- What is Bitcoin and what is its use?
- What effect does bitcoin have on the financial system?
- Will Bitcoin run out?
- Who is Satoshi Nakamoto?
Bitcoin is a type of digital currency that was created in 2008 and entered the world economy. In early 2018, when the price of Bitcoin reached 13,000 dollars, this currency gained great fame and prosperity.
Bitcoin was a combination of creativity, overcoming legal barriers and eliminating middlemen in various financial and banking affairs that made financial transactions possible on an international level. Because of this, he was able to attract a lot of attention to himself in a short period of time. In order to fully familiarize yourself with these concepts, you can participate in the digital currency course of the Academy.
When does the history of Bitcoin go back?
It is said that the creator of Bitcoin is a person named “Satoshi Nakomoto”. It is not clear whether Satoshi Nakumoto is really a person or a group of people who started producing Bitcoin under this name.
About the identity of Satoshi, it has been said that he is a Japanese person born in April 1975. Of course, in his published works, Satoshi has used British English without any problems, which has raised doubts about his Japanese identity.
On the other hand, according to the timing of Satoshi’s posts, it is assumed that he did not post at midnight GMT, which makes it more likely that Satoshi is English.
After the birth of Bitcoin, there was no more news from Satoshi Nakumoto. Some time later, other cryptocurrencies such as “Litecoin”, “Ethereum” and… were also introduced to the world.
What is Bitcoin backing?
Before August 15, 1971, most of the world’s currencies were backed by gold and silver. Before the advent of paper money, coins were made of precious metals and their popularity was high among the public.
But metal, goods or valuable items are not the basis of Bitcoin, and in fact its value is only due to people’s opinion on the value of Bitcoin. The same argument holds true for the US dollar, the British pound, the euro, and all modern currencies.
◊ Also read this article: Free price action training from zero to one hundred
How Bitcoin works
Bitcoin is a digital asset implemented on the blockchain network. Blockchain is an information sharing system where everyone in the network has access to the information stored in the ledger.
In the banking system, only the bank knows about the asset transfer and all its details, but in the blockchain, this information is recorded in a central ledger that everyone has access to.
In each sharing, the sender’s code, the receiver’s code and the amount sent are specified and recorded in the book, and it is possible to refer to it forever. The current size of the Bitcoin ledger has reached more than 320 GB.
Each wallet has a strong security system consisting of two codes, a private key and a public key. Every transaction that takes place in the cryptocurrency network is signed with your private key, which is generated based on a very strong cryptographic system.
It should be noted that only you have access to the private key, but once the transaction is registered in the central office, people can view that transaction based on the public key.
Advantages and disadvantages of Bitcoin
High security, digitality and no need for storage space, non-taxation, transaction guarantee, high transaction speed, and low fees are some of the advantages of Bitcoin.
The lack of specific institutional oversight is one of the disadvantages of Bitcoin, because in case of problems, no body will be accountable to the people who have invested their money in Bitcoin.
Applications of Bitcoin in today’s world
Buying goods and services: Today, you can use Bitcoin to buy many goods and services you need.
Investment: By acquiring enough knowledge about Bitcoin and the technology governing it, you can invest your money in Bitcoin.
Money transfer: Another use of Bitcoin is to use it to exchange money in different parts of the world. This is especially useful during sanctions.
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The impact of Bitcoin on the world financial system
Bitcoin has created new conditions in the world economy, some of which can be mentioned:
1. Eliminate the central bank to create money
2. Removing the focus of the economy on gold
3. Controlling the devaluation of the dollar and inflation
Factors affecting the price of Bitcoin
Among the factors affecting the price of Bitcoin are:
- Bitcoin supply and demand
- Government laws regarding Bitcoin
- News coverage in news and media
- The spread of other cryptocurrencies
- The amount of credit and acceptability of Bitcoin
Steps to buy Bitcoin
To be able to enter the cycle of Bitcoin transactions, you must go through these steps:
- Install a cryptocurrency wallet
- Find a reputable Bitcoin dealer
- Choose a bitcoin exchange in Iran
- Authenticate on the online exchange site
- Transfer the money to the seller and also provide your wallet address
- Receive bitcoins from the seller and transfer them to your wallet
- Back up your wallet
How to get free bitcoins?
Creating and encrypting Bitcoin is an extremely heavy process and requires powerful equipment. For this reason, few people are able to mine Bitcoin. Of course, there are services on the Internet that give you free bitcoins in exchange for what you do.
Some of these services include: Crypto Tab Browser, adBTC website, BIT FUN website, CLAIM FREE BTC website, SatishiHero website, Earnings-Club website and so on. Also, in an article, Rahvard team has explained in detail the method of obtaining free digital currency.
