Bitcoin has been in the news the last couple of weeks, but a lot of people are still unacquainted with them. Could Bitcoin be the future of online currency? That is one among the questions, frequently asked about Bitcoin.
How Does Bitcoin Work?
Bitcoin is a kind of electronic currency (CryptoCurrency) that is autonomous from traditional banking and arrived to circulation in 2009 2009. In Tipping Token with a few of the top online traders, Bitcoin is considered as the best known digital currency that depends on computer networks to resolve complex mathematical problems, so as to verify and record the details of each transaction made.
The Bitcoin exchange rate does not depend on the central bank and there is no single authority that governs the supply of CryptoCurrency. However, the Bitcoin price depends upon the level of confidence its users have, as 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 suffer from inflation and they have a tendency to lose their purchasing power each year, as governments continue steadily to use quantative easing to stimulate the economy.
Bitcoin doesn’t suffer from low inflation, because Bitcoin mining is limited to just 21 million units. Which means the release of new Bitcoins is slowing down and the full amount will be mined out next couple of decades. Experts have predicted that the last Bitcoin will be mined by 2050.
Bitcoin has a low risk of collapse unlike traditional currencies that depend on governments. When currencies collapse, it leads to hyperinflation or the wipeout of one’s savings in an instant.
Bitcoin exchange rate is not regulated by any government and is a digital currency available worldwide.
Bitcoin is easy to transport. A billion dollars in the Bitcoin could be stored on a memory stick and placed in one’s pocket. It is so easy to transport Bitcoins in comparison to paper money.
One disadvantage of Bitcoin is its untraceable nature, as Governments and other organisations cannot trace the source of your funds and therefore can attract some unscrupulous individuals.
Making 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, which means you can purchase Bitcoin low and sell them high.
Volatility of Bitcoin
The worthiness of Bitcoin dropped in recent weeks due to 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 reported to be worth a lot more than 744,000. The incident has affected the confidence of the investors to the virtual currency.
In accordance with Bitcoin chart, the Bitcoin exchange rate went up to a lot more than $1,100 last December. That was when more people became aware of the digital currency, then the incident with Mt. Gox happened and it dropped to around $530.
In 2014, We expect exponential growth in the popularity of bitcoin around the world with both merchants and consumers,ï¿½ Stephen Pair, BitPay’s co-founder and CTO, âand anticipate seeing the largest growth in China, India, Russia and SOUTH USA.
India was already cited because the next likely popular market that Bitcoin could transfer to. Africa may possibly also benefit hugely from using BTC as a currency-of-exchange to obtain around not having a functioning central banking 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 use of Bitcoin and supporters hope that one day, the digital currency will be used by consumers because of their online shopping and other electronic deals. Major companies have already accepted payments using the virtual currency. A few 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 isn’t ready to be utilized by the mainstream due to the volatility. They also indicate the hacking of the Bitcoin exchange in the past that has resulted in the loss of several millions of dollars.