Is Now the Right Time to Invest in Bitcoin?Hey guys, What’s going on?I am back with another interesting article, Which is related to cryptocurrency. By the end of the year 2017, Bitcoin prices soared to an all-time high value of around $20,000.While every bitcoin investor cheered for this, soon the prices plummeted and all the claims of it being a fraud and myth started to appear true and then started the unfriendly journey of bitcoin with various governments, banks and investment houses.
In this article I will explain the details of this crypto-currency in layman’s terms i.e., what it is, how it works and why popular investment gurus and large investment houses were sceptical about it even before it shook the investment market.
In simple terms, crypto-currencies are like digital or virtual cash stored in online wallets. These are generated by computer codes by ‘miners’, who manage the whole crypto-currency network. As these are generated by miners, they have no issuing agency backed by national governments. So instead of a mint, they are created in mines. The most popular crypto-currencies are Bitcoin, Ether, Ripple etc.
What is bitcoin?
Bitcoin is the oldest and most popular virtual currency and its network. It is similar to real currency to the extent that it can be used to make any form of transaction, investments or can be traded in the market, provided it’s acceptable to each party. It’s very much like money you see in virtual games, which lacks any physical form but can be used in real world. Also, they are not bound by international or country regulations, it is quite easy to make transactions. One can buy bitcoins from the “bitcoin exchanges”, and thereafter they are stored in online wallets in the user’s computer or in the cloud.
Users can make or receive payments or can save their money.The functioning of bitcoins network is operated and managed by ‘miners’, who confirm the transactions.All the waiting transactions are included in block chains in a chronological order. A block is a pack of transactions which is encrypted with strict rules that are verified by the network. These rules enable the blocks to store permanent transactions which cannot be modified. Each block is connected to its previous block and so they form a block-chain.As for mining, it is a competition where people compete to ‘mine’ bitcoins using computers to solve various complex mathematical puzzles. To confirm the transactions miners strive to solve the math puzzle of the respective block and in return, they mine bitcoins for themselves. This is how new bitcoins are created.
The most lucrative feature of bitcoin network is anonymity of the users. Although each and every transaction gets recorded permanently, the real identities of the users are never revealed. Instead, each user is assigned with a wallet I-D by which they are identified. But it has had also become a safe house for tax evaders and money launderers. Another serious concern which has come to the front is of hacking -bitcoins of millions of dollars were stolen from Bitfinex in 2016. Apart from that, there is no way to protect your coins technical faults like malware, hard drive failures and human error.The future of bitcoin is under suspicion as it is an unregulated currency. Besides many countries are banning investments or terming them illegal. Major virtual currency markets like South Korea and China have made their moves in this direction. In other countries like India, Russia and Sweden among others bitcoin are banned in practice, although legally it has not been confirmed.