What is Bitcoin?
Bitcoin has been known as the initial cryptocurrency that has existed for a few years. However, despite its relative popularity, this virtual currency has provoked numerous questions among its users. Where does it come from and is it absolutely legal to use such currency? What is the difference between Bitcoin and Bitcoin Cash? All these questions are well-grounded and have reasons to exist. Let us discuss the basic aspects of Bitcoin that everyone should know.
What is cryptocurrency?
Virtual currencies or, in other words, cryptocurrencies, represent the specific lines of codes that have a monetary value. These lines are produced by means of electricity and computers. Cryptocurrencies are widely known as digital currencies. Basically, there is nothing one can hold, but still, such kind of currencies can be exchanged for cash. It is essential to note that governments of different countries hold no control over the production of cryptocurrencies, and this is exactly what made these currencies so popular in the recent times.
Bitcoin represents the first ever cryptocurrency that has been invented. No one knows for sure who exactly the creator of this currency is because cryptocurrencies are often designed anonymously, but it is still known that Bitcoin as a currency first emerged in 2009 and it is supposed that its producer was of Japanese origin as he was called Satoshi Nakamoto. The creator of Bitcoin disappeared quite suddenly and simply left Bitcoin behind.
Advantages of Bitcoin: Are there any?
Bitcoin has a few advantages that can be singled out. One of the beneficial sides of Bitcoin is that it is possible to store it offline on one’s individual hardware. This procedure is known as cold storage. It is especially designed for protecting the digital currency from being misused by the third parties. This is because when the currency is kept on the World Wide Web (hot storage), chances are that it will be stolen and misused by someone. On the other hand, however, if the individual loses the information necessary to access the hardware where the bitcoins are kept, the digital currency will just be lost forever. It has been estimated that nearly $30 billion of bitcoins are already gone or have been placed somewhere else by miners or other parties. Nevertheless, Bitcoin is still a popular cryptocurrency and occupies a leading position in the rating of digital currencies.
Why Bitcoin still raises many controversial questions and remains a subject for debate?
In fact, there are different reasons that have made Bitcoin such a controversial cryptocurrency. In the period 2011-2013, for example, bitcoins were bought in great amounts by criminals who wanted to make deals without any notice of law enforcement. This resulted in the dramatic increase in the value of bitcoins. Scams are also an inseparable part of the cryptocurrency world and numerous investors lose great sums of money to scams, which are quite resourceful in making their deals.
To put it simple, both bitcoins and altcoins are associated with much controversy due to the fact that they provide the general public with the power of making money. This power, however, has always belonged to central banks. Neither police nor any financial institution can gain control over Bitcoin and other cryptocurrencies, which creates a totally new vision of the way of making and transferring money.
Why Bitcoin presents a threat?
Bitcoin is not produced by any federal bank, nor is it controlled by the governmental agencies. This means that no police or tax agency can ever track the transfer of your money from one wallet to another. And this is what presents an actual threat to the government control, policing and taxation.