Bitcoin is a digital form of currency that is held electronically by the user. User can buy a product or service. Bitcoin is not printed in any form such as notes or coins like traditional currency. It circulates only on online network. Bitcoin works on the platform of cryptocurrency and is difficult to earn. The concept is simple and easy to use.
A user can send or receive Bitcoin. Bitcoin has a registration number maintained on a public ledger. Three important ingredients of a successful transaction are ledger, address and key. Each transaction is a block. These blocks have a record in a ledger. It has all the previous transaction records too. Money transfer is through an address. Key holds the ultimate importance. It is the private structure, which signs the transaction.
Characteristics of Bitcoin
Bitcoins are created through mining. A process by which users solve mathematical equations using software and earn rewards in return. There are certain characteristics of Bitcoin that makes the currency not only unique but also debatable. Bitcoin platform is instant and fast. Bitcoin setup is through online and offline wallets. The processing fee is minimal.
Bitcoin transfer is irreversible. Though the transactions are transparent but the identity of a user is anonymous. It’s only the address, which is visible. Thus, making it a little complicated. It works on de-centralization. No authority has control over the currency. This particular feature makes it both powerful and risky. The risks involve cyber crimes and thefts.
Thus, Bitcoin is a very innovative and new approach of running economy. Despite of many risks associated with the currency, it still holds the value of $9 billion in the international market. Currently, the value is fluctuating but if the technology were harnessed in the right direction, the prospects would be great for the future.