It’s a concept that may be more complex than you thought: it’s not just an assigned value of money stored in a digital account, such as your bank account or line of credit. Bitcoin does not have a corresponding physical element, such as coins or paper bills. It can be used to pay electronically, if both parties wish. In this sense, it is equal to dollars, euros or yen, which are also traded numerically.
How does Bitcoin differ from traditional currency? Let’s see in a few important ways, described below;
The most important feature of Bitcoin is that its system is decentralized. It is managed by a group of volunteer coders and managed by an open network of specialized computers around the world. With Bitcoin, transaction integrity is maintained through a distributed and open network that does not belong to anyone.
2. Limited supply
A small number of new bitcoin are created every hour, and will continue to be created at a decreasing rate until they reach a maximum of 21 million. This makes Bitcoin more attractive as an asset: In theory, if demand increases and supply stays the same, the value will increase.
Although traditional electronic payment shippers are generally identified (for verification purposes and to comply with anti-money laundering legislation, etc.), Bitcoin users theoretically operate in semi-anonymity. Since there is no central “validator”, users do not need to log in when they send bitcoin to another user. When a transaction request is sent, the protocol checks all previous transactions to confirm that the sender has the necessary amount of Bitcoin and permission to send them. The system does not need to know your identity.
The smallest unit of a Bitcoin is called Satoshi. That’s one hundred millionths of bitcoin (0.00000001), at today’s prices, about a hundredth of a cent. This could facilitate micro transactions that traditional electronic money does not allow.
How are Bitcoin transactions monitored?
Bitcoin uses a very simple data log file called blockchain. Each blockchain is unique for each user and his personal Bitcoin wallet. All Bitcoin transactions are recorded and made available in a public register, which helps to guarantee their authenticity and prevent fraud. This process avoids duplicate transactions and people copy Bitcoin.
What is Bitcoin mining?
Bitcoin mining refers to the process by which new Bitcoins are created by computers that help maintain the network. The computers involved in Bitcoin mining are in a sort of computer race to deal with new transactions entering the network. The winner, usually the person with the fastest computers, receives some of the new Bitcoins. Each existing bitcoin was created by this method and was initially granted to a computer that helped maintain these records. Anyone can set up their computer to mine Bitcoins, but nowadays only people with specialized hardware can win the race.
Is it worth investing in bitcoin mining?
The Bitcoin mining industry has grown rapidly. Mining, which at one time could be done using a common computer, is now profitable only in specialized data centers. These data centers are warehouses filled with computers called ASICs created for the sole purpose of mining Bitcoin. Today, the cost can come up to millions of dollars to start a profitable mining. Bitcoin mining is no longer a profitable investment for new users.
What can I do with my Bitcoins?
Once you have Bitcoins, they are like physical gold coins: They are valuable and traded as if they were gold nuggets in your pocket. You can use Bitcoin as an investment, buying the cryptocurrency in order to gain a profit from the fluctuation of its price. You can also see it simply as a new way to spend money. The number of places where you can spend your Bitcoins is increasing every day.
The price of Bitcoin is based on what people are willing to pay. The price of Bitcoin is usually indicated as the cost of an entire bitcoin. However, trading will allow you to buy any amount, and you can buy less than one bitcoin. The Libertex price index is a good resource to see the Bitcoin price in real time.
What is the right moment to buy?
Bitcoin is global and is not affected by the stability or financial situation of any country. For example, speculation about the devaluation of the Chinese Yuan has led to increased demand in the past from China, which has also increased the exchange rate in US and European-based exchanges. Global chaos is generally considered beneficial for the price of Bitcoin, as Bitcoin is apolitical and beyond the control or influence of any government. When thinking about how the economy and politics affect the price of Bitcoin, it is important to think globally, not just what happens in one country?
What is Bitcoin Trading?
You can sell and buy Bitcoins not only with trust currencies, such as the USD or the Euro, but also by exchanging Bitcoin for other crypto-currencies, generating profits because of the difference in your costs. It is a way to get involved in the world of cryptocurrencies without having to undermine them.
Conclusion; Bitcoin and crypto-currencies are generally one of the most attractive assets of the moment. On the other hand, as we have seen, investing directly in Bitcoins involves risks of all kinds. Investing your money with Libertex is totally safe because through our platform, you simply bet on the rise or fall in the price of cryptocurrency, without directly buying Bitcoins or making transactions with intermediaries.