Everything that you need to know about Bitcoin
Economic and Finance are two very complicated things that not everyone can understand. But since the online technology has evolved and became very popular, the world of economy and finance seems to be even more complicated. We are here referring to the existence of bitcoin which has already started to emerge internationally since 2009. If you are not that familiar with the term, we are to help you understand what constitutes as bitcoin. You might want to know what it is because it has become such an important issue in the contemporary world news that it might be useful one day for you.
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The Definition of Bitcoin
Now you must be wondering what it exactly a bit coin and how do you manage to generate and use it? Well, there is no simple explanation regarding this new form of money. But In the most comprehendible and simplest definition, we can say that bitcoin is a digital form of money. Some people would also call it as internet money because it is a form of currency that is used among internet users. Another name for bitcoin is also crypto currency which means that it is a form of exchange that operates without any official or governmental backing. |
Because it has nothing to do with any country, the transaction can be done by so many people all over the world. Lots of people use it for different kinds of uses such as buying illegal stuffs in the black market or the likes. We have seen in the news that bitcoins can make people really rich. It means that bitcoin can be functional as real money outside internet. The exchange rate between bitcoin and USD itself is pretty unstable, with the current rate revolving around two hundred dollars.
Who or What Generates Bitcoin?
It is such a confusing concept that money is not tied to a certain country or government. For regular money, a national bank would print and issue a certain amount of money and distribute it to the people. But for bitcoin, there is no such thing because it is free money. Instead of relying on a central operator, bit coin is created through a process called mining.Mining is a complex process where bitcoin is produced from. To put it simply, the act of mining happen when someone is installing and operating bitcoin software.
Who or What Generates Bitcoin?
It is such a confusing concept that money is not tied to a certain country or government. For regular money, a national bank would print and issue a certain amount of money and distribute it to the people. But for bitcoin, there is no such thing because it is free money. Instead of relying on a central operator, bit coin is created through a process called mining.Mining is a complex process where bitcoin is produced from. To put it simply, the act of mining happen when someone is installing and operating bitcoin software.
When the bitcoin software is being generated, it creates something that is called a block chain. And this block chain is what generates the bitcoin publicly because it acts as a public record of transaction between bitcoin users. The block chain itself is a set of complex mathematical problem that the user will try to solve in order to gain more bitcoin. And yes, when the user has successfully solved the math problems, they will be rewarded with the amazing bitcoin. The production of bitcoin is usually in the form of gradual production, which means there are several cluster with less and less amount of bitcoin being produced. In one production, there will be a limitation to which the bitcoin is being produced. When the bitcoin production will reach twenty one million, then the production will terminate immediately and automatically and it is ready to be used in a transaction.
Acquiring Bitcoin
In order to get bitcoins, you need to understand that you can just purchase them online. But purchasing bitcoins itself is not as simple as it sounds because it requires several pre-steps as requirements to acquire the bitcoins. The first thing that you need to do before you buy a bitcoins owns a bitcoin wallet. The term wallet itself is not quite literal as it is more like a stockbroker rather than an actual wallet. You must choose a certain broker or a wallet in order to store all of the bitcoin that you want. Choosing a reliable broker or a wallet is very important because you don’t want to trust your money on someone that might lose it. To make matter even worse, there are way too many wallet or bitcoins broker out there so it is not that easy to pick just one.
Acquiring Bitcoin
In order to get bitcoins, you need to understand that you can just purchase them online. But purchasing bitcoins itself is not as simple as it sounds because it requires several pre-steps as requirements to acquire the bitcoins. The first thing that you need to do before you buy a bitcoins owns a bitcoin wallet. The term wallet itself is not quite literal as it is more like a stockbroker rather than an actual wallet. You must choose a certain broker or a wallet in order to store all of the bitcoin that you want. Choosing a reliable broker or a wallet is very important because you don’t want to trust your money on someone that might lose it. To make matter even worse, there are way too many wallet or bitcoins broker out there so it is not that easy to pick just one.
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The most well-known and probably the oldest wallet or bitcoin broker are called the Bitstamp. Bitstamp is probably the biggest online site where people come and go to sell and buy bitcoins. This place is like the Wall Street stock exchange only for bitcoins and its users. Despite being the biggest and the oldest, it might not be the most reliable. But then again, the whole bitcoin transaction itself will never be reliable therefore what’s the difference with the stock exchange. But if you want to try different kinds of bitcoin broker, you can always try several of them such as the VirtEx, Bitcurex and also BTC China.
