Bitcoin is the first and only decentralized form of currency. People like Jamie Dimon, CEO of JPMorgan and Tidjane Thiam, have used the terms “fraud” and “bubble” to describe bitcoin. If you’re not familiar with how it’s obtained and why the thought of it is so speculative, we’re here to share some facts about this futuristic tech phenomenon. Bitcoin was developed in 2009 (even though the domain was purchased in 2008) as a peer-to- peer currency by the notorious, unidentified Satoshi Nakamoto, who still is unknown to the general public. Nakamoto is assumed to be a web developer worth approximately $700 million US dollars.
Bitcoins are not physical objects, instead they are kept in a cloud along with transactions, through a technology based system (i.e. phone, computer). Banks or governments do not issue bitcoins, nor are they valuable as a commodity. Also, bitcoins are not yet considered legal tender, but that hasn’t stopped bitcoin miners from mining! Other virtual currencies are launching also.
How It Works
As of November 2017, one bitcoin is worth 6,094.16 US Dollars. The price is also dependent upon the size of the mining network. The larger the network, the more difficult the work, the more the price of a bitcoin. Bitcoins facilitate instant peer-to-peer payments. Miners are the individuals and companies that govern, compute, and participate in the network. They are paid through the release of new bitcoins and transaction fees. In layman’s terms, bitcoin is an anonymous form of digital coins used to purchase almost everything. Bitcoin miners are connected to a network of individuals that are rewarded for verifying online mathematical transactions.
The bitcoin is mainly used to avoid bank fees, cut taxes, and prevent inflation for individuals as well as businesses. Bitcoin miners have the duty to “bitcoin mine”, which is the process of bitcoins being released to come into a circulation, which eventually becomes a blockchain. The minors are rewarded through bitcoins but are based on how much their complete the maze of connecting all of the transactions. Due to no one controlling the bitcoin network, hundreds of computers all over the internet are working together to process bitcoin transactions. The more transactions, the harder the computers have to work. Therefore, miners must use faster hardware such as ASIC and GPU.
To Buy or Not to Buy
Only 21,000,000 bitcoins will ever come into the world; this is the number one selling point for smart investors. Due to the high demand for bitcoins, the more attractive it is to hackers. Losing your wallet and information to bitcoin is a rather large risk. Also, the fluctuation of a bitcoin’s worth can change day-to-day, week to week. Conventional payments are more convenient right now than taking your chances with bitcoins.
Bitcoins are becoming more convenient to buy and spend. As of 2017, over 120,000 merchants and vendors accepted bitcoin as payment. Indeed, the popularity is growing but bitcoins are not widely enough used to make it a useful option. Our suggestion is to really do your research, know the risks, and don’t bank on it, that is unless you’re willing and able to take a significant financial loss.
Your accountant should not advise you to perform such a risky endeavor if you don’t have 6 months of emergency funds in a savings account. Bitcoin is a great investment for individuals who can financially afford the possible risks associated with cryptocurrency.
Thank you for reading thus far, we hope that you have gained some insight on how bitcoin works, when it was developed and who founded the idea. For more amazing tips and tricks, and more about our company’s services visit us online!
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