What is Bitcoin?
Bitcoin is one of the most popular digital currencies in the world and is also known as digital gold. It is fast becoming a mainstream form of payment in many countries. Bitcoin has been around for over a decade now and is only getting more popular with time. Along with this, the value of Bitcoin has also increased at a very rapid rate over the past few years, which means that people are willing to invest in Bitcoin more than ever before, or will continue to do so. So let’s find out what Bitcoin is:
Bitcoin is a cryptocurrency also called virtual currency. Being a decentralized digital currency, it does not belong to any country or central bank, nor is it issued or controlled by any government. It has no physical representation so it is called a form of digital currency. It was created in 2009, but the concept of cryptocurrency dates back to the 1990s. Bitcoin was designed to be secure and anonymous. It is created using a mathematical formula and is not controlled by any central authority.
No central authority is required to issue new bitcoins or cryptocurrencies or track transactions. Bitcoin relies on peer-to-peer (P2P) networks and cryptographic technology, or crypto networks, making it an alternative currency for people living in countries with unstable economies. Its transactions are recorded on a public ledger called a blockchain, which uses cryptography to ensure that transactions are secure and cannot be tampered with.
Invention of Bitcoin
Bitcoin was created in 2009 by an unknown person or people named Satoshi Nakamoto. However, the concept of Bitcoin was introduced in 2008 by Satoshi Nakamoto, who presented his invention as open source software. The main purpose behind the creation of Bitcoin was to create a “peer-to-peer electronic cash system”.
World’s first Cryptocurrency
In addition to being the first decentralized digital currency, Bitcoin is the largest cryptocurrency by total market capitalization. Decentralization means it is not controlled by any government company or bank.
The total supply of Bitcoin in the entire world is 21 million ie 21 million, but 18.6 million BTC have been mined so far, with the remaining 2.3 million being mined. Which may take about 120 years to mine, which will be around 2140 for all Bitcoin trading and use. That is, till now about 90 percent is in the market and 10 percent needs to be done. But surprisingly it took 10 years to mine 90% of Bitcoin and 120 years to mine 10%. Above all, the main reason is the increasing difficulty of Bitcoin mining.
Bitcoin mining is done to create Bitcoins. Bitcoin mining is a process by which people solve complex mathematical problems with a special type of computer, as a result of which they receive bitcoins as a reward. These problems are solved by these computers, hence they are called miners.
Those special computers are called miners from where mining is done. Bitcoin mining is the most important part of the blockchain, cryptocurrency, Bitcoin network. Because it helps track all the transactions that happen on the network and ensures that there are no second costs. Transactions on the Bitcoin network are processed only because of mining, so miners receive Bitcoin as a fee.
Bitcoin has no fixed value, but it can be exchanged for other currencies, goods, services and products, due to which its value is fixed. Bitcoin has been around since 2009 and today January 8th 2024 one Bitcoin is worth over $45,012 USD.
Bitcoin wallets are software programs or devices that act like wallets to hold bitcoins, just like we use wallets in real life to hold cards or money. A bitcoin wallet has a unique address through which bitcoins can be sent and received using the wallet. Your wallet has a private key for security (which is also very secret to access your wallet) which corresponds to the wallet address. Bitcoin wallets are divided into extensions for desktop, web, mobile apps and hardware types.
Trade in Bitcoin
Bitcoin was created as an alternative to real currency where financial transactions cannot be controlled by a third party such as an individual, organization, group, bank or government and can be conducted automatically. It is available as a reward to miners for validating transactions on the blockchain, and Bitcoins can be traded through various trading platforms such as Wazirx.
Invest in Bitcoin
Today, when it comes to investing in crypto, Bitcoin is the safest because it is less volatile than other cryptos. If crypto experts are to be believed, the next few years could see a massive rise in Bitcoin. If you want to start investing in crypto 2024 then you can do it with Bitcoin crypto, but before investing gain a good knowledge about it and be sure about its risks.
Buying bitcoins is very easy, you can easily buy bitcoins in any crypto exchange using your debit card, credit card and Bkash, Rocket, Nagad(Bangladesh) UPI(India) payment methods in exchange for Bangladesh BDT and Indian Rupees . Some of the popular crypto exchanges in the country are WazirX, ZebPay, CoinDCX etc. To buy bitcoins, you first need to create your ID on the crypto exchange, which you can do by filling in your mobile number and email. After that you have to complete KYC which asks for information like Aadhaar Card, PAN Card, Bank Account Number.
Future of Bitcoin in India
Indian government is very strict about Bitcoin or Crypto. The government currently does not see it as a digital currency or investment vehicle. Apart from this, the Reserve Bank of India is also demanding to ban it. At present, there is a provision of around 30% tax and 1% TDS on transactions in crypto. In many cases, TDS is levied up to 5%. Betting platforms like MPL are taxed at 30% on its profits. Means the government sees it as a betting platform. Which does not bode well for the future of crypto in the country.
The Government of India does not consider Bitcoin or cryptocurrency as a currency, nor is it classified as an asset. Government of India considers only Investment Certificates issued by RBI as valid. If seen this way, crypto is neither valid nor invalid.
Advantages and Disadvantages of Using Bitcoin
Bitcoin is the world’s largest financial service used for low-fee money transactions, sending money to other countries, buying NFTs, buying goods or services, and earning interest and profits.
Benefits of Bitcoin
Blockchain is said to be the world’s largest financial service. BTC is also based on this technology, due to which it can be used for online shopping, cross border remittances, tickets, hotel bookings in many countries. Here some of the main benefits:
- Impenetrable Security: It is a decentralized currency system. Which is in virtual form and all its transactions are privately verified, making it almost impossible to hack. All transaction information that takes place in it is always secured in the blockchain ledger for verification, which ensures that transactions are completed in a secure manner.
- Fast Payment System: A Bitcoin transaction takes 10 minutes to several hours to complete. But the same speed applies to sending bitcoins anywhere in the world, which is much faster than banks sending money to other countries, as banks take days to check international transactions.
- Trace Bitcoin: Bitcoin transactions can be traced just like transactions can be viewed through banking service applications. Similarly, with the help of blockchain, transactions made from Bitcoin wallets can be traced and its status can be seen.
Disadvantages of Bitcoin
Bitcoin may have thousands of advantages, but it also has many disadvantages such as its use is completely dependent on the Internet. Even today Bitcoin has undergone many developments, its transaction speed depends on mining and congestion conditions on the network. So let’s go over some of its main disadvantages:
- Bitcoin is not legal: In the country of El Salvador, Bitcoin is given the status of legal tender, that is, it can be used for anything in that country, but the use of Bitcoin is prohibited in many countries, for example, in India, it can be used to buy any goods or services. Cannot be used in many countries.
- Use of high-quality mining rigs: High-quality rigs and computer processors are used for cryptocurrency mining, which requires excessive electrical power, which is becoming a major cause of serious problems in large countries in terms of electricity consumption.
- Cannot be rolled back after transaction: In case of wrong transaction in bank account due to fraud, refund can be applied for. But this is not the case with Bitcoin, if you accidentally make a wrong transaction, you won’t even know whose name you sent Bitcoin to that person’s wallet.
The most important thing about Bitcoin is that it is a decentralized currency and it is based on blockchain technology which cannot be easily hacked. That means it is a good tool from the security and privacy point of view. Games, websites, Shop & Earn, programs like BTC Lending that give Bitcoins as rewards. There are also a lot of bitcoins available through the referral program of crypto exchanges. You can earn interest on your bitcoins through bitcoin lending programs on crypto exchange platforms. Hope you liked this article on what is bitcoin, if you like this information also share with your friends.
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