An introduction to Bitcoin

Bitcoin is a digital currency created in January 2009. The idea behind this technology was set out on a white paper in 2008 by the mysterious and pseudonymous Satoshi Nakamoto. The real identity of who created this is still a mystery. Bitcoin is the world's first decentralized Cryptocurrency without the involvement of a third party like banks or the government or a single authority in the administration of a whole system. Bitcoin uses a peer-to-peer (person to person) network for transactions verified by network nodes(computers) through cryptography and recorded in a public ledger known as a blockchain. There is no physical existence of transactional records. 

Miners are the decentralized authority responsible for securing the transactions through a peer-to-peer network. Miners are the real masterminds behind the mining process that requires solving computationally difficult puzzles to discover a new block, which is added to the blockchain. Bitcoin mining adds and verifies transaction records across the network. The reward for miners is Bitcoin. 

Benefits and Risks of Investment In Bitcoin

It takes a few minutes to send any amount of money to another part of the world through Banks but Bitcoin has lower transactional costs as compared to the traditional online payment mechanisms. There is no third-party involvement in the case of Bitcoin hence removing the power that FIAT money has over the population. No one can freeze, charge or demand your coins. They can't be stolen and the government can't seize them in any conditions. Buyers don't have to disclose any confidential financial information to the seller. Your true identity is hidden and coding is used to save or add information. Hackers can't get into the system of bitcoins. On the other hand, Bitcoin prices keep rising and falling at a rapid rate contributing to great risk in investing. When Elon Musk, Tesla CEO tweeted that Tesla will resume allowing Bitcoin transactions, Bitcoin prices jumped as a result and later came down when the CEO reversed his decision. All the investors who could have invested during that period would be devastated when came the news of Elon Musk reversing his decision leading to the downfall of Bitcoin prices making a huge loss for the investors. Bitcoin is still not accepted in many countries as a legal tender despite its huge popularity. The Government of India has recently changed its decision regarding the acceptance of Bitcoins by RBI on the order of the Supreme Court. There are fewer rules and regulations when it comes to Bitcoin transactions which can lead to fraud. A lot of people in the world still prefer the traditional methods of payment. Many people still don't have any access to the digital world. People still have more faith in the traditional banking system. However, it's easier to invest in Bitcoin and safer if you take it slowly and thoughtfully rather than just investing recklessly for a dream of rags to riches overnight.

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