What is Bitcoin?

Bitcoin is a decentralised digital currency that debuted in January 2009. It is based on the ideas presented by the enigmatic and pseudonymous Satoshi Nakamo in a white paper. Bitcoin is a digital currency that enables secure peer-to-peer internet transactions with lower transaction fees without the involvement of government agencies. Any two people in any part of the world can send money to each other without the involvement of banks or other institutions.

Every Bitcoin transaction is recorded on the blockchain, which functions similarly to a bank's ledger, or log of customer funds flowing in and out of the bank. In layman's terms, it's a log of all bitcoin transactions ever made. All Bitcoin transactions are verified using a vast amount of computational power, a process known as "mining."

There are only 21 million bitcoin ever created. No coins in future will be added or removed, which means Bitcoin cannot be inflated.Bitcoin has grown in popularity and is traded on crypto exchange platforms on a daily basis.

 Bitcoin Mining

The process of adding and verifying transaction records across the network is known as bitcoin mining. During this process, fresh Bitcoins enter the market. Mining is done by solving tough problems, and each solution adds a new block to the network. The block reward in 2009 was 50 Bitcoins. The block reward is reduced due to halving, which occurs every 210,000 blocks. The block reward was lowered to 6.25 Bitcoins per block on May 11, 2020.

Application-specific integrated circuits (ASICs) as well as more complex computing units, such as graphic processing units, can be used to mine Bitcoin (GPUs).

What are the benefits of using Bitcoin?

  • There are no costs associated with Bitcoin transactions.
  • One benefit of utilising bitcoin to make a payment is that it decreases the quantity of personal information required.
  • Transactions in Bitcoin are safe. If a hacker has access to your wallet's private keys, only then they can steal it. 
  • Bitcoin users can send Bitcoin using their smartphones or computers from anywhere in the world, without any involvement of Banks. So that makes it accessible to everyone.
  • When it comes to international transfers, Bitcoin has cheap transaction fees. Because it does not involve any Banks or any other institutions. 


What are the risks of using Bitcoin?

Bitcoin's and all cryptocurrencies' prices are particularly volatile because it is a new market. Bitcoin's price is prone to wild swings. It makes trading extremely difficult. Even minor news can have an impact on the price of Bitcoin, making it a dangerous investment.

Instead of mining, the majority of people who own Bitcoin buy it from crypto exchanges. Bitcoin exchanges are completely electronic and hence vulnerable to hackers. If someone gets their hands on your private keys, they can quickly transfer Bitcoin to their own wallet. It is irrevocable once it has been transferred..

Fraud danger

Bitcoin uses private key encryption to verify owners but there are fraudsters and scammers who may try to sell counterfeit Bitcoin. People who are new to Bitcoin are particularly vulnerable to such scams. People who claim to double their Bitcoin if they transfer to them can easily defraud them. It's nearly impossible to get your Bitcoin back once it's been transferred.