Bitcoin to bring bad day for Dollar, Rupee and Yen. Know How?

Bitcoin to bring bad day for Dollar, Rupee and Yen

What is Bitcoin?

We all might have any of these currencies in our wallet- Dollar, Pound, Rupee, Yen etc. And must have traded with that. All the currencies we deal with every day is some sort of physical currency.  Bitcoin is also a type of currency, but it is not a physical currency. Do not confuse with the word Bitcoin as some sort of coin. In fact Bitcoin is a cryptocurrency stored in some storage media like Bitcoin wallet.

At the very first, Bitcoin was introduced in the year 2008 by ‘Satoshi Nakamoto’. Bitcoin is a decentralised digital currency which works without involvement of central bank.

Bitcoin to bring bad day for Dollar, Rupee and Yen. Know How?

Here a question arises- Who controls the Bitcoin value and how a new Bitcoin is introduced in the market?

Well the answer of first question might be a bit confusing but you will be shocked to hear that “NO CERTAIN AUTHORITY CONTROLS BITCOIN VALUE”. In fact, Bitcoin value are controlled by all the Bitcoin users across the world. Yes, you heard right, Bitcoin value are controlled by its users.

The buying power of Bitcoin is determined in the same way as the buying power of British Stirling, Japanese Yen, American Dollar are determined through the market forces like demand and supply in International liquid market that operates around the clock. One of the fundamental deference is; Bitcoin trading never ceases, has been going since 2009. Bitcoin network never close. There is no closing price for Bitcoin and in that Bitcoin trading. A market capitalization of approximately $12 billion is traded internationally. Actual Bitcoin value depends in the number of active user and their transaction every ten minutes. A shift of 10-12 % in Bitcoin value is not unexpected. In fact, it is very common. Hope the concept of Bitcoin value now might be clear.

Let’s jump to second question, How a new Bitcoin is introduced in market. Well, a new Bitcoin is introduced through a process called Bitcoin mining. Bitcoin miners mines a new Bitcoin which are further after available for Bitcoin trading.

What is Bitcoin mining? Is there any limitation of Bitcoin mining?

Unlike paper money, where government issue the money. Bitcoins are generated by the miner where they use a special software to solve maths problem and issue a certain number of Bitcoin available for Bitcoin trading. In exchange of that, Bitcoin miners get some part of Bitcoin as a type of incentive which motivates them for further Bitcoin mining. Since miners are required to approve Bitcoin transaction. More miners means more secured network. Bitcoin network automatically changes the difficulty of maths problem depending on how fast they are being served.

Here creators of Bitcoin have made a very smart move to maintain the healthy transaction of Bitcoin flow. There are only 21 million Bitcoins available for mining.

If that 21 million amount of Bitcoin mining is reached, Bitcoin miners will be left away from their work with some Bitcoin reward.

Question: - If Bitcoin trading works without any central authority. Are all Bitcoin transactions hidden?

Well, it does not mean that Bitcoin transaction is hidden. Actually Bitcoin network is a total transparent network, where all the transaction of Bitcoin is available. Bitcoin miners use the same information to extract the mining process.

  

Risks of Bitcoins

As mentioned above, Bitcoin value is totally dependent upon number of active users transacting with Bitcoin. There remains no stability in Bitcoin trading. Every moment Bitcoin value fluctuates. Hence, you can’t be sure about your investment. Whether you have done a wise investment or not. But in general for long term investment, Bitcoin trading can be termed as a profitable business but you can’t be sure as Bitcoin value prediction is very much biased.

Another problem here is, Bitcoin trading is accessible by only those people who owns it. If you forget your Bitcoin wallet password, chances are high that you will lose all your Bitcoins.

Bitcoin to bring bad day for Dollar, Rupee and Yen. Know How?

  

There are many controversies attached with Bitcoin trading.

There is no particular personality attached with Bitcoin. What we all know that, the term Bitcoin was introduced by  Satoshi Nakamoto, which itself is an anonymous entity.

No one knows whether Satoshi Nakamoto is name of a person, group or an organisation.

According to Japan Bitcoin is considered as a legal tender whereas, JP Morgan CEO James Dimon thinks it more than a fraud.

Many country’s government have sour face toward Bitcoins because of their uncontrolled nature. They fear; Bitcoins promote corruption and acts as a major place to get rid of black money.