WHAT IS BITCOIN MINING, CRYPTOCURRENCY AND WHAT THERE ADVANTAGES AND DISADVANTAGES
The cryptocurrency is a digital currency and verified by decentralized system with blockchain technology. Its first currency is Bitcoin.
CRYPTOCURRENCY
A digital currency in which transaction are verified and recorded by decentralized system using
cryptography. It is not maintained centralized authority. Cryptocurrencies work using a technology called blockchain technology.
Any kind of finance institute does not control the cryptocurrency.
BITCOIN
Bitcoin is the first and decentralized cryptocurrency, which is made specially for digital market or world. It can be used by any person whenever, wherever. By bitcoin, any person can transfer money to person, and for it there is no need of Bank or third party agency.
Cryptocurrency was created for people to control their money themselves without having to rely on companies, bank or governments and their help and controls. The value of coin were decreasing rapidly. In 2009, the so called Satoshi Nakamoto a japanese (claimed) whose identity is still secret, created first ever and most popular cryptocurrency called Bitcoin.
Bitcoin are not only cryptocurrency, but also there are more than 4000 cryptocurrencies, there few names like Litecoin, Ethereum, Cardano, Binance coin, Ripple, Dogecoin, Tron, Bitcoin cash and Zcash.
Many companies and countries are accepting cryptocurrency and many companies and countries believe that is a fraud. Because like as everything, cryptocurrency has advantages and disadvantages itself. Due to its decentralization, cryptocurrency is used by many terrorists and frauds, scam and in many other illegal activities. Some countries like Turkey, Bolivia and North Macedonia have banned the cryptocurrency, and North Macedonia is only European country that has banned cryptocurrency.
ADVANTAGES AND DISADVANTAGES OF CRYPTOCURRENCY
ADVANTAGES
- Decentralization:- Cryptocurrency is decentralized, it doesn't follow traditional system. There is not any control of any particular agency on this currency.
- Global usage:- This currency can be used internationally, cryptocurrencies are being accepted by many super markets as form of payments.
- Low operational cost:- It transaction fee is very low, if we transact money through banking system, then we have to give 1% to 2% as a transaction fee. People prefer that international payments should be paid by crypto.
- Unlimited number of transaction:- There is a limit to transact money in banking system, but in cryptocurrency, unlimited number of transaction can be transacted.
- Transparency:- Bitcoin transaction are public, traceable, permanently stored in the Bitcoin network.
- Highly secured:- The cryptocurrency can't be Hacked, because it follows the cryptography.
- Lack of knowledge of people:- Some people don't know what the cryptocurrency is actually, but in future everybody can understand and invest in it.
- Volatility:- Its value is volatile due to which its value can move up or down aggressively.
- Risk of money lost:- As you know that in banking system there is authority that can help you, if you are scammed. But in cryptocurrency, there is not any kind of authority that help you, if you're scammed.
- Not accepted widely:- Because of lack of knowledge, people don't want to do business with cryptocurrency. But in now days people are understanding crypto and accepting it.
THE VALUE OF BITCOIN IS VOLATILE
The value of Bitcoins are influenced by the bitcoin's demand in market and the supply of bitcoin.
If interest of people for Bitcoin is increasing then its value will also increase, if the interest people for Bitcoin is decreasing then the value of Bitcoin will decrease.
There are only 21 million bitcoins that can be mined in total.
As you know the blockchain technology makes the Bitcoin decentralized, but now here we are going to know how blockchain technology works. Blockchain is a digital record of transaction and its main functions are to prevent data get after, change or distributed to unauthorized party. Or in other words, blockchain is a growing list of records, called blocks. Of previous block, each block contains a cryptography hash. Blockchain also contains all transaction data, and that are the main things that make cryptocurrency protected.
As you know the cryptocurrencies work using technology called blockchain technology, there are many nodes (computers) in blockchain, and all nodes (computers) have all copy of all transaction due to which any transaction could be verified at anytime. The nodes are run by miners.
It means that the function of bitcoin miners get bitcoin as a reward for completing blocks of verified transactions which are added to blockchain.
GPU(graphics processing unit) is also used to verify the transaction by miner to get bitcoin as a reward. Miners set many graphics cards (GPU) parallelly and connect them and supply electricity in them to process the transaction.
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