Bitcoin is known as the revolution in the world of currency, this technology has the potential to replace banks, currencies, governments and gold.
What is bitcoin?
This is a network of digital currency known as bitcoins, which can be exchange for goods and services electronically. However, unlike other currencies, this is not created or maintained by a central government.
Who controls it and who decides the price?
There is no central bank, government, institution or company that controls the currency. This is the reason, the currency is known as “Decentralised”. These are created independent of any government, and they remain to be independent.
It’s value entirely depends on the market for it. It has seen incredible heights and also experienced the steep price shocks.
Medium for Transaction
The main purpose of it’s creations was to use it as a transactional medium. It takes the place of the traditional currency and can be stored in a digital wallet. It can be transferred to another wallet anywhere in the world, to pay for goods and services.
The funds of bitcoin are not tied to the real world entities, so these are called as pseudonymous. The owners of these currencies are related through bitcoin addresses.
Accepted by Merchants
The acceptance of this currency by merchants around the world is increasing day by day. Without maintaining a constant value, these funds either benefit or hurt the company. These ups and downs of inflation can be an advantage to the business, unless there is an insanely high value for the coins.
Reasons why bitcoin became popular:
- A single block is added to blockchain every ten minutes. So the count of blocks per day are fixed.
- These coins can be parted into lower denomination called satoshis, where 100000000 satoshis = 1 Bitcoin.
- These coins can be exchanged with no limitation of any boundary, this process resembles the way how internet behaves.
There are both pros and cons about bitcoin. Some people see it as a medium to make quick money as it’s value does not seem to be constant. While, others see it as an entirely new economic model.