Bitcoin: What Do You Need to Know?

30.11.1999

Many people have heard about Bitcoin, but not many of them are able to explain what Bitcoin is. Bitcoin is the most famous digital currency that can be used for buying goods and services without mediators like banks and payment systems. All transactions within the system are registered; the currency itself is produced by users’ computers as a result of solving complicated mathematical equations.

How to extract, receive cryptocurrency?

 

   The process of extracting Bitcoin is called «mining», which becomes more complex in the course of time and demands powerful computers. Bitcoin unites two features: digital currency and payment system. To appreciate investment potentials of Bitcoin, it is necessary to understand strong and weak sides of the system. It is commonly believed that the cryptocurrency has been created by the programmer (or a group of specialists) Satoshi Nakamoto.
What software do you need for work?
To begin using Bitcoin, it is necessary to install special software into your computer or a smartphone. The application allows buying and exchanging the digital currency almost instantly, but a performed transaction cannot be cancelled. Bitcoin can be used for purchasing goods, tickets and hotel booking. For small businesses it is a real catch. It allows economizing on payment systems’ commission, which is charged from every transaction. Another advantage of Bitcoin is that it is enough to have a mobile phone to perform operations with the cryptocurrency. All payments are anonymous – this aspect is beneficial for users, who are worried about their confidentiality and beware of tax authorities.

Warning!
However, the digital currency has its own disadvantages. Events proved that Bitcoin exchanges are vulnerable to hacking. The prime example is Mt. Gox exchange, which lost 650 thousand bitcoins because of a hackers’ attack. Lost funds cannot be returned as the system has no insurance liability. Btc has no regulatory authority to control the exchange rate and emission volumes. Cryptocurrency’s anonymity has attracted to the system many criminal groups, which use it for illegal activities, including money laundering and tax evasion. Nobody knows how the cryptocurrency will develop and whether it will be capable of competing with classic monetary means. In many countries cryptocurrency is considered a speculative, high risk asset. 


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