What is a Bitcoin?

Bitcoin is a digital asset that carries value. It is called by many names such digital currency, electronic money or Internet money is relying on the concept of cryptocurrency. It is a dynamic currency system.  Thus, money transaction is from a sender to a receiver. The whole concept that makes it unique is that it runs on decentralization.

Satoshi Nakamoto launched the concept of Bitcoin and powered it with the technology of Blockchain. A public ledger, generated during the process. The ledger contains all the transaction details.

Trading of bitcoins occurs in many forms such as buying goods or services. The process for creating Bitcoins is mining. In this process, developers solve painstaking mathematical problems. Every solution earns a Bitcoin. It takes high-end devices such as GPU (Graphical Processing Unit) or ASIC (Application Specific Integrated Circuits) to solve these complex equations and may involve a group of people accomplishing the task.

Bitcoin: The Decentralized Currency

The financial institutions and law & order have no control over this form of currency. They are not involved in its creation in any manner. This poses some serious threats such as cyber criminals which benefits them with the technology. The power of creating traditional currency lies with central banks. Hence, the currency has limitations. Bitcoins have free movement due to de-centralized structure.

Seizing of Bitcoin accounts is not possible They are not even liable for taxation. This kind of free movement allows lower transaction charges and thus benefiting the users. Not only this, the storage of Bitcoins is simple. They are stored in online wallets or on the cloud.

Bitcoins, the future of currency, has both pros and cons. The idea of mining the currency is innovative but addressing the risks associated is a major challenge. It would take some more time for Bitcoins to establish completely in the market.

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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