Elon Musk the CEO of Tesla or simply put self-proclaimed “Technology King” is pushing the support to virtual currency – then indisputably it can be considered as a substantial thing. That said, what exactly is digital currency? Why is it called the future of finance? Before addressing these queries, let us peep into the background to know more about Bitcoin alias cryptocurrency.
First and Foremost, What Is Bitcoin?
The consummate and crisp definition of Bitcoin: it is a digital currency in which money is exchanged virtually. Also termed as cryptocurrency, it is the first decentralized currency that can be purchased and sold through the internet. Additionally, Bitcoin transactions furnish a lot of conveniences as the user is empowered to execute them from the privilege of their households. They don’t have to make physical visits to any of the branches.
The mysterious creator of Bitcoin, Satoshi Nakomoto described Bitcoin as a virtual currency based on a cryptographic system. With that being said the cryptocurrency isn’t backed by the government. Making it the most volatile currency, making Bitcoin a game for seasoned players only! Novice investors or individuals looking for stable returns might need to understand the tips and tricks before investing in Bitcoin.
How does Bitcoin work?
Bitcoin works on the popular technology “Blockchain”, which oversees the digital record through blocks-constituting the information about every transaction performed by the user. Typically, it is just a kind of computer file that can be garnered in a “digital wallet” installed on the smartphone or can also be accessed through your computer. People dealing with Bitcoins can transfer them from their wallets to others and vice versa.
In continuation, during their processing, such undertakings are necessarily stored in a public list well-known as Blockchain. Consequently, this allows the history of the previous transactions to be traced rather easily, which prevents individuals from disseminating coins they do not own or make copies of.
How can people own Bitcoins?
Below are three modalities to procure Bitcoins:
- They can be confiscated using “real” money.
- You can sell things and in return can demand Bitcoins.
- Bitcoins can also be created using a computer.
How are new Bitcoins created?
Bitcoins are usually compared with gold as both of these are obtained by the process of mining. This technique involves the employment of several computers to resolve a computational puzzle. In return, the user who is taking care of the entire process is occasionally rewarded with a Bitcoin. Generally, this approach to wielding powerful computers is implemented by smorgasbords of individuals to set a seal on their Bitcoins.
But did you know that there is a limitation to this supply? In actuality, only a total of 21 million Bitcoins can be mined.Once the miners achieve these numbers, this supply will be exhausted.And as per the data till 2017, close to 17 million Bitcoins have already been mined. This is why; the given sums are incessantly becoming more and more convoluted to fix to avert the emergence of too many Bitcoins being generated. Hence, just in case if you begin mining today, it can take years for you to get your hands on a single Bitcoin.
Notwithstanding; with technology shifting gears each passing, the current trend of Bitcoin protocol may also alter in the coming future. We may experience an augmentation of this current supply, but that will be ascertained only with time.
So, let us dig deeper to know what Bitcoin holds in the near future 2022
- Hyper-Competition From Tech Giants
Bitcoin may have achieved or still in the process of accomplishment, but it has compelled big tech giants to ponder on the potential of digital currency. Furthermore, the companies involved in the digital landscape for payment after Bitcoin decade long survival have comprehended the digital currency has the huge potential to grasp.
In 2021 social media ogre Facebook and search engine monster Google has taken one step forward in investing in big cryptocurrency plans. Facebook Diem (Libra) is one such example of blockchain-based digital currency. It will also be called an independent global currency by Facebook, the revolutionary move that will allow real-time e-commerce transactions.
Having said that, will people accept the move taken by Silicon Valley Giant? They will comprehend the Diem facebook association? Or will Facebook cryptocurrency reshape the landscape for Bitcoin?
Indeed an interesting scoop to watch out for in 2021.
- Global Acceptance
The world’s biggest digital currency Bitcoin is getting global acceptance among mainstream companies such as Tesla and PayPal. Additionally, Toronto Stock Exchange has approved crypto-based trading, proffering Bitcoin widespread acceptance. Plus pioneer fintech companies such as Square’s Inc. have invested $50 million in Bitcoin under economic empowerment- a signal of acceptance to crypto.
The only concern that digital currency has is its extreme volatility in nature just like the egg chicken problem, few use it as well as few accept it. Howbeit, companies that believe in Bitcoin after its decade-long sustainability also indicate that it has the potential to be termed as the “future of currency”.
- Head To Head Competition From Central Bank
A recent survey published by Bank for international settlement (BIS) states that more than 70-80% of the world’s largest central banks are driving their efforts to form some kind of digital currency.
The Bahamas is known for its sun and surf, but not anymore the country has launched its new digital currency, coined as a sand dollar. And it has documented its name among those few countries which have launched their own digital currency. To add, China is leading as they have pumped more than $300 renminbi into the economy.
What’s more- the Bank of England may issue a “Britcoin” and Sweden might be the first country in the world to go cashless by the end of 2023 with its cryptocurrency e-krona. Thereupon, in the coming years, many more countries around the globe may undertake similar experiments.
Did you know there are more than 7000 cryptocurrencies in the market today! Bitcoin is the most renowned and popular cryptocurrency among the masses.
So, it is hard to anticipate if investment in Bitcoin in 2021 will be a crazy journey as happened in 2020. Perhaps, the aggressive investment may lead to huge profits or big losses. The best-fitted solution is to undertake the golden rule of investment “invest only what you can afford to lose”.
Investors buckle up for the latest bull in the market