Lately, the crypto currency Bitcoin has made the news, particularly late last, year when Chinese investors bought up vast amounts of bitcoin following the fall in the value of the Yuan.
The price of bitcoin has been unstable since 2013. At that time one bitcoin was worth between $10 and $15 dollars. The same year, the value shot up to over $1000 dollars, fell to around $200, rose again to over $800. The ease of transaction, anonymity, and simplicity has certainly made bitcoin popular among many investors. However, it is likely that the Chinese Central Bank that caused the latest tumble in bitcoin value. When bitcoin reached an all-time high of over $1100 because of strong Chinese investment, the Chinese Central bank stepped in and announced that it would be investigating bitcoin transactions. Many have been highlighting potential bitcoin links to money laundering and illegal financial transactions.
Bitcoin is not the only crypto-currency, and following its sharp rise in value, other crypto-currency creators have tried to get a slice of the crypto-currency market.
What is Bitcoin
Bitcoin is a decentralised internet currency. Bitcoins can be used for transactions online. Countless business all over the world now accept bitcoins. Interestingly, bitcoin transactions do not require any involvement from a bank. Consequently, bitcoins can be traded directly from person to person without the need for a bank account. This has been hailed as a revolution by many, however, on the flip-side, many experts fear that bitcoin’s lack of regulation leaves this currency wide open to illegal practices. The legality of bitcoin varies from country to country. Bitcoin trading is legal in some countries while banned in others.
Bitcoin has, however, so far been able to withstand criticism and continues to gather momentum among businesses as well as consumers.
Today, you can buy thousands of products online using bitcoin. If you check out websites like Bitstarz, an online casino, and check out payment options, you will see bitcoin in the drop down menu. The same applies to thousands of other websites.
How Are Bitcoins Generated
Businesses all over the internet are generating bitcoin by running a free application called bitcoin miner. The application transforms services or products into bitcoins using a specific, pre-designed, and predictable system.
Generated bitcoins are then stored in a bitcoin wallet and can be used for the purchase of products or services. Bitcoins can also be turned into cash, however options are limited.
The creators of bitcoin and other crypto-currencies continually highlight low transaction fees and ease of use as the main advantages of bitcoin. Bitcoin does not require you to fill out lengthy forms or pay hefty transaction charges.
Banks have obviously been less than enthusiastic about bitcoin. In essence, bitcoin has managed to facilitate transactions without the involvement of banks which must be one of the most revolutionary moves in the history of finance.
It remains to be seen how heavily governments will regulate bitcoins and other crypto currencies. The hope remains that these currencies will not get flooded by illegal activity and will go the distance.