One of the most sought-after and valuable crypto currencies, Bitcoin has grown into something which is a desirable and the hottest asset in global finance. Till November 2021, the consolidated worth of bitcoins was beyond 1 trillion! This is surprisingly huge as this is even beyond the market capitalizations of a few of the biggest organizations like even Facebook or Tesla!
Bitcoin does not represent a share of a company but a digital currency unit and the value of which can fluctuate widely! The bitcoin investing has taken payment methods to another level.
In a nut-shell
It is nothing but decentralized cash that can eliminate the need for any banking organizations or other government bodies to deal with the basic operations. It rather relies on a peer-to-peer computer network to get the customer purchases confirmed. It can be considered as one of the most stable and less volatile digital currencies as well. It’s surprising to know that the overall price of a Bit-coin has grown multifold. If we talk about the evolution history of Bitcoin, it was priced at $1 in 2011 and by the end of 2020, the price touched a whopping $65000!
Basic Functioning
When an investor invests in bitcoin, all the transactional records get stored in either a digital wallet,smartphone or a computer.
The technology which creates a solid backbone for it is nothing but Blockchain. With the help of Blockchain technology, it gets a permanent record created for each transaction made through a shared public ledger of transactions. This process is quite transparent in nature.
Keys
One of the important aspects here is that a bitcoin wallet includes a public and private key. Both the keys work together through the inception, digitally signed transaction process, and also in creating the authorization proof.
Miners
Miners which are also members of peer-to-peer technology are used to confirm the transaction process with the use of high-speed systems. These Bitcoin Miners are also known as nodes. They are the owners of the high-speed systems which independently facilitates the confirmation process of all the transactions made.
The Money-making process
The Bit-coin Value depends on the supply-demand process to a huge extent. Most people buy Bit-coin with the hope that the future value will increase compared to what it is today! However, it’s really difficult to predict anything in this regard. However, Mining Bit-coin requires a lot of expertise technically and also a good amount of investment in high-performing computer systems.
Types of Bitcoin Wallets
When it comes to bitcoin wallets, they are mainly of twokinds, such as Hot Wallet & Cold Wallet.
Hot Wallets are nothing but a cloud-based place where you can keep Bitcoins. This place can be accessed through a browser, or any desktop or a smartphone app. On the opposite, the cold wallets are like encrypted portable devices that can allow you to carry or download your assets i.e. Bitcoins.
Important Considerations That You Should Know About
- Fluctuation of market price
It’s surprising to know that the overall price of a Bit-coin has grown multifold. It was priced $1 in 2011 and by 2021 fall, the price touched a whopping $65000! The Bit-coin Value depends on the supply-demand process to a huge extent. Most people buy Bit-coin with the hope that the future value will increase compared to what it is today! However, it’s really difficult to predict anything in this regard.
- Security Concerns
There have been security concerns related to digital wallets as there have been cases of fraudulent activities in the past. However, with several government initiatives and security measurements, the chances of hacking or any fraudulent activities have lessened to a huge extent.
- Privacy protected and secured transactions
If you are an investor in bitcoin, you can transfer them anytime and from anywhere. This way, you never have to bear any transaction-related expensesNot only, if we talk about the best part about these transactions, here your personal or other sensitive information such as credit card number or passwords never get stored anywhere.
Final Words
In short, BitCoins as part of Cryptocurrency have opened up a new horizon in the financial field. This is something that will only grow big in the times to come.
