How Does Bitcoins Work?
The decentralized form of currency, Bitcoin raises several questions of credibility in the mind of the investors. Every time someone makes an investment, they are riddled by the credibility of the virtual currency system, and what if it all turns into hocus-pocus.
No doubt Bitcoin has made accumulation of wealth easier, transaction easier, and does not bind the possessors to tax payment of any kind. But this also makes it a form of unregulated wealth. Any money that is unaccounted for, and is unsupervised by any central authority runs the risk of vanishing without leaving any leads.
Investors from across the world have invested billions of dollars in mining and collecting Bitcoins through various platforms like bitcoinchampion with a hope to accumulate a large enough wealth to sustain themselves.
How does Blockchain Technology provide security to the Cryptocurrencies?
The Blockchain Technology helps in maintaining a public record of all the Cryptocurrency transactions made. Even though there is anonymity maintained while keeping the records, with no name and email of the people mentioned, any breach of ownership would mean the jeopardizing of everyone’s identity revelation.
When a crypto transaction takes place involving few people, all of them will have information regarding their final amount post transaction. This way, any transaction will be deemed invalid in case the sender does not have enough currency in their wallet, which the other members are, by then, aware of. Each transaction will be encrypted in a separate block, and all these blocks together will form a ledger. This ledger will be out there as a public record.
The Blockchain Technology ensures there is no counterfeited currency into the system. Each wallet will show the authentic number of currency held in it. Nobody can increase the number of Bitcoins in their wallet by any other means than earning, buying, or mining. The Blockchain Technology also bars the involvement of any financial institution.
This prevents any failure in payment due to a problem in the system of the abovementioned institution. Blockchain ensures direct, hassle-free, and speedy transaction of cryptocurrencies from one account to another. The use of a complex encryption algorithm made by the Blockchain Technology ensures that no third party can encroach into any crypto wallet, and steal their Bitcoins. The complex algorithms keep hackers and fraudsters away.
Why will Bitcoins not vanish one day?
For a decentralized currency, unrecognized by any government and authority, Bitcoins and other Cryptocurrencies have a strict code of regulation among themselves. To be able to mine 12.5 Bitcoins, one has to solve an entire complex encryption algorithm. Accumulation of Bitcoins is not as easy as it seems if you are not investing in it. There are various applications available to help one invest in Bitcoins.
When a transaction happens, all information regarding the transaction is encrypted on a block. Each block has its own unique address. If the transaction is to take place between four people, sending each other Bitcoins, the series of transactions will form a chain. This series of transactions, forming a chain will be known as the ledger. The details of each separate transaction will be publicly recorded. With the help of the public key, one will be able to access such information as it is provided in the public ledger. However, to be able to make transactions from one’s own account, one needs to use their very own private key. The private key is somewhat like a password. The public key, which is also unique for each individual, is shared in the public record, much akin to the concept of email addresses.
In conclusion, the vanishing of Bitcoin from the market one fine day is an absurd idea. With such a technology at use, it is highly unlikely that Bitcoins will stop faring well one fine day, or will be hacked and abolished from the face of the earth. The number of Bitcoin investors, though a minority in the world, is increasing by the day. The number has grown ever since the value of Bitcoin peaked in 2013, and people are hopeful of a future where transaction through Cryptocurrency will be a real thing.