The modern world brings change also in one of the oldest things in civilization – currency. We often hear about cryptocurrency, or Bitcoin, as the names are used now interchangeably. The truth is, not so many people understand what it exactly is, why it is gaining popularity and does it mean cryptocurrency will be our financial future?
As it was already hinted, Bitcoins are cryptocurrency. The truth is, it does not explain anything, so let’s start with the crucial things. What is cryptocurrency? It is a virtual type of money, but it cannot be described as a currency. It is not controlled by any official institution and is not respected everywhere. As such, cryptocurrency does not meet the requirements to be an official currency.
Cryptocurrency allows peer-to-peer payment without the intervention of any third parties, e.g., banks. It means that the users can exchange it with each other directly, leaving no sign or trace. In other words, using cryptocurrency is entirely anonymous.
Bitcoin is a type of cryptocurrency. It was invented by an unknown person in 2009, who worked under the alias, Satoshi Nakamoto. Everything started in the ’90s as a group, cypherpunk, used advanced mathematics and cryptography in the field of communications, finances and commerce. Bitcoin has emerged from that protocol. It was the first digital money-like system that allowed direct payments.
Where does it come from? No institution coins and supplies it to the public, because it is not in a physical form. Bitcoins are entirely digital. They are acquired by the use of blockchain technology that requires the users to mine the coins. None of these cryptocurrency terms sounds clear, but the whole process is neither an easy one.
Mining enables the transaction. It uses computational algorithms of computers. This mining is an extraction method that consists of challenging and complicated mathematical riddles. When a computer solves this puzzle, it mines one mining block, which rewards the user with a coin – Bitcoin. To get access to a digital wallet, you need a private key. It is vital that all those keys are well-protected because when someone can reach them, they can also steal acquired Bitcoins.
Mining is possible after setting up an account. It is a bit similar to the e-mail account, except it has 27 to 34 letters and words.
Investing in Bitcoins
As Bitcoins are not respected as official currency, you cannot pay them anywhere you want. Only a tiny part of the business accepts this kind of payment. Cryptocurrency is more often used in the exchange between larger businesses than in relations with private customers. For some of these companies, it is the idea of anonymity that is so alluring. Although cryptocurrency is rare, it does not mean that you cannot use it anywhere. There are, for example, Bitcoin casinos where you can safely play with the use of mined coins. The list of the secured platforms on the Vegas Slots Online site will help you to choose the right one, in which your coins can earn you something. You will find an explanation of how the whole Bitcoin system in online casinos work, so you can feel safe when playing.
Bitcoins are also popular among those who search for promising investments. Cryptocurrency value quickly rises, and the numbers are quite high, but it often falls. In other words, Bitcoins are extremely volatile as an investment.
Are Bitcoins our future?
The question of Bitcoins’ future is not an easy one to answer. Some economists say that cryptocurrency will become more and more popular, and, as such, might be officially recognized. Companies might be more eager in the future to accept payments in Bitcoins. However, there is also the other side of that coin.
Cryptocurrency is right now unstable. Its main advantage for many is that it allows direct (and anonymous) transactions. If it was officially recognized it would, sooner or later, be regulated by some institutions. Therefore, it would lose its greatest advantage.
When it comes to Bitcoins, there is an issue that might sound surprising, as it is not the first thing to be associated with cryptocurrency. This issue is the environmental impact of Bitcoin mining, as it requires huge amounts of energy, similar to those used by the whole area. Even Elon Musk, who invested in it, has shown some concerns in the matter.
There are numerous arguments for and against cryptocurrency. At the moment, the majority of people are either in opposition to the whole idea or simply unaware of its mere existence. Bitcoins have their value and assets, one of the biggest being the payment without any interference of the third parties. However, this means that no one regulates the issues and protects the users of cryptocurrency. Because of the anonymity and no sign of transactions, the mined coins might be, and are, used in dangerous or at least illegal activities. Bitcoins certainly have their dark and bright sides