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Using the bitcoins online
Because bitcoins itself is such a new and modern concept even in this age of modern technology, there are still few merchant or stores that is willing to accept bitcoins. Even so, the existence of that kind of stores is definitely growing stronger every day. For instance, a particular store named the Overstock.com is the biggest store which accepts payments using bitcoin itself. You can now use bitcoin to pay for practically everything. You can purchase luxurious stuff like a mansion, airplane ticket, a car, food, and so many other things using bitcoins.
Because bitcoins itself is such a new and modern concept even in this age of modern technology, there are still few merchant or stores that is willing to accept bitcoins. Even so, the existence of that kind of stores is definitely growing stronger every day. For instance, a particular store named the Overstock.com is the biggest store which accepts payments using bitcoin itself. You can now use bitcoin to pay for practically everything. You can purchase luxurious stuff like a mansion, airplane ticket, a car, food, and so many other things using bitcoins.
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Other than using bitcoins to purchase things such as the ones being mentioned above, you can even turn it into actual money. There are bitcoins ATMs out there which will accept your bitcoins and they will exchange it with actual money. These ATMs can be found with an app called Coin map. This coin map will show you all the nearest atms surrounding you, because there are not that many yet out there. And unlike using a credit card or a PayPal, they don’t charge you that high. In fact, their charging rate is really low.
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The advantage and benefits of using bitcoins
When it comes to using bitcoins, there are plenty of positive sides from it that you can gain. For a starter, we already mentioned it that the charge for the bitcoin transaction is very small. Sometimes you don’t even have to use charge at all which means the transaction is free at times. Of course the more charge that you put in the transaction, the faster it will be done. So if you really want to make such a quick transaction, you can put an extra bitcoins in there.
Another advantage in using compared to using bitcoin is the fact that you are in total control of the transaction. With banks, sometimes you have to follow the operation time of the bank system. But bitcoins are highly flexible in the delivery because it is not bound by any border or territorial limitation. Plus, because there is no operation time, you can send or accept bitcoins at any given moment. As long as the two parties in different area are awakened, then you can do the transaction even if you are in the middle of the night.
You can also enjoy the high security and transparency when transacting with bitcoins. You can definitely use it to avoid any scam or being conned because all the important information will be presented in the block for everybody to see. You can even see the address of the user because it is one of the information details that are being shown in the block chain. The transparency of the transaction is definitely helping you because no one can lie about the amount of transaction being done since you can see it from your own side of computer.
The use of bitcoins is also very much beneficial for the store owner or simply called the merchants. Since the transparency of the transaction is very apparent, you can be sure that the merchant will always be protected by the system. There is no way to con the merchant because you will see all the transaction sends to the merchant. As a seller, bitcoin system is also very beneficial in a way that it is borderless. It also means that merchant can sell their products or items practically everywhere in the world. So not only they have more territorial base, they also add more potential customers.
And finally, the last benefit of using bitcoins is the high level of security which it entails. The security that we are talking about is referring to personal information of the user. You might see the important information such as address and where they live, but the personal details won’t be shown at all. In that way, there is no way for people to “catfish” other people using bitcoin system. In addition to that, since bitcoins is a digital form of money, you can back it up so that you can secure your finance when things happen to your money.
The Disadvantages of using Bitcoins
Unfortunately, it is not all rainbow and daisy when it comes to using bitcoins. There are several problems that come with bitcoins whether you are a consumer or a seller. For an example, the first issue with using bitcoins is the fact that the fluctuation of the exchange rate is rather unstable. Because of that, the overall cost or pricing of bitcoins is unpredictable and it is not good for any business. Just like regular money, unstable money value will always hurt your overall financial condition.
The main contra point of using bitcoins is also the fact that there are not that many amounts of the coins out there. And since the total of people who are using bitcoins is increasing day by day, that fact will certainly become a problem. What if the coin is lacking unparalleled with the overall amount of people who are using bitcoins? Certainlythese problems can be fixed immediately especially knowing that more and more sellers or vendors are willing to utilize bitcoins as a form of payment. This will force the system to eventually produce more bitcoins in the future.
That problem above brings us to the next contra point of Bitcoins, which is the fact that there are not that many people who uses and understands the concept of bitcoins. Because of the lack of people who knows what bitcoins is, the aspiration for it to become a widely acceptable form of payment is kind of dwindling. There need to be a proper education about bitcoins to people so that people are at least aware about bitcoins and how to use them in real life. By doing so, there will be more and more people who can use and justify the use of bitcoins in daily life.
