Bitcoin, The Revolutionary Digital Currency
A Bitcoin or simply BTC is a digital currency, (otherwise referred to as Cryptocurrency), system that uses a decentralized network to exchange cash between the two parties, thus eliminating the need for central banks or governments. Initially launched in 2009, the cryptocurrency was originally invented and authored by a group of people using the name is Satoshi Nakamoto in Japan. When compared to a gold, It is heavily considered as a precious digital asset in the digital world and is often referred as a digital cash, digital wallet, or more commonly as a cryptocurrency in professional contexts. Bitcoin, whether is a cryptocurrency or not, has led to many debates in the past and present. Due to its nature of being a digital cash with many risks and frauds also being associated with it, the currency is still considered as useful for holding a wide variety of applications across Economics & Finance. As in today’s world, the majority of major currencies are now authorized, so that makes Bitcoin as the most enduring and least prone to value loss over time for the governments and businesses. Before moving on towards its industrial applications, we now first have a look upon its Design & Architecture:
Design & Structure
Regarding the design or software architecture of BTC, we use the term Blockchain. The term Blockchain is implemented as a chain of blocks; block by block, with each block containing the cryptographic hash of the previous block up to the underlying base block of the chain. Blockchain is one of the main units on which Bitcoin is built. The blockchain acts as a public ledger that stores every Bitcoin transaction. We covered this topic in a different article, titled – What is Blockchain and Its Role in Crypto Investing?
Value
As a digital economic asset the Bitcoin has been and is still used as a venture capital and for a lot of investment purposes by both the individual and many of the Fortune 500 Global Brands. The value of an authorized currencies is determined by demand and supply. Likewise the deemed valued US dollar is used by the world’s largest economy as it controls the flow of payments in the global trade. The scarcity determines the value of Bitcoin.
Demand for cryptocurrency has soared while the supply has decreased. Bitcoin is more widely divisible, as compared to other authorized money systems as most authorized currencies can only be split to two decimal places as an ordinary use. While only one bitcoin can be divided upto eight decimal places by using satoshis as its constituent unit, named after its founder Satoshi Nakamoto.
Lastly a few associated risks that we would like to highlight are that the Bitcoin is not regulated by a Central Authority with its peer-to-peer network without the central servers as well with no central storage, means the bitcoin ledger is distributed. As far as anybody who possess the ability to be a Bitcoin miner, then he or she can easily access the ledger, which is publicly maintained by a network of the equally privileged miner.
Is it a good Investment?
There is still plenty of money to be made with this coin and others like it. Bitcoin is not a dividend investing coin as you only make money if you sell it. However, if you do your research you can make good money with bitcoin. At one point, bitcoin was worth $63,000. Currently however, it is hovering around $29,001 per coin. Analysts predict the coin will reach that number again in the future so if you have the capital it could be a good investment to buy now.
