As humans, we always have this question. Why all the money don’t have the same values?

1 dollar is equal to 73.57 Indian Rupee, 0.86 Euro, 105.39 Japanese Yen and it changes every day.

What if one currency has the same value all over the world and that too in the digital form?

What is cryptocurrency?

A cryptocurrency is a digital form of currency which doesn’t exist physically (like in paper or coins). It’s an electronic currency or a digital asset which can be used only through online.

There are different types of cryptocurrency Litecoin, Ethereum, BAT – Basic Attention Token, NEM and so on. But the most common cryptocurrency which is accepted by some countries like Japan, Singapore, France, etc. are bitcoins.

What are bitcoins?

Bitcoins is also a form of cryptocurrency which can be used only for online transactions. It is a decentralised currency (means they don’t have any specific owners to influence, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group).

This is the main advantage of bitcoins. No one can suddenly demonetize this currency.

Each Bitcoin is basically a computer file which is stored in a ‘digital wallet app‘ on a smartphone or computer.

People can send Bitcoins to others digital wallets, and they can receive Bitcoins from other people. Every single transaction is recorded in a public list called the blockchain.

How are bitcoins introduced?

Bitcoin is a digital currency created in January 2009 following the housing market crash. It follows the ideas set out in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto. On Jan 2009, he proposed what are bitcoins, how to generate bitcoins and so on.

Why were bitcoins created?

Satoshi Nakamoto wanted to create a “trust-less” cash system. He explicitly stated that the reason for creating this digital cash system is to remove the third-party intermediaries that are traditionally required to conduct digital monetary transfers.

Value of a bitcoin

The value of 1 Bitcoin is equals to 10,283.30 United States Dollar,
8,828.01 Euro, 7,60,321.49 Indian Rupee and 10,82,656.67 Japanese Yen.

How to get bitcoins?

There are 2 methods in which you can get bitcoins. They are

  1. Quickly purchase a substantial amount of bitcoins on the internet or in person. There are many free sites like unicoin, buyucoin, zebpay, consecure etc to purchase it.
  2. Slowly earn a substantial amount of bitcoins for free through bitcoin faucets, like playing mobile or online games, completing tasks on websites, or writing about cryptocurrency. The second method is called mining. But mining is not simple.

How are bitcoins generated?

How does our normal money come?

Most of the money in our economy is created by banks, in the form of bank deposits – the numbers that appear in your account. Banks create new money whenever they make loans.

New bitcoins are generated by a competitive and decentralized process called “mining”. This process involves that individuals are rewarded by the network for their services.

Bitcoin miners are processing transactions and securing the network using specialized hardware (like supercomputers, more CPU’s high storage RAM, graphics cards etc….) and are collecting new bitcoins in exchange.

Each time a miner successfully solves Bitcoin’s proof of work algorithm that miner mined a “block”. The miner or mining pool that mines a block is rewarded through the block reward, a set amount of bitcoins agreed upon by the network. This is the only way that new bitcoins are created.

How to solve a block?

To solve a block, miners modify non-transaction data in the current block such that their hash result begins with a certain number (according to the current Difficulty, covered below) of zeroes. If you manually modify the string until you get a 0 result, you’ll soon see why this is considered “Proof of Work!”

To be added to the blockchain, each block must contain the answer to a complex mathematical problem created using an irreversible cryptographic hash function. The only way to solve such a mathematical problem is to guess random numbers that, combined with the previous block content, generate a defined result.

Can we convert bitcoins to real money?

There are several ways to convert bitcoin to cash and ultimately move it to a bank account:

Sell bitcoin on a cryptocurrency exchange, such as Coinbase or Kraken. This is the easiest method if you want to sell bitcoin and withdraw the resulting cash directly to a bank account. Deposit BTC into your account.

How many bitcoins can be generated?

Bitcoin is unique in that only 21 million bitcoins will ever be created. Even though 18.4 million Bitcoin were mined in just over 10 years, it will take another 120 years to mine the remaining 2.6 million. That’s because of the Bitcoin halving.

Advantage of bitcoins

  • Lower fraud risk for buyers
  • No risk of inflation, individual can preserve of coins
  • Low transaction fees
  • Easy to use in any situation
  • No third party involvement hence demonetization is not possible.
  • Quick payment
  • Safer ecosystem
  • International payment made easy

Disadvantages of bitcoins

  • Not available in physical form
  • No valuation Guarantee, valuation fluctuates
  • Built in deflation
  • Risk of technical flaws
  • No buyer protection
  • Wallets can be lost
  • It is not widely accepted

Is that safe to inverse in bitcoins?

Bitcoin investment is a gold rush across the globe. Whether it’s a greatest inversement or just a passing Storm still remains a mystery.

Bitcoins price has reached peaks and also met some serious falls but retained a portion in the economy.

Inverting in bitcoins is as risky as inverting in the stock market.

Where to invest bitcoins?

You can use an online broker to invest in bitcoin. It is far more volatile because of the daily swings in bitcoin. Here are the steps to invest in bitcoin:

  1. Open a brokerage account with a company that allows crypto investments.
  2. Deposit funds into your brokerage account.
  3. Buy BTC.
  4. Later sell the crypto for a gain or loss.
  5. These steps, however, depend on the exchange or trading platform you’re using.

This article is a little complicated one. Read this slowly so that you can understand better.
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Student of Panimalar Institute of Technology

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