What do you know about Bitcoin? Do you know that it is the Cryptocurrency? What do you know about Cryptocurrency? Even if you have no idea about Bitcoin, don’t be worried. Because what we are going to see here is nothing but all what you need to know about Bitcoin.

As you might have already heard, Bitcoin is the first and most valuable cryptocurrency in the world. Let us learn what it is, how it works, and also the advantages and the disadvantages of it.

What is Bitcoin?

First and foremost, Bitcoin is a form of digital currency and it aims to eliminate the need for central authorities such as banks or governments. And more importantly, Bitcoin uses block chain technology to support peer to peer transactions between users on a decentralized network. The transactions are authenticated through Bitcoin’s proof of work consensus mechanism, that towards cryptocurrency miners for validating transactions. Bitcoin was launched in 2009 by a mysterious developer known as Satoshi Nakamoto, and off course Bitcoin was the first and remains the most valuable entrants in the emerging class of assets known as cryptocurrencies.

How Does it Work?

Each of the bitcoins is a digital asset that can be stored at a cryptocurrency exchange or in a digital wallet. More interestingly, each of the individual coin represents the Bitcoin’s current price, but at the same time you can also own partial shares of each coin. And the smallest denomination of each Bitcoin is called a Satoshi, sharing its name with Bitcoin’s creator. Each Satoshi is equivalent to a hundred millionth of one Bitcoin, so owning fractional shares of Bitcoin is quite common.

What is Blockchain?

Bitcoin is powered by open source code known as blockchain, which creates a shared public history of transactions organized into “blocks” that are chained together to prevent tampering.

Private and Public Keys:

A Bitcoin wallet contains a public key and a private key, which work together to allow the owner to initiate and digitally sign transactions. This is instrumental in unlocking the central function of Bitcoin. And it will allow securely transferring ownership from one user to another.

Bitcoin Mining:

Users on the Bitcoin network verify transactions through a process known as mining. Mining is designed to confirm that new transactions are consistent with other transactions that have been completed in the past.

How is Bitcoin Making Money?

Bitcoin runs on a decentralized computer network or distributed ledger that tracks transactions in the cryptocurrency. When computers on the network verify and process transactions, new bitcoins are created, or mined. These networked computers, or miners, process the transaction in exchange for a payment in Bitcoin. This is how bitcoin makes money.

Is Bitcoin a Good Investment?

Bitcoin is risky for a lot of reasons. But the big reason it’s not a safe investment is because it can have huge swings in price in the blink of an eye. In the investing world, that’s called volatility. And volatility isn’t good for an investment portfolio. Since it is liable to volatility, one can’t say that it is a safe investment. But there are cases in which the investors have earned a lot of profit out of that. Therefore one can’t classify it as good or bad unless one gets an experience out of this. And it has also got a lot of luck factor as well.

FINAL WORDS:

As we have reached the conclusion of our discussions on Bitcoin, what we need to remind ourselves is the fact that it is a cryptocurrency and investing in it should not be taken for granted. If you are a person who is interested in investing in Bitcoin, you need to remind yourself of the fact that it is a risky investment. If you are ready to take the risk you may invest in this. By now you must have got the necessary informations regarding this and if you have got any further clarifications regarding this, feel free to reach out to us in FIMKIN. Our team of experts are always ready to render the service for you.