When it comes to using bitcoins, there are plenty of positive sides from it that you can gain. For a starter, we already mentioned it that the charge for the bitcoin transaction is very small. Sometimes you don’t even have to use charge at all which means the transaction is free at times. Of course the more charge that you put in the transaction, the faster it will be done. So if you really want to make such a quick transaction, you can put an extra bitcoins in there.
Another advantage in using compared to using bitcoin is the fact that you are in total control of the transaction. With banks, sometimes you have to follow the operation time of the bank system. But bitcoins are highly flexible in the delivery because it is not bound by any border or territorial limitation. Plus, because there is no operation time, you can send or accept bitcoins at any given moment. As long as the two parties in different area are awakened, then you can do the transaction even if you are in the middle of the night.
You can also enjoy the high security and transparency when transacting with bitcoins. You can definitely use it to avoid any scam or being conned because all the important information will be presented in the block for everybody to see. You can even see the address of the user because it is one of the information details that are being shown in the block chain. The transparency of the transaction is definitely helping you because no one can lie about the amount of transaction being done since you can see it from your own side of computer.
The use of bitcoins is also very much beneficial for the store owner or simply called the merchants. Since the transparency of the transaction is very apparent, you can be sure that the merchant will always be protected by the system. There is no way to con the merchant because you will see all the transaction sends to the merchant. As a seller, bitcoin system is also very beneficial in a way that it is borderless. It also means that merchant can sell their products or items practically everywhere in the world. So not only they have more territorial base, they also add more potential customers.
And finally, the last benefit of using bitcoins is the high level of security which it entails. The security that we are talking about is referring to personal information of the user. You might see the important information such as address and where they live, but the personal details won’t be shown at all. In that way, there is no way for people to “catfish” other people using bitcoin system. In addition to that, since bitcoins is a digital form of money, you can back it up so that you can secure your finance when things happen to your money.
The Disadvantages of using Bitcoins
Unfortunately, it is not all rainbow and daisy when it comes to using bitcoins. There are several problems that come with bitcoins whether you are a consumer or a seller. For an example, the first issue with using bitcoins is the fact that the fluctuation of the exchange rate is rather unstable. Because of that, the overall cost or pricing of bitcoins is unpredictable and it is not good for any business. Just like regular money, unstable money value will always hurt your overall financial condition.
The main contra point of using bitcoins is also the fact that there are not that many amounts of the coins out there. And since the total of people who are using bitcoins is increasing day by day, that fact will certainly become a problem. What if the coin is lacking unparalleled with the overall amount of people who are using bitcoins? Certainlythese problems can be fixed immediately especially knowing that more and more sellers or vendors are willing to utilize bitcoins as a form of payment. This will force the system to eventually produce more bitcoins in the future.
That problem above brings us to the next contra point of Bitcoins, which is the fact that there are not that many people who uses and understands the concept of bitcoins. Because of the lack of people who knows what bitcoins is, the aspiration for it to become a widely acceptable form of payment is kind of dwindling. There need to be a proper education about bitcoins to people so that people are at least aware about bitcoins and how to use them in real life. By doing so, there will be more and more people who can use and justify the use of bitcoins in daily life.
And if there are more and more people who are using bitcoins, this will lead to more and more companies and businesses which will accept bitcoins. The lack of stores who are willing to accept bitcoins as a form of payment is clearly another downside of bitcoins. Clearly we cannot buy that much of a thing or things that we really want because not everything is available in the store that is willing to take bitcoins like now. Until more stores are opened to bitcoins, we just have to stick with the small amount of companies that we have now.
And finally, the main contra point about using bitcoins is the fact that it was started to be launched only in the 2009. It means that this system is very young and not fully developed yet. That is why there are so many issues such as security problems and others that can only be overcome with experience and more time. But that fact doesn’t mean that we should not use bitcoins at all, because we are sure that it is being developed as we speak. We just have to put our attention to the system careful in order to protect ourselves from unwanted things.
And finally, the main contra point about using bitcoins is the fact that it was started to be launched only in the 2009. It means that this system is very young and not fully developed yet. That is why there are so many issues such as security problems and others that can only be overcome with experience and more time. But that fact doesn’t mean that we should not use bitcoins at all, because we are sure that it is being developed as we speak. We just have to put our attention to the system careful in order to protect ourselves from unwanted things.
