What is bitcoin and how does it work?

 

What is bitcoin and how does it work?

Hello friends, welcome to
thebetterlives.com . Bitcoin is the top word in Google's search every year, and what is the reason that this word is the most searched and what is bitcoin in actual?

Understand in a simple way without any technical word and complexity. If you see why anyone owes you money?

Anyone Gives you any money only when you add a value in exchange for it or do something. In the office too, you get salary only when you do some work. When you add a value to that company.

A shopkeeper also gets money only when someone gives goods in return. In fact, if you look in the whole world, then it is same you will get some money only if you add some value or do some work.

In one way money is equal to value and time to time money is represented in different ways. In earlier times, people used to work by giving grains or wheat.

But gradually people started to mind things that do not deteriorate over time and have good value such as gold. But it was not easy to keep gold either. Then the government gave you an option, so that you do not have to carry gold.

You can deposit or deposit your gold with the government and in return you will get a receipt or receipt. On the basis of which you can conduct transactions. Then the same receipts were later converted into paper money and then the people later relied on the promises of the government instead of representing the money.

I promise to give that much amount to the holder, through this promise, the government has told that when you go somewhere with this note, you will get value. But if this is the case then why does the government not solve the problems of the people by printing notes.

For example, suppose one kilo of potatoes is left in a shop and all the people who take it have $100000, then they will get those potatoes with more than one lakh $$, then the price of potato is more than one lakh $$. Has gone. Similarly, even if the government gives a note, it will not solve any problem.

This will only increase the price, the problem will be opened only when there is a supply of resources. Then slowly paper money started converting or converting to digital money. But the biggest challenge in digital money too was to keep track of transactions as well.

If money has been deducted in your account, then reach the other's account and it is not that the money reaches other's account and money is not deducted in your account. So a centralized bank system was created to keep track of all these things. But there is also a lot of challenge that the money you save in the bank and the money that the bank invests and if there is any loss in that investment, then your money comes at risk.

As happened at PMC Bank, people were not able to withdraw their own money from the bank. In 2008, when Lehman Brothers was at a loss, which is a financial institute, the global global level had come to a halt. If everybody starts asking for their money from the bank together in today's date, then the bank cannot give it. The balance that shows in your account is a number in actuals.

Whose Existence Bank rotates the money and maintains it. In one way, you are giving control of your money to another. There is a problem of transparency and because some selected institutes are controlling the money in it. So corruption is also included in this and if the government wants, it can also remove the legal status of your money.

As we saw in the demonetization. A document was published in October 2008 and it is who published it called his name Satoshi Nakamoto and till date it was not known who it was. So this pertinent document proved how to replace our current banking system with Bitcoin currency. What is the meaning of this?

This means that an alternative can also be seen to maintain the current which is maintaining all the records of our banking system and make sure that the transaction is successful. Through the Bitcoin currency, many such crypto currencies have entered the market. But here we will take the example of bitcoin.

When you buy a product or do a transaction from Paytm, you get some rewards. If that review starts to be used outside and if someone starts accepting it, then its value will increase. The same thing happens in the case of bitcoin. Bitcoin is a cryptocurrency, at what level will its exit be in the future, let's see how it has such exceptions and how people are accepting it and where are they executing?

Bitcoin is a digital crypto currency. It has no physical presence. When you buy this coin, it means that you buy a specific address. Through which you transact at another specific bitcoin address. Bitcoin is an automatic structure on which you do not have to do any programming or decoding. Its algorithm also runs on auto color. But systems and computers are also required to run algorithms and thousands of computers will be required at such a large level and a third party will also be needed to maintain these thousands of computers.

But if the third party is involved, then the matter will revolve around the banked structure and all control will go to a third party and the concept of bitcoin mining came to avoid this thing. People put their computers in it and run algorithms and when the transaction is successful, you get bitcoins because the whole system is in one go. So there is no problem like going to any institute or entity, going to power or getting hacked.

If Bitcoin Miners continues to generate bitcoins like this, then the matter will revolve around what I explained to you in the potato example, inflation will increase. To avoid this, it is confirmed that no more than 21 million bitcoins will be generated. Because how many Bitcoin Minors will get in the form of Bitcoin Rewards, it depends on how many people are mining Bitcoin with computers.

In 2009, you could generate two or three bitcoins by taking a computer. But in today's time, if you have to generate bitcoins, then it will take you 150 or 200 years.

Now, let's understand what is the Disadvantage of Bitcoin?

Bitcoin is not accepted everywhere and the other thing is not the government's involvement in it, so there are a lot of illegal activities in it and the third thing is that it is very volatile. Its value changes every 30 seconds. Suppose you have bought a product and you have to return it. In the same time, its price change will have taken place. The problem will come in front of the shopkeeper, how much money he has to pay in the return? Because there is no mechanism for this thing, it may be because it is an open source. Later on, some mechanism can be formed in this.

The more important thing than everything is whether bitcoin is legal in India or not?

The answer is bitcoin legal in India, but governments do not recognize it. This means if you are trading or purchasing in it then you will have all the risk in it. The government is working to make its regulations. But none of his income has come yet. On 5 April 2018, RBI issued a notice to all the banks, in which it was stated that you should not give your service to all the entities dealing in crypto currency.

That is, we cannot withdraw all our money from the crypto currency exchange to the bank. Then this cryptocurrency was challenged in the Supreme Court and the case ran for 2 years and won this case. Cryptocurrency again RBI had to remove its guidelines.

You can use bitcoin in two ways, one, you can transact in it. But in that your dependency will be on the other whether he will accept bitcoin or not. Second, you can invest in it, in 2009 you could buy a bitcoin for $ 0.09. Today the price of one bitcoin is more than ₹ 1800000. So it has a higher return of investment. Because it has a higher return of investment, it is also a higher risk. If you invest in it to fulfill your dream of becoming rich overnight, then your loss is sure to happen.

Let's talk is it worth investing in bitcoin or any cryptocurrency currency?

Those people who do not know about the market of bitcoin, tell those people that bitcoin is just a small part of the market. This whole market is called cryptocurrency market. If you have general knowledge about the stock market, then for example, shares like Tata Steel and share of share market like Tata Steel and not the entire stock market is Tata Steel, Bitcoin is just a currency. Apart from this, currency is available in the form of a lot of investment options within the crypto market. 

Ethereum, Litecoin, Ripple, Tron, Steller Vagerh are quite popular in this. If you look at the statistical analysis, then the investment of each currency should be done in a different way. Some are good for short term and some for long term. There is definitely some scrutiny in the stock market and in the cryptomarket. The biggest difference in this is that a centralized laser is used to hold all the records in the stock market and a distributed laser in a cryptomarket. Apart from this, you can know a lot of information through Google.

But if you invest in Smart Li, then you can also earn a lot from it. Elon Musk, Mike Tyson, Messi, Facebook, JP Mall in Chase, PayPal, all these big entities have invested in it and you can invest in crypto currency if you want too. There are different cryptocurrency exchanges in India, one of which is Coinswitch Kubera in which you can trade in different cryptocurrencies.
Thank you