The BitCoin – Digital Currency
Technology has been advancing at
a rapid rate in contemporary times, extending its reach to several
spheres of human life. It has become an everyday part of our lives,
simplifying our tasks and responsibilities. Now, the fiscal world has
also been touched by modern science.
While credit and debit cards
have been gradually making liquid cash redundant for a long time now, as
has online banking, the new form of the digital transaction comes in
the form of mobile wallets that is all the rage right now, amongst the
masses. They make money safer, more portable and easily available
anytime, anywhere.
What exactly is Bitcoin?
The term “digital currency”
has become very popular, of late. Well, that is exactly what Bitcoin
is. It is, basically, a virtual wallet that serves the exact same
functions as real, tangible money would. It helps the users engage in
monetary transactions, such as buying or selling goods and services, or
simply, lending or borrowing money. It eliminates the hassle of change,
banks, and credit cards from the equation. It is the safest option for
those, who deal with large sums of money, as it attracts less unwanted
attention.
The best part about Bitcoin,
however, is that since it is not affiliated with any Governments, banks,
or extra-governmental agencies or institutions, it grants the users
complete anonymity. The main grounds of distinction between Bitcoins and
conventional money, which are also the reasons why it is much safer,
are that it is decentralized, and has an open source, which, in layman’s
terms, means that the entire Bitcoin operation is controlled and
regulated by the users themselves. It is an entirely autonomous system.
Moreover, due to its
peer-to-peer interface, all forms of monetary exchange proceeds in
between the users, only. There is no regulatory authority, or
supervisory figure to compromise the privacy of the persons involved in
the exchange. The transactions are recorded in a public bookkeeping
ledger, known as a blockchain, making it easier for users.
How to Use It?
It is incredibly easy to get
started on your own Bitcoin journey. Once you are fully thorough with
the whole concept of digital currency, which is very much recommended
because it is not exactly the same as the traditional currency, the
first thing that you need to do is set up a Bitcoin wallet.
There is a whole range of quality options when it comes to Bitcoin
wallets, and you need to choose one that is compatible with computers,
or cell phones, or both, depending on your individual requirement.
Again, it is vital that you take the time to become fully aware of the
options so that you can choose the best one for you.
The next step is to input
Bitcoins in your account. You can do this by selling goods or services
in exchange for Bitcoin or buying them from an acquaintance, or by
engaging in a direct transaction with the bank, where you have an
account already. Similarly, in order to sell Bitcoins, you need to
dispose of them either in exchange for goods and services or money. Make
sure that the people you choose to send your Bitcoins too are
trustworthy because these transactions cannot be undone.
However, you must ensure the
safety of your wallet by securing it via backups, using from secure
locations, and by adopting other such safe practices.
Is it legal?
Bitcoin is not like other
virtual wallets. The terms and conditions of its use are a bit different
and slightly complicated. Bitcoin is absolutely legal in most countries
across the world, except for a few that includes Ecuador, Bangladesh,
Kyrgyzstan, and Bolivia. However, since Bitcoin is still in operation,
despite its experimental status, the rules and regulations that
accompany its use vary from country to country.
Bitcoins fall in the gray area
between monetary holdings and non-fiscal possessions. However, since it
is something that benefits the user materially and can be used as an
adequate substitute for tangible currency, it is considered taxable in
certain countries and regions. Hence, it is recommended that users of
Bitcoin, especially those who are still relatively new to the whole
practice, consult a qualified accountant to assess the tax status of
their Bitcoin accounts.
Certain countries such as Russia
and Argentina have imposed very rigid embargos on foreign currency,
even via Bitcoins. In other countries, like Thailand, restrictions have
been enacted on the licensing of transactions using Bitcoins.
The perks of using Bitcoins in a
world, where financial crimes and fraudulent activities to scam people
out of their money is on the rise, is that it is much safer. Bitcoins
cannot be duplicated so that the chances of counterfeit currency arising
on a platform like Bitcoins is no more.
How to Make Money From It?
The possibility of earning money via Bitcoin is a reality, and this can be done by something known as “Bitcoin mining” and “buying and selling”. This, essentially, entails:
· The
electricity, on which Bitcoin miners operate, earns them new Bitcoins
every ten minutes. Yes ten minutes, well that is before the currency
exploded. Now you can only mine few in a month. Everything depends
anyway on how expensive your setup is. Look at this Russian Bitcoin
Mining Farm they earn millions of dollars monthly.
· The
rate of Bitcoin mining fluctuates, due to market forces. If the demand
for Bitcoin rises, so does the price, and if the supply exceeds the
demand, the price falls. Currently, it is at 12.5 BTC for each block.
· It
is very easy to get started with Bitcoin mining. All one needs to do,
is to run software with the help of a specialized hardware.
· The
ceiling on the production of Bitcoins has strictly been set at 21
million Bitcoins. The production of Bitcoins cannot be controlled by any
intermediary forces, such as the Government, as and when they deem fit.
It is absolutely decentralized.
· Nowadays,
Bitcoin mining requires ASIC-based machines, which are very expensive
and not easily accessible. This is why the mining process has now become
difficult for individuals to achieve.
· Mining
becomes, especially fruitful when the Bitcoin prices are surging or are
expected to surge. This can allow the users to make a large profit of
margin by engaging in Bitcoin mining.
· This process is secured, as Bitcoin protocol does not process erroneous data. So, no one can corrupt the mining feed of Bitcoin.
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