Over the years, you’ve probably been hearing the terms Bitcoin, cryptocurrency, and blockchain. The first of these, Bitcoin, is the most famous one, and it refers to a kind of alternative currency that only exists digitally. In simple terms, Bitcoin is a digital currency that is protected with layers of encryption. Just like gold, Bitcoin is mined, albeit digitally. It is a decentralised currency, implying that the transfer of Bitcoins is not subject to any third-party support, including banks. It is a peer to peer transaction which works without an intermediary. It is an open source software. This means, that no person, company or country owns this network just like no one owns the Internet and since all the money as such is a digital concept, the so called black money doesn’t even exist here.
“Mining” Bitcoins is done using specialised programs running on your computer that work to decrypt the algorithm, uncovering the code for each coin. When Bitcoin was new, most people got into the currency by mining it, as the process was quick and easy. However, by design, there is an upper limit to how many Bitcoins can exist in total, and as more and more Bitcoins were mined, the complexity required to uncover fresh coins also went up. At first, anyone with a home laptop could have mined for Bitcoin and built up a collection. Over time, as Bitcoin gained in value and interest rose, dedicated miners started to invest in specialised hardware, to rapidly mine for coins.
Right now, Bitcoin is a bit of both an investment and money. You’ll find services, both online and offline, that are willing to accept payments in Bitcoins. It’s also an easy way to pay freelancers in other countries, because it takes away an incredible amount of paperwork in that scenario. Bitcoin is surely one of the foremost options for investment in the present times given all the emphasis on going cashless and a growing uncertainty in the currency notes, Bitcoin investment is a sure and certain break from the same. Since there is an upper cap of 21 million on the total number of Bitcoins that can be mined, we can foresee the values of Bitcoin soaring in the near future, hence from an investment perspective, users should buy Bitcoins now. However, as per the use of Bitcoins, India is yet to come out with a mandate deciding the future of Bitcoins in India. Although initially several government bodies had their concerns with the usage of Bitcoin, currently the transactions are not illegal in India. Furthermore, the wait is still on for the final stand of the government on Bitcoin transactions.
Despite those concerns though, it’s clear that for people who are being careful and following the trends and news closely, there is a definite opportunity in Bitcoin today, though whoever is left holding them after the value drops is in for a huge loss.