of the best parts, if not the best, of bitcoins currency, is that you can get started with bitcoin trading within minutes. Unlike bank accounts, which can often take days to open, a bitcoin account can be opened and operated in just a matter of a couple of minutes, or even lesser time. There is no initial fee to be deposited or other questions asked, which makes it easier for everyone to get started with bitcoins. You don’t necessarily have to be a tech-savvy person or computer geek to start exchanging this form of currency.
No Central Authority
There is no central authority or control in bitcoin network. Therefore, there is no risk of any person from the network taking away your coin. Moreover, you don’t have to take anyone’s permission to make an account. Since there is no gatekeeper, you can send or receive coins whenever you want to. It is basically a software, which anyone can download and use.
Another reason behind the popularity of bitcoin network is that transactions are fast. As soon as the payment is processed by the bitcoin network, the amount is transferred to the receiver’s account and the transaction is complete.
Once a payment has been made, it can’t be reversed. Since there is no central authority, there is no way a transaction can be overturned. Only the person making the transaction has control over the amount of currency he wants to send.
You can make any transaction with any person, without having to reveal your real identity. The amount is transferred to the digital wallets of the receiver. It has no connection to their real-world identities. However, the flow of a transaction can be tracked.
Cryptocurrency and bitcoins network offers a secure platform. Funds in these networks are locked in a secure system called public key cryptography system. An individual will only be able to exchange money if they have that particular private key. This system is impossible to be breached because of strong cryptography.
Demand in Asian Market
There has been a noted rise in the price of cryptocurrency in recent times. A factor that has contributed to this rise is legislation of this form of currency in Asian Market. Japan’s government has green-signaled the use of this currency and Chinese investors have shown interest to tap the potentials of cryptocurrency.
How has Cryptocurrency solved the Problems of Conventional Money?
The current money exchange system that is prevalent in the world has a lot of issues, which cryptocurrency has helped to solve with its unique exchange method. Money transfer, which took a long time, proper supervisions, and a central authority, can now be done within minutes if you are using cryptocurrency. As discussed above, the method is secure, anonymous, and easy to operate. Therefore, money transferring or online purchasing is no more an issue, which it was with the use of credit cards. Moreover, you are spared of credit card fees and limitations if you are using this form of cryptocurrency.
A Final Word
To sum it up, the future of cryptocurrency is surely bright. Its popularity is predicted to reach new heights in coming few years because of its extensive features. However, the flipside of the use of this form of payment system is that if any user has fallen prey to a scam or a fraud and transferred money, there is no way it can be recovered.