Bitcoin – All You Need To Know About Bitcoin Financial System

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Bitcoin – All You Need To Know About Bitcoin Financial System
Bitcoin – All You Need To Know About Bitcoin Financial System
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Kumar Sunil

Kumar Sunil

Dreamer & Enthusiast

Creative. One word says it all for Sunil. A engineer, an enthusiastic and conscientious Information Technology consultant by profession, Sunil shares a special interest with entrepreneurship and lifestyle.

Bitcoin alias virtual money alias cryptocurrency is latest in trends.

Now, even in India, people are crazy about this currency. And, if you still don’t know what Bitcoin mining is – spare some minutes to read this.

Origin

The idea behind Bitcoin was first put forward in 1998. The idea was introducing a new form of money using cryptography to control their issuance and transactions without any reliance on central authorities. And, the first specifications and validation of the concept were published in 2009. After Satoshi left this project in 2010, the community has grown exponentially, with many programmers working at Bitcoin.

What is Bitcoin?

Unlike usual paper currency and coin, Bitcoin is a consensual network that offers a new full digital payment and payment system. It is the first decentralized peer-to-peer payment system supported by its users without a central authority or intermediaries. From a user’s point of view, Bitcoin is big money on the Internet.

Whereas, it is still a term unknown in many countries such as Japan, where Bitcoin is an officially recognized currency.

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How does Bitcoin work?

In layman terms, Bitcoin is nothing more likely a mobile phone application like Paytm that allows it users to with a personal wallet. Using the login details for that application, any signed up user can send and receive Bitcoins through it.

Is Bitcoin Safe?

To an extent, Yes. Anything that is on the internet is not one hundred percent safe. But, Bitcoin network is very advance. Before a transaction, there are a lot of security checks that ensure that things are safe like transaction validity verification, digital signatures, passwords, blockchain technology, Bitcoin mining and others.

Your bitcoin wallet has a public address, also known as your virtual identity. This public address is a combination of a long string of numbers and letters. Through this address only,

Bitcoin community members will be able to reach you for any related transaction. In addition, you also have a confidential password associated with it. And, you are supposed to keep that private for the duration you use your bitcoin wallet. Without this password, no one can access your wallet.

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What is Bitcoin mining?

Mining is an important part of the Bitcoin ecosystem because it is the activity that ensures network security.

The Bitcoin network is a distributive one. In other words, every person who contributes resources becomes a small part of a super computer.

So, if as an attacker, someone wants to breaks the chain, he is supposed to come up with more resources than the other mining contributors.

How is Bitcoin different from current financial system?

The kind of financial system we are currently using is created and supported by large-scale financial institutions such as banks, insurance companies, companies providing financial services etc. And, sometimes they take decisions that disrupt the whole thing.

The problem is that in spite of this business a long time, proper access to services has always been difficult. In the data of World Bank, 2 billion people still have no bank account.

Moreover, how are you supposed to trust a financial system that is making a hole in your pocket every time you deposit of withdrawing money.

What if I send a wrong amount using Bitcoin?

This is very important. When you are trading with Bitcoin, you need to keep this in mind that Bitcoin transactions are irreversible. So, if you made a wrong transaction, you are not going to get anything back.

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Are people really making money with Bitcoin?

This is a myth. In reality, you should never expect to make a lot of money in Bitcoin trading. Though there are people who made a lot of money, they made it after having a proper understanding of the concept. You need to be very careful, when it is about dealing with any emerging technology, especially when money is involved. In addition to the technical rules, there are a lot of economic rules as well. So, do not expect to make windfall gain over a short span of time.

A personal advice – Before you buy a Bitcoin, do not forget that this is a risky investment. And, you should not invest any money that you cannot risk. In simpler terms, do no invest your savings in Bitcoin, but the money you are not worried about losing.

How do we buy Bitcoin?

Coinbase is the name that most of the overseas countries trust for buying Bitcoin. However, this is available in countries like United States, Canada, Europe, Australia, and Singapore. Through coinbase, you can buy $150 or €150 on weekly basis. But, in India, the trusted names are Localbitcoin.com, Unocoin, Zebpay. While using unocoin, you can buy Bitcoin through NEFT, Netbanking or Payumoney. Please keep in mind that I am recommending any of these and your discretion is required.

There are a lot of advantages and disadvantages of this virtual money, and I will be discussing those in my next articles. Stay tuned.

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