◊ Also read this article: Free digital currency training from zero to one hundred
Bitcoin in Iran
A number of Iranian digital currency exchanges have been launched to deal with sanctions and provide a safe environment for transactions in Iran. Trading through Bitcoin means dealing with sanctions and meeting domestic needs without the need for currencies like dollars.
The liberation of the country from the economic crisis and dealing with sanctions through the use of Bitcoin has multiplied the importance of Bitcoin for Iran. Currently, about 4.5% of the world’s Bitcoin mining is done in Iran.
The opinion of the world’s financial giants regarding the future of Bitcoin
Elon Musk (CEO of Tesla): One day, paper money will be removed and digital currency will perform much better than it in transferring value. Bitcoin is another example of fashionable human behavior; Because currently, buying it requires a lot of money.
Warren Buffett (prominent economist and investor): Regarding cryptocurrencies, I can say with almost certainty that they will have a bad end. If you are buying an asset only because of its past growth, this is not a good reason to buy at all and will cause you problems.
Bill Gates (founder of Microsoft): I think it’s a forced thrill ride, but governments want to dominate its privacy. Bitcoin is better than traditional currencies because you don’t have to physically carry it.
Jack Ma (founder of Alibaba): Bitcoin is winning against the bank. For blockchain, being a bubble is not the case because blockchain has the ability to change the world more than people imagine and provide a solution to information security.
Frequently asked questions about Bitcoin
Where does bitcoin come from?
Bitcoin is born through the process of mining. To buy and sell Bitcoin, it is necessary to solve a series of mathematical equations that confirm the financial transaction between people. These transactions are solved by people called miners.
Miners are individuals or organizations that solve network equations through very powerful computers. The network also rewards these people in the form of bitcoins in exchange for solving the equations. In this way, the Bitcoin cycle is complete.
Is there a tax on buying and selling bitcoins?
Since governments have not yet been able to formulate coherent laws regarding Bitcoin and other digital currencies, therefore, these assets are not yet subject to taxation.
What will happen after all bitcoins are mined?
Probably, the last bitcoin will be mined in 2140 AD. Once 21 million bitcoins have been created, no new bitcoins can be created in any way. Of course, this does not mean that the entire Bitcoin network will collapse that year. Because in addition to Bitcoin mining rewards, there are also transaction fees.
Of course, these fees are not very high compared to the 12.5 bitcoin reward that miners receive for each block, but it is highly likely that when the reward for mining each bitcoin decreases, transaction fees will increase.
In this way, transaction fees should be high enough to encourage miners to continue working. This is why even after Bitcoin mining is finished, miners will earn their income from transaction fees.
Can Governments Ban Bitcoin?
Different governments in different countries still don’t know how to react to Bitcoin. Some of them seek to limit its effects by banning activities in this field, and others try to understand Bitcoin better and, knowing it, make the most of its features and capacities.
Is it possible to destroy Bitcoin?
From a technical perspective, Bitcoin is alive as long as a large number of computers on the same network host the Bitcoin software engine. Only one complex scenario can lead to its destruction, and that is that the community of cryptocurrencies destroys itself with greed and negligence; Otherwise, Bitcoin will be the top cryptocurrency in the coming years.
Can Bitcoin be hacked?
Bitcoin is a digital currency that is implemented on the platform of blockchain technology in a completely “decentralized” way. In fact, there are no centralized computers and servers to break into in the Bitcoin network. Security and resistance to hacking is one of the advantages of Bitcoin and other digital currencies over fiat currencies.
Is bitcoin legal?
Bitcoin is not backed by governments or central powers. For this reason, governments have not considered it as an official commodity, and in fact, Bitcoin is not considered a common and legal currency.
Does Bitcoin have intrinsic value?
As we mentioned in the previous sections, the value of Bitcoin is only due to people’s opinion on its value. The same argument holds true for the US dollar, the British pound, the euro, and all modern currencies.
Who controls Bitcoin?
So far, no coherent regulatory body has been formed to control and monitor Bitcoin. No one exclusively owns the Bitcoin network and Bitcoin is controlled by all its users around the world.
Conclusion
Today, the use of Bitcoin digital currency has made it possible to buy goods and services online. Also, although buying and selling Bitcoin is considered a risky investment method, but due to its unlimited volatility, it gives investors the opportunity to earn a lot of profit.
Also, you can use Bitcoin to exchange money from one part of the world to another. Financial giants have different opinions about Bitcoin. But if you want to invest in this field, we recommend that you see the necessary training and take steps in this direction with sufficient mastery and knowledge.
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