Bitcoin has been in the news for the last few weeks, but many people are still unaware of it. Can Bitcoin be the future of online currency? This is just one of the frequently asked questions about Bitcoin.
How does Bitcoin work?
Bitcoin is a type of electronic currency (CryptoCurrency) that is autonomous from traditional banking and entered circulation in 2009. According to some leading online retailers, Bitcoin is considered the most famous digital currency that relies on computer networks to solve complex mathematical problems to test and recorded the details of each transaction made.
The exchange rate of bitcoin does not depend on the central bank and there is no single body that manages the supply of cryptocurrencies. However, the price of bitcoin depends on the level of trust that users have, because the more large companies accept bitcoin as a method of payment, the more successful bitcoin will be.
Benefits and risks of Bitcoin
One of the advantages of Bitcoin is the low risk of inflation. Traditional currencies suffer from inflation and tend to lose their purchasing power every year as governments continue to use quantitative easing to stimulate the economy.
Bitcoin does not suffer from low inflation, because Bitcoin mining is limited to only 21 million units. This means that the release of new bitcoins is slowing down and that the full amount will be excavated in the next few decades. Experts predict that the last Bitcoin will be mined by 2050.
Bitcoin has a low risk of collapse unlike traditional currencies that rely on governments. When currencies collapse, it leads to hyperinflation or deleting someone’s savings in an instant.
The Bitcoin exchange rate is not regulated by any government and digital currency is available worldwide.
Bitcoin is easy to carry. A billion dollars in Bitcoin can be stored on a memory card and put in your pocket. It’s so easy to transport bitcoins compared to paper money.
One flaw of Bitcoin is its unnatural nature, because governments and other organizations cannot trace the source of your funds and as such can attract some unscrupulous individuals.
How to make money with Bitcoin
Unlike other currencies, there are three ways to make money with Bitcoin, savings, trade and mining. Bitcoin can be traded on open markets, which means you can buy Bitcoin at a low price and sell it high.
The value of bitcoin has fallen in recent weeks due to the sudden suspension of trading on Mt. Goxu, which is the largest bitcoin exchange in the world. According to unverified sources, the trade was stopped due to the theft related to flexibility, which is stated to be worth more than 744,000. The incident affected investors’ confidence in the virtual currency.
According to the Bitcoin chart, the bitcoin exchange rate rose to more than $ 1,100 last December. Then more people became aware of digital currency, then the incident with Mt. Goxom and dropped to about $ 530.
In 2014, we expect bitcoin to grow exponentially worldwide with both retailers and consumers, Stephen Pair, co-founder of BitPay and the CTO, â € œwe expect to see the highest growth in China, India, Russia and South America.
India has already been listed as the next probably popular market that Bitcoin could enter. Africa could also benefit greatly from using the BTC as an exchange currency to get around without a functioning central bank system or any other country that relies heavily on mobile payments. The expansion of Bitcoin in 2014 will be led by Bitcoin ATMs, mobile applications and tools.
World Experiences Bitcoin
More people have embraced the use of Bitcoin and supporters hope that one day consumers will use digital currency for online shopping and other electronic business. Large companies have already accepted payments using virtual currency. Some of the big companies include Fiverr, TigerDirect and Zynga, among others.
The future of Bitcoin
Bitcoin works, but critics say the digital currency is not ready for use by the mainstream because of its volatility. They also point to hacking the Bitcoin stock market in the past which has resulted in the loss of several million dollars.
Proponents of digital currencies say there are newer stock exchanges overseen by financial experts and venture capitalists. Experts added that there is still hope for the virtual currency system and that the projected growth is huge.
I hope this article has helped you gain a much clearer understanding of Bitcoin, its potential, whether Bitcoin works, and how Bitcoins work. For more articles on Bitcoin, weekly trends, information and updates, subscribe to our blog post.