Bitcoin: A New Economy in the Making
What is Bitcoin?
Bitcoin is a cryptocurency and a digital payment network available worldwide. It works as a decentralized currency without any main repository or administrator. Transactions occur between users directly which is validated by and stored in a public distributed ledger known as a blockchain. The inventor of Bitcoin is still unknown and goes by the pseudonym Satoshi Nakamoto.
With direct transactions between users, there is no transaction cost involved. Money issued by banks that is distributed among the masses gradually dilutes into more and more taxable money. In Bitcoins, you are completely in charge of your own assets. Bitcoins can potentially resolve the currency inflation which has been a long term global problem.
How do transactions take place in a Bitcoin System?
Bitcoin is the unit currency of the Bitcoin network. Bitcoin transactions are recorded by the public ledger Blockchain. A new block is added onto the server every 10mins which records the transaction of the last 10mins. The values of these transactions are held at different public addresses with a corresponding private key. Someone who has access to this key is capable of doing Bitcoin transaction. The wallets of these users are cryptographically hidden and controlled by an unknown authority. The system of rewarding Bitcoins into one’s wallet known as mining is also prevalent.
What is the worth of a Bitcoin in the world economy?
The identity of Bitcoin as a currency may be a subject of dispute, but it covers all criteria of money and asset. As of today, the rise in Bitcoin users has increased remarkably and due to maximum demand and supply, the price value is likely to go up.
- In the merchandising business, bitcoin usage is increasing day by day. The general credit card processors impose 2-3% taxation value on money transactions as opposed to 0%-2% in case of Bitcoins. Some of the renowned companies that accept Bitcoins are Paypal, Microsoft and Dell.
- Bitcoins can be invested or kept as an asset.