BITCOIN AND HOW IT IS RELATED TO BLOCKCHAIN

Digitalization

Digitalization

The rising of digitalization brought many changes in every sector including investment. People prefer to invest digitally in the form of virtual or digital currency, which can be coined as cryptocurrency.

Crypto can be specified as secret, which means CRYPTOCURRENCY can be defined as private or hidden money. Cryptocurrency is launched by Satoshi Nakamoto. This digital currency coined CRYPTO is not only talk of the town but famous across the globe. There are several cryptocurrencies like:-

  • Bitcoin
  • Litecoin
  • Ethereum
  • Dogecoin
  • Monero etc.

Bitcoin is famous among youths and investors than any other cryptocurrency for its security and vital effect issues. Bitcoin is strong because its blockchain technology is powerful, blockchain is the crucial structure at which the building of Bitcoin resists.

So have a glance towards Bitcoin and the amazing Blockchain technology:-

Bitcoin is crypto or virtual currency which can be used for monetary transactions instead of cash. It can be used for several chores where cash is used, ex- in hotel booking, restaurants, etc. Nowadays, the value of bitcoin is 48,56,520. which makes it popular among youths. But its value is always inconsistent and unpredictable. There is 21 million Bitcoin which makes it limited. Apart from this aspect, Bitcoin is an amazing digital currency to invest in for its reliable blockchain technology.

A blockchain is a group of chains correlated with one another and stacked with each other like Russian dolls. So, just go through about it:-

When a block is filled with data, then another block is attached to it and if it will get filled then that block will be attached to another one, by this, the chain will be carried on. When a transaction is started in a blog, same time it is connected to the previous block. Every previous or prior block connected with each other in the form of a chain. So this is the reason why it is coined as blockchain.

Here a proper ledger is maintained in every computer, and every computer has a record or account of digital earning so that no one can commit fraud. And if anyone attempts a scam all records will mismatch with each other, and automatically the scammer will be grabbed.

Here may a question arise how the blockchain process is carried:-

Several persons retain the public ledger, they are provided with tough numeric solutions to solve, by which they can maintain the process or public ledger. This process is called mining and the persons who validate or maintain this process are named miners.

 

So glimpse the process at a peek:-

Blockchain-> Transaction -> proof of work -> copy of the previous block

 

Similarly,

Private digital currency-> public ledger-> maintained with several computers called block chain-> mining-> miners

This cryptocurrency is strongly associated with a coded system called cryptography which protects the system with coding so that its privacy can be sustained.

Blockchain is a revolutionary technique that can be used in several aspects apart from cryptography like healthcare, education, land allocation, data management, etc.

 

Advantages and disadvantages:-

  • Cryptocurrency is virtual so it can be regulated anywhere and anytime.
  • It is decentralized which means no govt. or no individual can control this process.
  • Cryptocurrency can’t be affected by inflation.

 

Disadvantages:-

  • As there is no govt. authority upon it, which means it can be used for unethical means like terrorism and money laundering.
  • It is not eco-friendly as it uses a lot of resources like power and electricity.
  • As stated earlier its value is not fixed, because its value is regulated by investors. For example when Elon Musk declared in March that Bitcoin will be accepted in Tesla, suddenly its value arises. But when he again announced that Tesla will not further accept Bitcoin, Bitcoin value has sudden fall. This fall of cryptocurrency is tagged as MUSK DIP.
  • SO, if you prefer investing in Cryptocurrencies like Bitcoin, Dogecoin, etc. perform simple tasks.
  • Start slow, do proper research where and how to invest, then analyze your risk-taking capacity.
  • These steps are very important as they say:-
  • If you miss an opportunity there is a loss, secondly, if you invest without proper research then there will be also a loss.
  • In many countries it is illegal. In India, you can invest, hold or trade but you can’t use it as a legal tender of money like buying or selling. Bill Gates termed this currency as digital gold and currency of the future. While Warren Buffet stated it as a bubble. So invest in it according to your proper research.
  • So slowly and move ahead carefully.