Bitcoins is a kind of virtual money invented by Satoshi Nakamoto. It is known as a decentralized currency because of its lack of a central authority or any administrator. It works on a peer to peer system and does not have any kind of depository.
It’s just like sending or receiving a gold coin, just in a virtual form!
Although Satoshi Nakamoto did invent this system, he left it and did not specify any reason to do so. Ever since the community has grown on without an inventor or caretaker apart from its own users who take much care to comply with the systems to protect this creation for their own benefit.
The system also has a massive ledger, which is public and every user can access it to make sure that all the transactions made are authentic and they contain automatic signatures. This record has a listing of all the transaction ever made on this system. Hence, sending and receiving Bitcoins is not unnoticed.
Bitcoins can be used anywhere and everywhere; online. You can even use it for buying something off the internet. However, just one huge hitch; the business needs to accept Bitcoins, and most don’t.
However, if you are planning to invest time in owning currency that you cannot stash under your bed to make safe, you should be aware of a few things that would make you more knowledgeable about the virtual money.
1. The future of Bitcoins is a bit shady for someone looking to invest real time. Bitcoin values have fluctuated drastically over the past few years. Nobody has been able to predict any kind of future of the Bitcoins. However, some experts do suggest that you can get a few and place them aside for a few months or years to check what happens to them, as there are bound to be regulations on this pretty soon.
2. Like you must take care of your wallet in your back pocket, you must secure the wallet on an online site, wallets can be easily hacked and scenarios have occurred where huge amounts of Bitcoins have been transferred to another wallet by hackers.
3. You need to take care of the people you do business with, because Bitcoins are irreversible. They can only be refunded by the person who has received them. Bitcoins can detect typos and usually won’t let you send any to an invalid address, however, just take care that you can trust the people you deal with.
4. You have to take your own measure for maintaining your privacy and protecting your accounts, as all Bitcoins are stored publicly and permanently on the networks and always remember that it is your own responsibility to adopt good practices in order to protect your privacy.
5. 10 minutes is the average time to transfer Bitcions, however, the transactions is not secure. The transaction does not start out as reversible; instead it gets a confirmation score by the time of the transaction initiated.
6. Bitcoins are still in the developmental phase and is trying to reach out as a standard mode of operation. However, it is hard to say if this growing phase will not let the users encounter issues which may or may not include fluctuating fees, slower confirmations or even more severe issues. Do consult a technical expert before making any major investment, however, bear in mind that nobody can predict this systems’ future!
7. Bitcoins are not an official currency; however, like some entities it still require you to pay income taxes, sales, payroll, capital gains taxes on anything that has value. It is an individual’s responsibility to follow the rules and regulations set forth by their government or their local municipalities.
8. Bitcoin supply is limited, which means that the system is a finite system and ass of now there won’t be any more Bitcoins coming into the system after 2140. That equals to almost 2.1 crores of Bitcoins, however the system was designed in such a way that new Bitcoins come into the system every 10 minutes.
9. You should also be informed that mining is not the only way to obtain Bitcoins; you can get Bitcoins through numerous exchanges throughout the whole world.
10. Last but not the least, law enforcers and regulators are worried about this system because although the record has a list of each and every transaction ever made, it does have no authentic names and identities are hidden. A lot of people have been caught dealing in illegal activities and some are still out there.