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You must've heard the word "bitcoin" a few times and its value too. However, you might still be confused about what it is? We all know, bitcoins are valuable and are considered to be a replacement for gold in the future.
Bitcoin is a popular cryptocurrency. The popularity of this kind of digital money has risen over the last few years but the instability and the unpredictability of the currency and its value make it harder to invest your hard-earned money in them. Today, a single bitcoin is worth more than £27,000, which is a massive amount of money.
At present, bitcoin seems to be gaining more and more value. However, as mentioned earlier, the currency is very unpredictable and can leave you with a significant loss overnight. The reason being, bitcoin increase as well as decreases in value with a sudden drastic change, which can either make you more prosperous than ever or make you lose all of it at once.
Now, let’s talk about what bitcoin is?
What is a Bitcoin?
Have you ever heard of cryptocurrency? For those who haven’t, cryptocurrency is digital cash or virtual money that can be spent, sold, and bought online. Similarly, this is the most valuable cryptocurrency in the world today. All your money in bitcoins is online cash that is entirely virtual and can be used for purchases and services online. Nonetheless, many shops and companies do not support or accept bitcoins, and some countries have banned their use altogether.
Other than this, many people consider the bitcoins seen in photos to be the real deal. However, they are just a novelty. Any bitcoin without its secret code printed inside them is ultimately futile and worthless.
How does it work?
Well, this is simple. Bitcoins are stored in a digital wallet app on smartphones and computers, which you can receive and send to other people. Moreover, each bitcoin can be sent as it is, or a part of it can be transferred to another person, depending on your requirement.
Each transaction you make is recorded and saved in a public list known as the blockchain, which later helps you track all your transactions and refrain from any duplicity or illegal transactions made by a user who does not own those bitcoins.
Furthermore, many people often find it confusing that where do these bitcoins come from? Each bitcoin is bought or owned by an individual through one of the three ways. Either by buying them in exchange for real money, selling your goods online, receiving cash in bitcoins, or creating them.
And now you might be wondering how bitcoins are created? The answer is people set up powerful computers that help make bitcoins through a process called mining. However, the electricity required to making one single bitcoin might end up being more than the value of the bitcoin itself.
Are Bitcoins Secure?
Honestly, there is no correct answer to this question. On the one hand, Bitcoins are considered to be highly safe and practical, as there are no governmental organizations or banks involved, and each transaction is recorded, which reduces any chances of theft.
However, it is still possible to either lose your bitcoin wallet or delete them and ultimately lose them forever. Moreover, thefts have been reported through websites that allow bitcoin owners to store their bitcoins remotely. Hence, make sure to gauge every aspect before investing in one.