Bitcoin (BTC) is a new type of digital currency — with cryptographic keys — distributed on computers used by users and miners around the world and is not monitored by a single agency or government. It is the first digital currency that has attracted public attention and is widely accepted by many retailers. Like other currencies, users can use digital currency to buy goods and services online and in other stores that accept them as a payment method. Currency brokers can also trade Bitcoins in exchange for Bitcoin.
There are significant differences between Bitcoin and traditional currencies (for example, the US dollar):
- Bitcoin has no control over or control the home (e.g. government, central bank, MasterCard or Visa network). Payment networks with each other are managed by users and operators around the world. The money is transferred anonymously between internet users without going through the platform. This means that sales revenue is very low.
- Bitcoin is made through a method called “Bitcoin mining”. Workers around the world use mining and computer software to solve the obvious problems and accept Bitcoin transactions. They receive payment with new Bitcoins generated from dealing with Bitcoin algorithms.
- There are very few Bitcoins published. According to Blockchain, there were about 12.1 million copies issued as of December 20, 2013. The financial problems of Bitcoins (algorithms) are becoming more complex as more Bitcoins are generated, and the average spread amount is 21 million. The limit could not be reached until about 2140. This makes Bitcoins more valuable because more people use them.
- A booklet called ‘Blockchain’ records all the events of Bitcoin and shows what each Bitcoin has. Anyone can access the public record to confirm what happened. This makes digital currency more visible and more predictable. Most importantly, transparency prevents fraud and the use of the same Bitcoins.
- Digital currencies can be obtained through the Bitcoin mine or Bitcoin exchange.
- Digital money is approved by a few online traders as well as some brick and mortar sellers.
- Bitcoin wallets (similar to PayPal accounts) are used to store Bitcoins, passwords and public addresses and to transfer Bitcoins between anonymous users.
- Bitcoins are uninsured and are not secured by government agencies. As a result, they will not be available if password keys are stolen and hacked or lost on the hard drive, or because they block the Bitcoin exchange. Once the password is lost, the associated Bitcoins will not be available and may not be on the move. Go to this link in the FAQ on Bitcoins.
I believe that Bitcoin is widely accepted by the public because users can be anonymous when purchasing goods and services online, payment rates are much lower than credit card payment networks; a public record can be made available to the public, which can be used to prevent fraud; operating costs amount to $ 21 million, and the pay network is used by users and gardeners instead of administrators.
However, I do not think it is a good investment vehicle because it is very complex and unstable. For example, the price of bitcoin grew from $ 14 to a peak of $ 1,200 USD this year before falling to $ 632 per BTC at the time of writing.
Bitcoin has grown this year because traders think the currency will be funded and that it will increase in value. The fund entered 50% in December because BTC China (China’s largest exporter) has announced that it will not receive new payments due to government regulations. And according to Bloomberg, China’s largest bank has banned financial institutions and paying companies from overseeing exhibitions.
Bitcoin may be accepted by the public over time, but its value is very limited and it is very clear in terms of issues – such as government regulations and restrictions – that can confuse the currency.
Therefore, I do not recommend that businesses use Bitcoins unless purchased at a minimum of $ 10 USD per BTC as this may allow greater security limits.
Otherwise, I believe it is better to save money in stocks with a solid foundation, as well as greater hope for business and management teams because companies with internal values are more reliable and well-known.
Disclosure: Victor Liang has no hold on Bitcoins and has no plans to change his position in the next 72 hours.