A safer medium of exchange – Bitcoin
Created in 2009 by Satoshi Nakomoto, Bitcoin is an alternative for currency. Most important thing about it is that you can anonymously transact using bitcoin. If you are doing business with the coin, you would not need to give out your name. You can remain anonymous and still make your transactions only with a wallet id. This is also a reason Bitcoin is a favorite of people engaged in illegal trade. As an alternative to currency, Bitcoin is unregulated.
The only regulation put in place is that of an upper limit of 21 million. Otherwise there is no other control or regulation as the other currencies. Anonymous transactions cannot be traced back. Another important benefit – need for the middle men or banks is eliminated and so no transaction fees. These benefits have led to the high value of bitcon. This value had risen past $1000 in 2013 but again fell. Now, it is valued at $929. The value of the currency keeps fluctuating, still it has mostly proved profitable for the buyers. The volatility in 2016 was mainly due to Brexit and the uncertainty surrounding it.
The acceptance of Bitcoins in the market has also risen and more merchants and sites are accepting them. You can buy products and services online using it. Since Bitcoins are not subject to national regulations, it is easier to make international transactions with them. The elimination of transaction fees makes it cheaper to transact with them. They can be good for the small businesses for there are no transaction fees or credit card fees.
The value of Bitcoin is a major factor that has made it attractive in the eyes of investors. Many of them have invested with the hope that their value will continue to rise. The availability of Bitcoins is limited by setting an upper limit of 21 Million. Its transactions are anonymous but a public log of the transactions is kept. This task is performed with the help of Bitcoin miners who help keep the network secure.
These miners add records of past transactions to the public ledger and are served with Bitcoins in exchange. This ledger is known as block chain. Mining is also helps keep the system secure and disseminate new coins. Bitcoins are stored in a digital wallet either in the clouds or on your computer. However, both practices are risky. The cloud servers can be hacked or companies storing them can flee with your precious coins.
Even on your own computer you can delete them by mistake or they can be destroyed by virus attack. One very important purpose that Bitcoin serves is that of keeping your transactions anonymous. It is also why the coin is considered a better exchange medium than Gold. Currently, the Bitcoins are unregulated. It is also why their future is uncertain. Tomorrow, if somehow they are regulated, their value might drop absurdly leading to losses for the investors. So, the future of Bitcoin is questionable but given its past performance, buyers are still excited.