A quick and short introduction to BITCOINS
Since 2009, Bitcoin has been a buzz-word in the virtual economy. Its value has always surged, and at one point of time, 1 Bitcoin equaled $3,000 right after the launch. Quite surprising, isn’t it?
But, the irony is that there are yet many, who have no idea of ‘what exactly Bitcoin is.’ This article enlightens you, as to what Bitcoin is and how it can be your next great investment.
It’s a digital currency that can be bought and exchanged digitally only. Bitcoin units are generated by solving a computer math called ‘Blockchain Technology’, and owners are given ‘Bitcoin units’ in exchange. The process is known as ‘mining.’ Since a cryptography element is involved in the solution, so Bitcoins are also known as Crypto currency. Well, that’s not all about Cryptocurrencies. Virtual market has six more leading Crypto currencies in circulation, other than Bitcoins. These are: Litecoin, Ethereum, Zcash, Dash, Ripple, and Monero. According to a recent report by MarketWatch, crypto currencies own market capitalization of $100 billion with Bitcoins accounting for half of that. Having an insight into potential revenue is certainly wiser than investing in any market right off the bat.
How can you make a use of it?
Bitcoin is a currency that has though no physical presence, but you might have heard people investing in it. What is that investment all about and how can you carry it out successfully? Let’s talk it out in layman’s terms: Bitcoin has a value, which can be exchanged with any physical currency across the world. Be it Dollars, Pounds or Russian Ruble, the value can be exchanged with the amount of Bitcoin you own. Let’s put an example forward: Suppose you need to transfer RUB10, 000, i.e. $171.62. If you go the conventional way with any high-street bank, the process will take minimum 2-3 days to complete, and they will also charge commission fee for both exchange and transaction.
With Bitcoins, you can experience an ultimate transaction freedom with littlest exchange charges, and no other regulating constraint. Within minutes, you can meet your urgency, and all you need to do is buy and keep Bitcoins in your very private Bitcoin wallet, which will be anonymous, but with a unique ID.
Here is an example of Bitcoin’s transaction rate with US dollars and Russian Ruble
- RUB10, 000 = $171.68
- RUB10, 000 = 0.02 Bitcoin.
- Bitcoin 0.02 = $141.68
Bitcoin conversation rates fluctuate quite fast, even within an hour.
Dealing with Bitcoin, you save significantly on exchange commission.
Apart from this, here is the biggest draw to Bitcoin – It is volatile; because of which Bitcoin’s consumer base is constantly expanding. Reeling back to 2013, we can see that small-scale businesses had massively taken to Bitcoin as one profitable investment vehicle. It’s then, when Bitcoin’s value rose from $200 to $1000, that too just within a month! Ever since, its value has been surging, and as on Nov 02, 2017, it was: 1 Bitcoin = $7084.13. It’s a massive outpouring in just a couple of months. Key reasons that experts cite behind such outpouring include the below ones:
Increasing demand worldwide
Such an exponential surge in Bitcoin’s value has the investors calling out for crypto-currencies of all kinds. At one point of time, when digital currency was considered the domain of computer geeks and cranks, it has now turned out to be a mainstream investment vehicle for investors. Bitcoin is now seen as a neo-class asset, generating million dollar hedge funds.
Benefits of using Bitcoins for purchases and transactions
- User anonymity
Bitcoin transactions are completely discreet. Unless a user deliberately publishes its Bitcoin purchases, transactions are never linked with its personal identity, neither is it traceable. In fact, the anonymous account with Bitcoin addresses changes with each new transaction.
- No third-party involvement
Of all, this is the most publicized benefit of Bitcoin transactions. No government, banks, or other financial intercessors can ever interrupt Bitcoin transactions, nor place free order to Bitcoin accounts. The process is entirely peer-to-peer, and users experience a great level of financial freedom.
- Low transaction fee, and purchases are not taxed
If we speak about foreign transactions and wire transfers, high commission fees are involved in both the proceeds. Since Bitcoin transactions have no intermediaries or government regulations, transaction costs remain significantly low. In addition, since no third parties are there to identify, intercept and track transactions denominated by Bitcoins, it runs tax-free.