Bitcoin was a nonexistent term in the past but now it is catching up really fast and grabbing everyone’s interest. Bitcoin is a cryptocurrency, well what is that? It is virtual money based on the technique of cryptography, not owned by any individual, corporation or government. It simplifies payments, money transfers, savings and investments. Handling Bitcoins involves the process of mining, which is basically like a lottery using an encryption function called hash. Lately due to the difficulties in handling processes through graphics card, now Bitcoin is handled using Bitcoin ASIC which is a chip developed for this particular process, although graphics card are still sometimes used for mining for various cryptocurrencies.
Bitcoins don’t need a bank account to be operated and can be used for anonymous purchases and since the money is not stored anywhere, it cannot be frozen by authorities. Bitcoin was earlier considered as the ideal payment system for small electronic transactions but due to transaction fees, it is being less opted for micropayments/small transactions now-a-days. There is however another feature because of which Bitcoin is not very trusted amongst other payment methods and that is the volatile nature of Bitcoins causing huge market fluctuations. There are about 17 million Bitcoins in circulation currently and the way the system was designed, Bitcoins will never exceed 21 million. Due to this, there is always more demand than supply thus causing huge price fluctuations to accommodate demand.
With this the next question that would come in your mind is – Is Bitcoin safe then? The cryptography secures Bitcoin as it does to the data from commercial banks, and other financial enterprises. It is not that there are no risks, no loopholes, nothing can exist without any risks or loopholes but the hopes of earning profits overcome the risks involved. Bitcoin is considered to be apt for most business operations due to the sudden market fluctuations and uncertainty of cryptocurrency. But the success gained from the Bitcoin operations make people gamble their luck and invest in Bitcoin.