If you don’t understand bitcoin, it must be because you think money, or the fiat currency, is real. You would want to argue that money exists in bank notes and coins, but what if we told you, money, the value of it, just like bitcoins existed in the cyberspace? The currencies which store money might be real, but the value of money is as intangible as the value of bitcoin. So, then, you might ask what is the difference between money and bitcoins? Well, just that more people believe in the illusion of money, as it has been around for a while and it is an accepted means of payment.
You must be further intrigued to know that 90 percent of fiat currency does not even exist. Only 10 percent exists in cash, and coins, whereas the rest exists purely in abstract. Now, enough about money! Coming back to the main contention in the article: why most people don’t understand bitcoins. The most obvious explanation is people are unaware of the mechanisms that lie behind bitcoin, like cryptocurrency. To define cryptocurrency, it is a digital asset that has encryption protection, and is used in financial transactions. All these financial transactions happen through computers. Some of the positive attributes of bitcoin which most of us are only finding out now, is how they’re more secure transactions than all our monetary transactions. It is almost impossible to steal bitcoin, forge them or hack them, at any cost. And, this is the reason why bitcoin would stick around in the days to come.
As bitcoin is a digital currency, most people are worried about double-spending. What if you’ve already sent it to someone, prior to sending it to me? That is where ledgers come in! Ledgers, if simplistically defined, are accounting books that keep a track of all financial transactions. The benefits of having ledgers is basically the fact that we cannot sell something, that has already been sold once. These ledgers are absolutely transparent, so that anyone and everyone can view them. The transparency makes the digital asset bitcoin reliable and cancels out all issues of double spending, by thereby restricting them.
The open-source public ledger that keeps a track of bitcoins, and their transactions, makes a note when a bitcoin is sold to someone. It verifies and updates the system, and that is what makes the digital asset assign a tangible and meaningful value, like a physical object, or fiat currency. This is how bitcoins work. Most people fear bitcoins, because they don’t understand the way in which it works.
A few more interesting facts about bitcoins that would help you to understand it better, include:
- There’s no middleman: All transactions, even international, and across borders, happens directly from one person to another. The absence of a middleman cuts off all possibilities of extra remuneration being spent, or bureaucratic delays that often happen, when you’re trying to transfer money.
- It is secure, even more than money: As they are digital as well as encrypted, you cannot be ripped off, or your bitcoin cannot be stolen. Every bitcoin has a value, which is unique to it, and the ledger stores transactional details as well as owner details, hence it is beyond impossible to forfeit your bitcoin.
- This works universally: For money, the basic problem we face is every country has a different currency, which makes you go through numerous exchange. Exchanging money has its own costs, and delays involved. But if you’re someone who travels frequently, you might be delighted to know bitcoins work almost everywhere around the globe. There are bitcoin ATMs across major cities of countries as well, and as there are no exchange rates, bitcoin’s value remains the same even in a different country. They are being more and more popular, because they’ve no fee transactions, and can be operated from your basic gadgets like mobile phones and tablets.
- You’re in total control of your bitcoin: What we mean here, is unlike any digital asset, or even money, where your money is in your bank, and though it belongs to you, you have to get it out of the bank and depend on their mercy. For bitcoin, you’re in control of whatever value you possess. You’re not subject to the terms of service of banks, or other financial institutions. You own it, and you decide what to do with it. You retain all the funds here, and there is absolutely no third party engagement. The only one who can change the terms of service or usage for your bitcoin is you!
Now when you’re dealing with bitcoins, you’ve to understand the value goes up and down, like in any financial market, depending upon demand and supply, and the complex links between the two. To help you make instant earnings, you need a bitcoin software like Immediate Edge that integrates itself seamlessly with your system, and helps you figure out better profits!