yeah, Bitcoin and its underlying technology are not just simple mathematics equations of addition and subtraction. But more off a complex structures in Chemistry like bonds and van der walls force. I realized that I knew absolutely nothing about it except the fact that RBI is now getting involved and it has something to do with anonymous digital currency.
Now it is the necessity to understand this technology otherwise you’ll become outdated and even oldies can make fun of you ;-). let’s start with basics first —
What is Bitcoin: Bitcoin is the first decentralized cryptocurrency which is powered by blockchain. It was invented by an anonymous programmer named Satoshi Nakamoto. Bitcoin is a digital currency. Unlike the rupee or dollar, it can not be held or stored physically. It is used as the medium of transaction which is completely digital in nature.
But why : There is no intermediary between sender and receiver and thus no charges for middlemen,this reduces dependency and increases control. (BANK boomers get lost)Nobody can tell you that credit card charges for carrying out transaction and Inflation has no effect on it.
Blockchain: is a distributed ledger system that records the data in a network of servers rather than in one place and allows anyone to access these data.It records every data that has ever appeared in transaction eg. entry: X given 5 bitcoin to Y. this entry will be populated into central ledger.
CAUTION!: this entry is irreversible so please check beforehand and you already eliminated bank,aren’t you.
Decentralization: is a method of hosting data and powering systems through a vast network of stakeholders, not letting one entity controls the systems.
But why: Because nobody trusts anyone,in this way after every transactions it will be compared with all the nodes and if there is any error or tries to cheat it is caught.Very much similar to POKER ;-)
Cryptocurrency: is a digital commodity that facilitates the transaction of products and services using Encryptions. It doesn’t require a mediator to carry out a transaction .In this way transactions will be encrypted and nobody can sniff information about sender and receiver account number .
But this Digital thing will amount for network delays:
This means that it won’t always receive the transactions requests in same order. such as -entry 1 for A can be entry 3 for B- HOW will you solve this problem BITCOIN — -It’s actually by solving math problem , the person who solves this math problem of encrypting hashes of the details will add block to this chain and will get bitcoin for free. which is also called Bitcoin Mining and this way block of chain continues… and everything is in sync.
Legal or Illegal debate: News Media has portrayed the digital currency as dreadful which is not true.In India, Cryptocurrency is legal that means trading of it absolutely legal BUT cryptocurrency is still illegal tender of money. Meaning. you can’t go to market and buy groceries with exchange of bitcoins you have to offer INR just like you can’t buy with shares or dollars.
How many cryptocurrencies there: 4000+ because key software to create cryptocurrency is open-source which means anyone and everyone can create them(namecoin,litecoin,mazacoin etc.) to name a few.Most importantly DOGECOIN- cryptocurrency that started as meme it has now became mainstream. In 2013, two engineers created them as a joke and their aim was to make fun of how people will invest in anything and guess what people just did that.
How to invest : you can use platforms like wazirx,nuo,coinswitch do KYC and add money to it through bank account, and through that you can buy the bitcoin or fractional part of it unlike shares eg.0.0001 BTC .After that you will receive bitcoin address which will be known to every system of bitcoin network and start investing.By holding bitcoins just like money you can also earn interest too.
But in the end, you’re not just investing you are also gambling and if you are ready to gamble you must also be prepared to win or loose.