A Cryptocurrency(nowadays Bitcoin) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency.
Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.
Bitcoin, created in 2009, was the first decentralized cryptocurrency. Since then, numerous cryptocurrencies have been created.
These are frequently called altcoins, as a blend of bitcoin alternative. Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money/centralized banking systems.
The decentralized control is related to the use of bitcoin’s blockchain transaction database in the role of a distributed ledger.
BREAKING DOWN ‘Cryptocurrency’
The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym, Satoshi Nakamoto. As of September 2015, there were over 14.6 million bitcoins in circulation with a total market value of $3.4 billion. Bitcoin’s success has spawned a number of competing cryptocurrencies, such as Litecoin, Namecoin, and PPCoin.
Every day, the price of a Bitcoin is jumping up by 30,000-40,000. As of report, a guy bought 5,000 bitcoins in 2009 for $27. And now it is peaking towards sky today 1 bitcoin=468188.59 Indian Rupee($7252.39)
How does one can acquire bitcoins?
As a value of Bitcoin is getting nearer to sky day by day. People start buying bitcoin as a mode of securing the future (can say as a mutual fund). So for buyers convenience, we have many websites and apps available on internet which allows you to purchase, exchange and sale your Bitcoin.
- As payment for goods or services.
- Purchase bitcoins at a Bitcoin exchange.
- Exchange bitcoins with Someone near you.
We have one more way to earn a Bitcoin. Here is the way that is Mining.
Mining: With Bitcoin, miners use special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine. For more on click Mining and start earning bitcoins. Earn bitcoins through competitive mining.
Cryptocurrency: Benefits and Drawbacks
- Cryptocurrencies make it easier to transfer funds between two parties in a transaction.
- The common currency for all countries it helps to transfer money worldwide.
- Money Securing-Mode of securing money as a bitcoins for future(can be sold at any time).
- Very Low Transaction Fees–For Bitcoins the fund transfers can be done with minimal processing fees, allowing users to avoid the steep fees charged by most banks and financial institutions for wire transfers.
- Purchases Are Not Taxed–Sales taxes are not added onto any purchases using Bitcoin.
- No Third-party Interruptions–There is no third party(such as banks). The system is purely peer-to-peer; users experience a greater degree of freedom than with national currencies.
- Wiping Of Transactions Records-Cryptocurrencies are virtual and do not have a central repository, a digital cryptocurrency balance can be wiped out by a computer crash if a backup copy of the holdings does not exist. Since prices are based on supply and demand, the rate at which a cryptocurrency can be exchanged for another currency can fluctuate widely.
- Risk Of Hacking And Threats– Cryptocurrencies are not immune to the threat of hacking. In Bitcoin’s short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value.
- Not Refundable-No Chargebacks or Refunds are possible once you have done with the payment.
- Exposure To corruption– Usually people stores their black money either in bonds or in Swiss Bank. Now the time has changed people got a new way to hide their black money in the form of Cryptocurrency(mainly Bitcoins). Can we say that it will lead to increase in the corruption? Tell us in the Comment section.