What is Bitcoin?
Bitcoin is a cryptocurrency that is an upgraded form of digital currencies. More commonly referred to as electronic money, Bitcoin is among the first decentralized digital currency that has allowed users to get independence from the formalities of banking services. Since its launch in 2008, Bitcoin has evolved drastically and has introduced the world with a newer system, leading to technological advancements in significant industries. Bitcoin provides a peer-to-peer blockchain network, which means that there are no third-party entities present within the transactions. When the financial system and majorly banks were targeted and accused of misusing borrowers’ money, rigging the economic systems and charging the customers with heavy fees for “managing” their accounts, Bitcoin pitched to put the seller in charge of their bank accounts, cancel the excessive interest fees that are charged and put forth a system where transactions are carried out transparently and swiftly. Many major companies, such as REED jewelers, Dell, PayPal, and Microsoft, have accepted and promoted this system to be more autonomous and intuitive and seek to adopt and integrate with their system completely.
Bitcoin, as stated before, is a decentralized network of cryptocurrencies. Its transaction procedures include a 16 character encrypted address which is mathematically secured and puts the owner into complete control of the transaction and the encrypted address. This answers the question of ‘is Bitcoin a good investment’? To buy Bitcoin, users need to follow a set of steps, which includes setting up a wallet on your desktop to manage the Bitcoin. For its purchasing, money is deposited onto online exchanges that connect buyers and sellers, which, when accepted, allow them to buy Bitcoin like a general online purchase.
What does Bitcoin do?
Bitcoin has undoubtedly developed an interest in many investors. There always remained some questionable doubts regarding digital currency, which were being projected onto Bitcoin too. Economists have long questioned digital currency over issues like inflation, money laundering, and counterfeiting. Bitcoin took these issues separately and presented promising solutions with its intriguing system.
By understanding its blockchain technology, a Bitcoin is created over every discovery of a new block whose rate and creation steps will be provided by its algorithm. It is said that the Bitcoins won’t fall from the number of 21 million, which doesn’t limit the coin. According to some users, it would encounter deflation, which would prove beneficial to some extent as the profit ratios would remain the same while their magnitudes would differ only.
Putting a hold on Double Spending
Users are concerned over the issue of spending the same digital coins multiple times. ‘What does Bitcoin do’ to solve this problem? With its decentralized procedure, it makes every unit unique, which does not remain a possession of the sender once a Bitcoin has been transferred. This is how it counters the issue of double-spending of coins.
Bitcoin has a very strict system where it doesn’t allow anyone to develop fake coins. They are entries in a ledger that can be publicly inspected. Thus it will be easily known to the network if anyone intends to create a new coin within the Bitcoin.
The process of purchasing Bitcoin leads to the creation of a blockchain where its mechanisms countercheck the value with the previous patterns. No user can surpass this process, which, if tried, makes the block invalid. Thus it protects the system for leading out processes that promote money laundering.
What are the major features of Bitcoin?
What is Bitcoin and what makes it a good choice in cryptocurrency. Several characteristics make Bitcoin a good investment.
This feature has brought innovation within the financial market with the approval and appreciation of many major stakeholders. The independence provided through this feature and the involvement that is created in mining and transaction is due to what many consumers would regard as promising.
It isn’t a hidden fact that these traditional banking systems virtually store their customer’s bank details, from addresses and phone numbers to credit histories. Why is Bitcoin a good investment, and what makes it promising is the anonymity it provides to its users by giving them the independence not to link any personal information with their wallets.
The blockchain record that stores off every transaction is public and can be freely accessed. This provides anyone with the power to check the value of the exchanges through the blockchain. However, tracing addresses are still out of record.
Unlike traditional banking services, Bitcoin performs the tasks in a few minutes for an individual sitting on the other side of the world.
Future Developments of Bitcoin
What does Bitcoin do and what endeavours it can achieve is not hidden from any of us. The rapid increase observed in 2017 after the 2016 halving is something that shows a scope in the development of the coin. With the coin being more mature, the 2020 halving (since every Halving where the number of bitcoin assets per block is halved, takes place after 4 years) might show a much more developed coin that seeks to take over the financial market. Bitcoin is moving into the mainstream, and many prospective investors are looking over to adopt this system.
Bitcoin’s ownership of assets is considered to be made mainstream with the progressing years since it intends to bring ease in handling physical assets digitally. Bitcoin has promoted traditional banks to set up their Bitcoin-like systems, yet Bitcoin focuses on staying ahead of them with its decentralized platform and the “Smart Property” narrative. This would change the blockchain into a kind of registry ownership of properties, which does project a very well-managed system. With Bitcoin maturing as an asset, the bitcoin exchanges have shown their importance as well. It is believed that the bitcoin exchanges would be the pioneer to the innovation and the upcoming trends of the coin.
Bitcoin has emerged from various obstacles and has promised us a revolutionary change in the financial system. It can be approached best through locating the best wallets, stores, and exchanges for trading Bitcoin.
Bitpanda is the leading crypto exchange in Europe with more than 1 million users. You can trade more than +30 cryptocurrencies, gold, silver and other metals.