Bitcoin is a virtual electronic currency developed by any anonymous programmer or a group of programmer popularly referred as Satoshi Nakamoto. If you own a bitcoin it behaves like a real currency by which you can buy things, invest, exchange etc.
The most astonishing fact is that no government or any bank is linked to this virtual digital currency and so it is also referred as decentralized currency. If you own or do any transaction by bitcoins then no bank is involved in between. No transaction charge is required and, i.e., it is favored by maximum merchants.
How are Bitcoins generated?
Bitcoins are generated as a reward given to people called miners for their network of services. Without miners, Bitcoins would have been more vulnerable to threats. The work of miners is to secure and process transactions and for every successful service they are rewarded new Bitcoins. The rate of producing new Bitcoins is always fixed as per Bitcoin protocol which can’t be altered by anyone. So when many miners join for giving service the value of bitcoins gets reduced forcing the miners to increase their efficiency to earn more. The rate of rewarding new bitcoins becomes half in a year until it reaches 21 million when it stops.
How does Bitcoin works?
The transactions using Bitcoins takes place peer-to-peer means transaction takes place directly between users without the interference of any third party.
All bitcoin transactions by recorded in a public data ledger file called Blockchain. Any transactions occurring are validated by network nodes. Every bitcoin’s identity and its history of transactions are stored in this distributed database called Blockchain. Every single transaction of bitcoin contain a digital signature confirming the transaction from the participant’s side which helps to avoid the duplicity of bitcoins.
Why is Bitcoin favored?
Transaction through bitcoin is becoming widely popular. No intermediate person or group comes in between the transactions which result in zero transaction charge. Many merchants provide discount when you pay by Bitcoins. As the currency has no bank linked no tax is linked with the transaction.
Is it a Secure to use Bitcoin?
Sure it is completely secure to use bitcoins. Forgery or stealing your money is not possible easily. Also, your identity is hidden from rest of the world. People can see your transaction details but not your identity. Your bitcoin wallet can be stored both in online (cloud) or offline. If you own a good amount of bitcoins it is better to store your wallet, not on any cloud server, better to prefer offline mode to protect yourself from hackers.
Why Bitcoins is so controversial
Bitcoins don’t have any bank linked with it. So no bank can track your both identity and transactions. It is a great a very popular method of transactions used for criminal activities. Almost every transaction done in deep web is done by Bitcoins to hide from government agencies.