We are living in the modern era and everything is changing, at high speed. We all are accepting changes in technology and also enjoying its privileges whether it’s online buying, online selling, online education, e-books, online travel booking and many more. Then why not buying these services with digital currency? With India stepping towards the cashless transaction, to move ahead with technology bitcoins can serve as the gateway to move towards digital currency. Now the many questions arise what is bitcoin and how it works? How to get bitcoins? And how they are stored bitcoins? So let’s take a tour to know about bitcoins.
What are bitcoins?
Bitcoins came into existence in 2009. Bitcoins are the first cryptocurrency, it’s a form of electronic cash sent peer to peer and it works without a financial intermediary. Cryptocurrency is nothing but Combination of 0s & 1s which is Stored in digital format in computers around the world. It’s a currency which allows users to buy and sell goods as well as services and swapping of money without concerning banks, credit cards issuers or third parties. Bitcoins aims to put the seller in charge, eliminate the intermediary, zero interest fees and make transactions transparent which minimizes the risk of hacking.
How to get bitcoins?
Ther are two ways one can get bitcoins-
- By trading/investing
- By investing–
The easiest way of getting Bitcoins is to buy them. Bitcoins are available from various exchanges.one can pay for bitcoins with cash, credit and debit card transfers or even with other cryptocurrencies. But first, you’ll need a Bitcoin wallet to store them. There is a variety of bitcoin wallet. Some of them are: online wallets, hardware wallets, desktop wallets, and paper wallets.
Paper wallet- It’s a document which has a public address which is used to receive Bitcoins and a private key, which allows you to spend.
Mobile wallet- It’s for those who use bitcoins on daily basis and it runs on Smartphone which stores the private key.
Desktop wallets- These wallets are designed for desktop and laptop which you need to download and install in your computer, storing your private keys on your hard drive.
Hardware wallet- It’s a different type of bitcoin wallet that saves the user’s private keys in a hardware device. It is the most secure way of storing any amount of Bitcoins.
In India, few platforms are available for investing and exchanging bitcoins. Mentioning some
- Mining- Mining is a difficult process which requires compiling recent transactions into blocks and trying to solve a computationally and mathematically difficult puzzle. It’s a process by which transactions are verified and added to the public ledger, known as the blockchain, which in turn releases a bitcoin. It requires suitable hardware to participate in mining.
How bitcoins works?
Bitcoins works on decentralisation hence no world governments, banks can interfere with BTC transactions, cannot impose transaction fees. Bitcoins transactions are verified by network nodes through cryptography and are noted in public distributed ledger called a blockchain. The system depends on cryptography for controlling the creation of currency. In a simple way, we can say that bitcoins is open source which is not controlled by anyone and everybody can take part.
Everything has its pros and cons so let’s look at the pros and cons of bitcoins-
- Safety and control– Bitcoin users are able to control their transactions since no one except you and the other who receives payment will know. No one can withdraw money without your approval and your privacy is the highest priority.
- Freedom-They are not governed by any government that means you don’t have to pay tax and you owe all your collected bitcoins.
- Portability– Since bitcoins are a digital form of currency you can carry any amount of money. And they are accepted in many countries so you can enjoy hassle-free transactions.
- Transparent- The system is designed in such a way that system itself keeps a record of every transaction as well as track issuance of currency.
- Easy and Fast- The transactions are fast and irreversible.
- Legal-Bitcoin’s legal status varies from country to country. In some countries, the use and trade of BTC are optimistic, while in others it is banned and outlawed.
- Lost keys– A key is a unique alphanumeric password which is essential to access a Bitcoin wallet. If you lose the key that means wallet is lost.
- Volatility- The prices of Bitcoins are very uncertain and have a fluctuating market
Bitcoins are the future money so don’t hesitate to invest. With proper knowledge and guidance, one can easily enjoy investing in bitcoins. They are worldwide accepted currency, you can use them in any country without having to convert between currencies. It works on Blockchain which is really secure and chances of hacking and fraud are very less.