The currency is one mode of exchange that has changed throughout the time, from grains to coins, to paper & latest to digital. Currency has always looked to keep up with the pace of the world. The more efficient the money system, the easier it is to transact that eventually helps one to become rich. Having an agreed mode of transaction, played an important role in globalization. It not only changed how we transacted between the countries but also opened new avenues like remittance, credits, etc. But, the financial system was about to be changed forever. This change was not from any government or banks but by a single person or group of people with the introduction of Bitcoin (a digital currency).
Bitcoin came into the picture after the meltdown of 2008. The reason for its introduction was primarily the banks. Banks who thought they are the supreme power & can make or break government, change things or, in simple words, can rule the world. By having a centralized entity to look after your valuable is a norm in the current scenario. But, after seeing, that very central entity is corrupt & gullible. It was a necessity to search for alternatives & that alternative was introduced to the world by Satoshi Nakamoto, with the introduction of Bitcoin.
Please note that I am a nontech guy & hardly know the technical aspects of it. But, reading about different topics hooked me to bitcoin & the rise I saw from Dec 2017 to Jan 2018 made me curious about this technology which led me to read all about it. I still feel the if you want to learn about this topic you should listen to only Andreas Antonopoulos, bitcoin Jesus according to me.
What Is Bitcoin?
In layman terms, Bitcoin is the internet of money that can be transferred to others over the internet (just like email) without any intermediaries. Also, this is not owned by any bank, government or corporation.
Why Bitcoin Is Valuable For The Word
Permissionless: There is no permission required to join the network. Anyone with or without any document can join the network & send & receive bitcoin irrespective of the amount with very minimum transaction charges, definitely less than 1% of the total value send or received.
Decentralized: There is no central entity overlooking or controlling the prices of 1 bitcoins. Thus, No One actually controls it & it is not possible to inflate or deflate the value of one bitcoin. Several nodes spread across the globe are working across the clock are verifying the transaction. Thus making is truly decentralized.
Scarce: Every scarce thing is valuable hence Gold is considered an important commodity till date. Bitcoin’s total supply is limited to 21 Million & there will be no more or less than the mentioned supply. The 21 million bitcoin will be mined through the time with 1st bitcoin mined in the year 2008. it is estimated that the last bitcoin will be mined in the year 2140. As there is a limited supply it is scarce.
Expandable: In the current provision, every bitcoin can be expanded to 8 digits from the decimal. Each least one is referred to as a satoshi. So, if you are sending 0.00000001 BTC, it is equivalent to 1 satoshi. However, there is an option to increase the divisibility but that is too far from the current position.
Transaction Time: Usually, to transfer an amount across borders takes days to reach the receiver. Bitcoin transactions are confirmed on average 10 mins & hence it is super quick. Recently introduced lighting network is trying to reduce the time further. Also, transaction charges are less than 1% which is currently 3 to 5 %.
Intrinsic Value: The funny thing about the intrinsic value is, it is derived if someone else can derive the value from it. Like Gold, like fiat, the currencies that are mutually agreed on.
How to obtain Bitcoin
There are many ways through which one can own a bitcoin, exchanges like WazirX (India), Binance (world), Kucoin (world), etc are few of the existing pool of exchanges doing well.
Another method is through mining, mining is a process through which a computer solves problem & if authentic wins a few bitcoins. The reward is halved every 4 years. Currently, a miner wins 12.5 Bitcoin for solving one problem, the interesting part is rewarding will be reduced to half i.e to 6.25 this year (2020).
This is a layman guide to Bitcoin. This doesn’t cover any technical terms like blockchain, public & private keys, hash rates, & many more. However, a brief about why this is important. If interested in this technology read these books from amazon for the in-depth knowledge of the topic. On the other hand, if you are still not able to fathom why this is critical to you. Please spare a few minutes to read Currency wars by James Rickards & you will be amazed by the things you will find out.