Bitcoins

What are bitcoins?

Bitcoin is a crypto-currency which basically means digital money or in other words an online wallet. One bitcoin sums up to around 40,00,000 Indian rupees. Bitcoins were created in 2008 by a man who called himself Satoshi Nakamoto. It began use in 2009. There are a limited amount of bitcoins (around 21 million) in the world.

Why are there a limited amount of bitcoins?

Bitcoins are limited because in the source code of bitcoins, it is written that it will have a limited and finite supply. Only 18 million bitcoins have been mined till now and there are still 2 million bitcoins remaining. Bitcoin mining is the process of making new bitcoins by solving computational puzzles. Not many people use bitcoins and it is even illegal in some countries.

Why are bitcoins illegal in some countries?

Bitcoins are illegal in some countries because it is said to be very insecure. They are not even made to follow the regulations of crypto-currencies around the world. They are also not used as a currency because bitcoins have a huge price volatility.

Why do bitcoins have a huge price volatility?

Bitcoins have a huge price volatility because there is a limited amount of them and as more people get to know about bitcoins the demand increases, and hence the price increases too. Bitcoins are also volatile because of the liquidity, which is the ability to but and sell quickly. Some people keep bitcoins with them and the liquidity reduces because of this, which leads to a decrease in the price.

Who uses bitcoins?

Bitcoins are mainly used by people who really benefit from them, for example computer engineers, for the rewards of mining. They are also used by libertarians, because bitcoins do not follow regulations and criminals, because they can be anonymous while buying and selling. Finally bitcoins are also used by speculators, for the volatility. Speculators are people who invest in stocks with hope to make a profit.

Is bitcoin safe to use?

Yes it is, if used correctly. A blockchain is a data structure that is used in bitcoins to keep track of how many bitcoins each person has and it also keeps it secure.

Are there other crypto-currencies?

Yes, there are more than 4,400 other crypto-currencies used today. For example, Ethereum, Litecoin, Monero, Ripple, Dash etc. Ethereum and Litecoin are the two most stable alternatives for bitcoin.

Should bitcoins be illegal or not?

There are pros and cons for bitcoins but I think that the cons overpower the pros. Bitcoins should be illegal mainly because they do not follow regulations. Regulations are a huge part of governing and politics and if they are not followed it can lead to disasters. There are also a limited supply of bitcoins so they cannot be used as a currency and bitcoins also have a huge price volatility which makes them very unpredictable.