Crypto currency has taken over a huge part in the news daily since it was inception in 2009. While many of us understand the whole term and the technicalities associated, there is a part which does not. Moreover, with the media in a frenzy, there are numerous questions like
- What are bitcoin and blockchain?
- Why is it in the news so much?
- How can I buy it?
- Is it safe?
Most of the write-ups are from technocrats who are dealing under the business or are closely associated to it which makes the language a jargon for the general masses (like us) to understand the meaning of this term. If you are one of them, this is the article for you. Under this, definitions and concepts have been explained in a simpleton language.
- Let’s begin: What is Block Chain
In order to have an in-depth understanding of bitcoins, we need to understand the terminology BlockChain. Blockchain is a digitally tamper-proof, encrypted database that acts as an accounting ledger keeping track of digital assets. It is secured by cryptography. Instead of being managed by a single centralised server, it is maintained by a distributed set of systems around the globe. This database tracks every transaction concerning the bitcoin since its inception.
- Who maintains the data?
The database is created by miners: businesses or individuals who have computers which are specialised to aid in the transactions. They contribute their electricity and power. In return, they get paid in the form of transaction, fees or new bitcoins that are newly developed.
- What is Bitcoin?
It is a type of digital currency that can be exchanged on the blockchain. Another question that arises here is “What is a cryptocurrency?” Cryptocurrency is another type of digital currency that uses blockchain for transactions. Today, it’s treated more like a commodity, but in some countries, it has been started to be used as currency in certain transactions like Uber.
- Bitcoins: When did it all start?
Bitcoin came into existence to revamp the financial system and give it another outlook, all together. Satoshi Nakamoto ( man or woman, individual or group- yet not deciphered) is credited with the invention of bitcoin in the year 2009. Bitcoin emerged as the most successful of the cryptocurrencies.
It is assumed that the purpose behind which cryptocurrencies was to democratize the process of the transaction and cutting off the role of intermediaries. However, with the passage of time, the motive and the purpose digressed from democratizing the process of using the bitcoin for illegal purposes like buying illegal commodities.
- What purpose does it solve?
Crypto currency is used for many purposes; some of them are listed below:
- Remittances
In this globally connected world, sending money overseas is not uncommon. However, sending and receiving money overseas is exorbitantly expensive; this is where Crypto currency sets in and make our task easier. The remittance fee while using bitcoin is relatively cheap.
- Exchange Rate Protection
Transferring money to foreign countries takes a considerable amount of time during which the value of the currency might increase or decrease; however, it’s almost always the negative end of the spectrum. However, using a bitcoin overcomes this problem as the transaction here takes place within a fraction of second in real time.
- New Currency
Using a bitcoin has also given us a new currency which is widely accepted in various spheres of life. However, not many countries have accepted bitcoin as their currency
- Where can we get a bitcoin?
Want to buy a bitcoin but the process too taxing? Here are some of the sources you can get a bitcoin from.
- Kraken
- Poloniex
- Bitstamp
- CoinMama
- Bitcoin Circuit
These are just a few of exchanges. There must be more; however, all follow certain restrictions. Therefore, make an informed decision and choose wisely where you want to get your bitcoin from.
- But can you stay assured of the safety?
All that is available online is susceptible to hackers. Similarly, bitcoins can be stolen too. However, with the problem comes solutions, you can always protect your bitcoin from getting stolen. The key is to store the bitcoin offline in your wallet, or you can also go to Bitcoin circuit.