What is Bitcoin?
Bitcoin can be described as a secure, speedy and a cost- effective way to transfer funds across borders. Technically, bitcoin is a mathematically structured, limited, tested, transparently acquired and a regionalized invisible currency which is strengthened by cryptography to ensure security. Why the question do you buy bitcoin?
This virtual currency however has the following features:
– Instant payment across international borders
– Irreversible transactions no matter the circumstance
– Elimination of Third Party
– A system devoid of manipulation, control or interference by any government, entity or organization.
Bitcoins are made through ‘mining’ procedures and usually created in blocks of 50. Mining in bitcoin is a procedure through which transactions are checked and then included in the public ledger known as the block chain where bitcoin is newly released.
In simple terms, one party transfers a certain value of bitcoin to another party using an electronic bitcoin wallet. This wallet in bitcoin is the name for the digital files where these two parties or wallet owners store their encryption keys as a proof of ownership for the wallets.
These transactions are facilitated by connected computers in a network that mine bitcoin and are in a shared public ledger known as a block chain.
This block chain is retained over the entire network based on peculiar cryptographic regulations and every transaction is to be corroborated by computers (nodes) on the network before it’s approved. Immediately the mining computers on the network finish the complex algorithms required to complete each transaction, the owners of the mining computers are rewarded with a number of Bitcoins.
Importantly, the bitcoin transaction is verified no lesser than six times by distinct computers in the network before the wallet owners receive their payment. This ensures that the wallet transferring the bitcoin has enough bitcoin to facilitate the amount it wishes to transfer, that the appropriate number of Bitcoins is transferred accordingly, that the balance of each wallet is of the correct amount after the transfer is completed and that each computer authenticating the transaction inputs its own set of numbers in the block chain.
When the transactions increase, the calculating and evaluation power needed to complete each transaction increases as a result of bigger block chain and the higher difficulty of the algorithms required to complete each operation.
So now that we have refreshed ourselves on what exactly Bitcoin is, it takes us back to our original question, seriously do you buy Bitcoin? Whether your answer is a Yes or No, here are a few things that you need to know about the advantages and the down sides of Buying Bitcoin. This is because no matter what part of the divide you are it is important to know both sides of the story, so you decide what’s best for yourself
PROS OF BUYING BITCOIN
High Yield over Small Period
Bitcoin has been doing quite well for itself in such little time. Investors who invested a little fraction of its present cost are reaping mouth watering profits and becoming millionaires overnight. Its current value has a lot of business men biting their fingers and wishing they listened to those who asked them to invest in bitcoin.
Guaranteed Privacy and Lower Risk of Fraud
When using credit cards, the risk of paying both physically and online is high because the other party has acquired access no matter how small. Credit cards operate a “pull” system of payment where the store or merchant initiates a payment with your card and pulls the amount required from your account, but Bitcoin operates a “push” mechanism which allows the sender to pay exactly the amount required without any other information being released to the receiver. Bitcoin also protects identities because it only uses digital IDs.
Perfect for sending money to family abroad
Sending money to people around the world is easier and safer with bitcoin. Usually buying things physically or through other platforms include third party issues, delays, high charges and a load of cock and bull stories but not with bitcoin. There’s no third party involved and your money safely cross borders without little or no hassle once you’re connected to the internet .
No Bank or Purchase Charges
Since no bank is involved, you don’t ever have to be charged on your purchases and there is no third party interference. As there is also no way that any third party can trace or interfere with transactions that are denominated in bitcoin, sales taxes cannot be charged on them.
Bitcoin transactions have no middleman institutions or government interference therefore the costs of bitcoin transactions are quite cheap. This is a crucial advantage for travelers. Furthermore, bitcoin is very fast and does not keep you waiting over authentication processes.
CONS OF BUYING BITCOIN
Lack of Awareness
People are yet to discover bitcoin and only a small number of people and majorly business know about bitcoin. Some merchants also have not started accepting bitcoin and they need to be educated on it. Bitcoin’s advantages in comparison to other currencies and payment system is actually quite low not many people are ready for it or even understand the concept of bitcoin.
Bitcoin and the cryptocurrency industry in general is known for its high rates of volatility. This is a currency that can swing up or down dozens of percents within a few hours which is something a lot of investors don’t feel too comfortable with. If you are not one who enjoy the rollercoaster ride that Bitcoin gives its backers, then you should carefully consider before you put your money in.
The risk of bitcoin as stated earlier is also high because this currency is in its infancy stage and many are not sure that they can invest in it and trust that their money isn’t in the wrong hands. New features and developments are being worked on by bitcoin to make it’s operations smoother and easier but bitcoin needs time to work out its issues just like every other currency that has ever existed.
Bitcoin is a new, innovative and interesting way to exchange services and wealth. It seems to be the currency that the whole world is talking about and the new wave to easily jump on but its risks are also to be carefully considered when choosing to venture this path. Bitcoin might just go right or and on the other hand, might go wrong.
For the moment it seems it will be around for a while. Check out this community that has helped literally hundreds of thousands become financially independent since 2005.
I hope I was able to share a little more insight on this new cryptocurrency in my article “Seriously, Do You Buy Bitcoin?”
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To your amazing future.
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