Ring any bells? For the past few months, Bitcoin has been in the spotlight as its value shot straight up from a mere $0.08 in 2008 to a whopping $17,000 in 2017. In case you missed out on Bitcoin, we’ve got you covered! So grab yourself a nice cup of tea and get ready to have your mind blown. From explaining what is Bitcoin to revealing why is it so popular, this article has it all.
What is Bitcoin?
It is a decentralised cryptocurrency that works without a central bank or single administrator; in simpler terms, Bitcoin is basically a virtual coin designed to be ‘self-contained’ for its value, with no need of banks to control the flow of exchange of money.
How does it work?
Bitcoin is based on a technology called ‘Block Chain’ where a public ledger is maintained instead of the bank keeping tabs on transactions. Once you have installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose your addresses to your friends so that they can pay you or vice versa. In fact, this is pretty similar to how email works, except that the addresses should only be used once.
Why is it so popular?
- Decentralised in Nature- There is no central authority or middlemen in between to monitor a transaction.
- Easy to set up- A Bitcoin account can be effortlessly set up as compared to setting up a bank account.
- Anonymity- Users can hold multiple addresses without displaying any personal information like names, phone numbers etc.
- Transparency- Each transaction is recorded and maintained in a public ledger and hence can validate a payment quickly.
- Minimum Transaction Fee- Compared to the heavy duty paid to the bank for international transfer, Bitcoin’s fee is very minimal.
Is too late?
The answer is “Nobody knows”. The truth is cryptocurrencies are too unpredictable and can shoot up or down at any point in time. It is thus difficult to predict how long this particular bubble will sustain. Also, it is advisable not to make an entry into this digital currency without any idea or expertise in cryptocurrencies.
So that’s it, folks! Put on your thinking caps and tell us what you think about this trending topic in the comment section below.
Watch this video by The Guardian to gain further insights.