Bitcoin has been in the news the last couple of weeks, but a lot of people are still unaware of them. Could Bitcoin be the future of online currency? That is just one of the questions, frequently asked about Bitcoin.
How Does Bitcoin Work?
Bitcoin is a kind of electronic currency (CryptoCurrency) that’s autonomous from traditional banking and came into circulation in 2009 2009. In accordance with a number of the top online traders, Bitcoin is considered as the best known digital currency that relies on computer networks to solve complex mathematical problems, so as to verify and record the facts of each transaction made.
The Bitcoin exchange rate will not be determined by the central bank and there is absolutely no single authority that governs the way to obtain CryptoCurrency. However, the Bitcoin price depends upon the level of confidence its users have, because the more major companies accept Bitcoin as a way of payment, the more lucrative Bitcoin will become.
Benefits and Risks of Bitcoin
One of the benefits of Bitcoin is its low inflation risk. Traditional currencies have problems with inflation and they have a tendency to lose their purchasing power each year, as governments continue to use quantative easing to stimulate the economy.
Bitcoin doesn’t suffer from low inflation, because Bitcoin mining is bound to just 21 million units. Which means the release of new Bitcoins is slowing and the full amount will undoubtedly be mined out within the next couple of decades. Experts have predicted that the last Bitcoin will undoubtedly be mined by 2050.
Bitcoin has a low risk of collapse unlike traditional currencies that rely on governments. When currencies collapse, it leads to hyperinflation or the wipeout of your respective savings in an instant.
Bitcoin exchange rate isn’t regulated by any government and is a digital currency available worldwide.
Bitcoin is easy to transport. A billion dollars in the Bitcoin can be stored on a memory stick and placed in one’s pocket. It is that simple to transport Bitcoins in comparison to paper money.
One disadvantage of Bitcoin is its untraceable nature, as Governments and other organisations cannot trace the foundation of your funds and as such can attract some unscrupulous individuals.
Steps to make Money with Bitcoin
Unlike other currencies, there are three ways to make money with Bitcoin, saving, trading and mining. Bitcoin could be traded on open markets, therefore you can purchase Bitcoin low and sell them high.
Volatility of Bitcoin
The value of Bitcoin dropped in recent weeks due to the abrupt stoppage of trading in Mt. Gox, that is the largest Bitcoin exchange on the globe. According to unverified sources, trading was stopped because of malleability-related theft that was said to be worth more than 744,000. The incident has affected the confidence of the investors to the virtual currency.
According to Bitcoin chart, the Bitcoin exchange rate went up to a lot more than $1,100 last December. That has been when more people became aware of the digital currency, then the incident with Mt. Gox happened also it dropped to around $530.
In 2014, We expect exponential growth in the popularity of bitcoin around the globe with both merchants and consumers,ï¿½ Stephen Pair, BitPay’s co-founder and CTO, âand anticipate seeing the biggest growth in China, India, Russia and SOUTH USA.
India has already been cited as the next likely popular market that Bitcoin could transfer to. Africa could also benefit hugely from using BTC as a currency-of-exchange to get around not having a functioning central bank system or any other country that relies heavily on mobile payments. Bitcoin’s expansion in 2014 will undoubtedly be led by Bitcoin ATMs, mobile apps and tools.
World Experiences Bitcoin
More people have accepted the utilization of Bitcoin and supporters hope that one day, the digital currency will undoubtedly be used by consumers for their online shopping and other electronic deals. Major companies have previously accepted payments utilizing the virtual currency. Some of the large firms include Fiverr, TigerDirect and Zynga, among others.
The Future of Bitcoin
Bitcoin works, but critics have said that the digital currency is not ready to be used by the mainstream due to the volatility. They also indicate the hacking of the Bitcoin exchange previously that has resulted in the increased loss of several millions of dollars.