Study About Bitcoin :" With Basics".
Introduction:
Journalists and investors have drawn comparisons between the American Gold Rush of the mid-1800s and the current mania for investing in cryptocurrencies like Bitcoin. Some liken the frenzy surrounding digital money to the 17th-century Dutch tulip craze. It remains to be seen if the market will implode like the Dutch tulip frenzy or if Bitcoin and its virtual brethren will persevere and establish a new gold standard.
Digital Currency:
Digital currencies, or cryptocurrencies, are Electronic tokens generated by networks of computers to replace traditional currencies. Paying for something with digital currency is not the same as paying with a credit card, debit card, PayPal or ApplePay, which all electronically access conventional currencies such as U.S. dollars, British pounds and Chinese renminbi. The electronic tokens in digital currency have value based on the exchange of conventional currencies and commodities for the tokens through special internet exchanges, such as BitPay. These exchanges function somewhat like PayPal but are not associated with that company. Like Gold, conventional currencies and commodities are valued based on national and international banking standards.
Making Digital Money:
Digital tokens, or Cryptocurrency, are produced as a result of specialized programs running on a dispersed network of computers within a closed online community. These programs employ a complex set of Cryptographic Methods. Individuals and organizations can open accounts, sometimes known as Wallets, in the specialized communities. The tokens can only be traded within Digital Communities.
The quantity of tokens that the computers supporting the community's transactions can produce is restricted by the creators of the communities. An Initial Coin Offering (ICO) is the crowdsourcing project used to raise money for the community.
Bitcoin was one of the first cryptocurrencies with a production cap, and it is unquestionably the most well-known. In 2008, a person solely known by the pseudonym Satoshi Nakamoto created Bitcoin and the necessary infrastructure to create and administer the digital currency. Nakamoto set a 21 million coin restriction on the quantity of Bitcoins produced by the dispersed network of machines in his exchange. Due to the restricted quantity, there is a greater demand for the tokens, which raises their value.
The Bitcoin's Value:
A single Bitcoin was assigned a trade value of around $5,000 at the end of August 2017. This was far more than the $1,300, or so that gold was worth at the time. But two weeks after the digital currency's peak, the price of Bitcoin fell to roughly $3,000. Those who put real money into Bitcoin in the middle of August and refrained from selling before the market crashed lost around Forty Percent of their investment.
Because of its status as the most Popular Digital Currency in the world, the Bitcoin community has become a standard in its own right, much like the heralded stock exchanges of Wall Street, London and Japan. As a result, when other digital currency markets falter, the value of Bitcoin also drops. In the case of the dramatic drop in value of Bitcoin at the end of August 2017, this occurred because other cryptocurrencies lost the support of the Chinese Government after proliferating at an Alarming Rate in China throughout 2017.
The Chinese Government feared the growth of huge and Convoluted Pyramid Schemes revolving around cryptocurrency exchanges that had their own Bitcoin-like digital tokens. As a result, the Government ordered exchanges like BTCC, OKcoin and Huobi to shut down by the end of September 2017. This edict sent shivers through global cryptocurrency exchanges around the world, and fear led to Bitcoin's rapid devaluation.
Now that Bitcoin has been shown to have a level of volatility that the gold standard and conventional currencies do not experience, it's unlikely that Bitcoin will become a Global currency standard anytime soon.
Security of Bitcoin:
Nearly a dozen bitcoin exchange breaches have happened since 2010. The range of losses is in the hundreds of Millions of Dollars. Comparatively speaking, though, throughout this same period, traditional banks and financial organizations have lost billions of dollars to Hackers. Cryptocurrency communities and programmers are putting a lot of effort into finding and fixing the weaknesses in their blockchain networks. In fact, Government Central Banks may discover that advanced computer algorithms take center stage if bitcoin is accepted as payment by Physical merchants.
Individuals who invest in Bitcoin should ensure they have adequate internet security in place before accessing their financial data and conducting any transactions.