After the hype in 2017. Again, by the end of 2020 and in the start of 2021 the bitcoin hype is proliferating and is spreading across the globe, especially west world and in some parts of South Asian Countries. Although it is banned in mane South Asian Countries it is very popular in Europe and United States particularly.
Bitcoin is simply cryptocurrency. A digital configuration of money, note or currency. It should be noted that there is no note or physical currency involved in cryptocurrency, neither does the cryptocurrency have any physical existence. Its existence is digital and is only found in online networks. The cryptocurrency is made from specific codes, crypto means codes. In short, the money is made from these digital codes. They are secured digital currencies that are overlooked by computer or internet through peer-to-peer internet protocol. The exchange of currency and usage is mainly internet based and is tightly encrypted end-to-end. This encryption and its related techniques actually help in controlling, overseeing, monitoring and formation of digital money or a monetary unit. This also helps in verification of exchange or transfer of currency, and funds between different mediums at the ends. The cryptocurrency mainly works through blockchain technology, through which the transactions are mainly made.
- What is Blockchain?
Blockchain is the reason cryptocurrency comes into existence. Blockchain is a public ledger of the funds transfer of cryptocurrency made on the network across a peer-to-peer network of internet protocol. The blockchain is decentralized ledger which means that there is no higher authority to clear transaction. This authority is redistributed among the nodes, known as computers in a network which process the transaction and confirm its validity. Using blockchain technology allows participants to confirm their transaction without the interference of, or accountability to a central authoritative entity. These applications can be funds, trades, bitcoin and many other problems.
Blockchain technology works like this.
- A transaction is requested from a particular entity through online network
- The transaction is monitored and goes live and is telecasted on the peer-to-peer network that is comprised of computers and these computers are known as nodes.
- These networks of nodes when once verify and analyze the validity of transaction (the transaction and the status of the user who requested transaction is reviewed by using systems’ algorithm), the process moves on the next step.
- Additional: A reviewed or checked transaction that is verified by the nodes can consist of not only cryptocurrency like Bitcoin, Ethereum, Ripple, etc., but other information like contracts, records or other documentation.
- After verification, the transaction is added with other (previous) transactions like a block in a blockchain to make a new block of data for the public ledger.
- The new block is added into an already existing blockchain of transactions in the ledger.
These ledgers along with blockchain keep the identity of the participants hidden and may use pseudonyms for the participants to maintain secrecy on the network. Some selected participants of the network mainly known as full nodes, have a copy of the complete ledger on their computer devices, through which the transactions can be verified, so that other participants can’t catfish other participants and stop double spending by a participant on a single transaction. Double spending is a malicious activity by a user who tries to use their bitcoin to two separate receiving entities or participants at the same time. Blockchain ledgers help locate the verified transactions which are than compared with the ongoing transactions, and see whether the user is sending the same transaction again (if it does, the ledger already has the copy of the transaction and stops the transaction) or if it is a new transaction. If the transaction is new, it is verified and added to blockchain and is recorded as a copy. This allows more secure transactions as there are no central authoritative entities to infiltrate transactions and the ledger helps in stopping scams.
- Mining: There is a very popular term in cryptocurrency and Bitcoin known as mining. Now, it isn’t like normal mining that you have to extract any data or information or documents but rather mining is a process of compelling the computer hardware of a participant do mathematical calculation to regulate bitcoin network to confirm and verify transactions and enhance security of the network. To recognize and reward their services the bitcoin miners are given transaction fees for the transactions that are regulated by their computer. They are also paid by newly made bitcoin by the miners. Mining is a very competitive market and is very specialized, the rewards are split between users according to how much calculations have been made.
- Bitcoin and its market value along with Ethereum, Ripple and other cryptocurrencies.
When cryptocurrency is talked about? The most famous names come are Ethereum, ripple and Bitcoin. Bitcoin is the most valuable and expensive cryptocurrency in the world. It like many famous rivalries, has a rival named Ethereum, which is also a very blooming cryptocurrency in this age. Bitcoin uses blockchain technology, mining to regulate. In 2017 the bitcoin reached the highest market value of approximately $20,000 to $21,000. There have been many demands from corporate world investors and other institutional and retail investors, which has caused the bitcoin to surge from its 2017 $20,000 mark and reach $30,000 mark in January after PayPal permitted its customers to utilize cryptocurrency in October of 2020. Ethereum has a value of $1200 to $1300 in the market and is a bitcoin rival but it does not have a significant market value as much as bitcoin has but Ethereum has maintained its position and has slower progress rate than bitcoin. However, Ethereum did dip 10% from the market value but then again increased 3%. Bitcoin had a low value in march but in October it significantly rose and in January 2021 it reached its highest peak of $41,000 + and is currently about to reach $42,000 mark.
Many people are confused as to they should invest in bitcoin or not, first things first. Cryptocurrency and bitcoin are the future. Digital Currency is the future of currency and monetary medium in near future. In 10-year, mark Bitcoin is supposed to reach as far as $146,000 market value. If the demands keep increasing like they are. Bitcoin is a secure investment as of now. It has better security and the bitcoin can be sold for money at certain exchange platforms. The investment in bitcoin is proliferating at this moment, but it is significantly increasing as people are understanding of what bitcoin is and how it is processed. The bitcoin is very popular in some countries, but it is also banned in many countries. Nonetheless, Bitcoin prices will go high and it is the right time to invest in it.