what is bitcoin

What is bitcoin

There is a lot of confusion surrounding bitcoin. What is bitcoin.

I feel there is a need to separate it into two components.
On one one hand, we have bitcoin-the-token which is a snippet of code that
represents ownership of a digital concept . It is like virtual money.
On the other hand, we have bitcoin-the-protocol. A distributed network that
maintains a ledger of balances of the virtual money. Bring both hands together and you have a “bitcoin”.

The system enables payments to be sent between users without passing through a
central authority, such as a bank or payment gateway. It is created and held electronically.
They are not printed, like normal currency. They are mined by computers all around the world, using free software.

It is the first example of what we today call crypto-currencies. A growing asset class that shares
some characteristics of traditional currencies, with verification based on cryptography.

I hope that answers what is bitcoin.

Why bitcoin

  • It is private.
    Due to the increasing oversight and regulation to prevent money laundering and illegal transactions some people
    in high places have restricted the cryptocurrency’s use for privacy reasons.
  • It is cheap.
    In some parts of the world, it is still a more efficient and cheaper way to transfer money across borders.
    Several remittance startups make use of this feature. It has a low cost and it is fast.
    However there is a drawback. Liquidity remains a problem in many countries.
  • It is becoming accepted.
    A number of large and small retailers accept the crypto-currency as a form of payment. Although reports suggest
    that demand for this function is not high.
  • It is difficult to freeze.
    Many individuals feel more comfortable holding a part of their wealth in securely stored bitcoin. This is  where a central
    authority cannot block access or take a cut.
  • It is an investment.
    Recently it seems to have assumed the role of investment asset. This is mainly because traders, institutional investors and small savers have woken up to the potential gains from price appreciation.
  • The bad.
    According to some sources, bitcoin is increasingly being used for money laundering. But we know that you wouldn’t do that.
    And anyway, it is not, as is commonly believed, a good vehicle for money laundering, extortion or terrorism financing.
    Since it is both traceable and transparent – as a spate of recent arrests can attest.

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  By Carlsham