We all are aware that different countries have their currency. It is paper currency and is universally accepted. Not to mention the US dollar, Euro, Pound, and Yen are heavyweights in the global economy. However, the whole world’s currency valuation is associated with the US dollar in the economic world. All countries agree with their currency valuation around the US dollar in the day to day market. When the supply of a particular currency of that country goes up, the currency’s value falls. On the other hand, if exports are high and the dollars are inflow more, the currency strengthens.
Highest and Lowest
Iranian riyal is the least valued currency in the world. That means more dollars are going out of Iran than coming in. The Kuwaiti dinar has the most value against the dollar. (You will get only 0.3 Kuwaiti dinars if you give 1 US dollar)
As we move forward to the future, many countries have adopted cashless transaction systems. Sweden is said to be the country that is not using any paper currency. They have gone all cashless. China and the United Kingdom follow them. With more and more people using technology, they lean more towards cashless transactions considering many advantages of it. Especially in the pandemic period, when people are not safe going outside, there is a huge boom in cashless transactions.
What is Bitcoin?
Here came “cryptocurrency” in the picture. The first to come was “Bitcoin.” Satoshi Nakamoto is or are the persons behind the creation of bitcoin. No one is aware of who Nakamoto is, but the concept was proposed back in 2008 – ‘Bitcoin: A Peer-to-Peer Electronic Cash System.’ As suggested by the bitcoins website, ‘identity of bitcoins ‘ is as relevant as the person who invented paper.’ Hence it didn’t matter though Nakamoto left the project in 2010.
How do Bitcoin works?
Bitcoin is a decentralized digital currency. Those in the crypto market know the bitcoin is the largest cryptocurrency in the market and is most desired by aspirants. Nobody or organization controls the bitcoin transactions which regulate or govern. It’s purely Peer-to-Peer, meaning that you can send bitcoin to other people on the network without any third party or intermediaries. It is a legitimate transaction between the buyer and the purchaser. Note the point is that bitcoin is ‘virtual currency’ means no physical, tangible bitcoins exist. There are no metal coins that you can hold in hand or pocket. Every bitcoin is created electronically.
It is the same as other currencies, and one can purchase or sell goods and services with those who accept bitcoin as a currency. One must remember that the transaction cannot be completed until at least 50% of the network machines have verified it.
Once the transaction is completed, it is mingled with other completed transactions into a block. After that, the procedure of creating a ‘hash’ (unique signature) is carried out. The ‘hash’ is a very important key factor as it contains all transaction data in one particular block converted to readable and easily-distinguishable code. Post’ hash’ in a block, it is broadcast to the network for verification. When the verification is completed, it is added to the ‘Blockchain.’ Everyone on the network can now see this as ‘Blockchain’ is a public ledger.
It collects the bitcoin transactions from the block and generates a ‘hash’ for that block. This task is carried out by miners with computers called ‘mining nodes.’ Put ‘block’ is a collection of transactions that are grouped by the miners. There is a reward system for miners to generate ‘hash’ for a new block of transactions.
There is always a challenge in storing digital data due to the threat of hacking. Remember, hackers, are highly skilled in terms of hacking. There are more unofficial hackers than legitimate ones. If accidentally your bitcoins are stolen, then the possibility of getting them back is nil. Hence one must understand and study the risk of bitcoins possession and take proactive measures to protect the bitcoins before going forward.
The best way to store bitcoin is to use a hardware wallet, multi-signature wallet, or a cold storage wallet. You need to generate the ‘seed recovery phrase’ of the wallet and use it as a backup. You can have multiple ‘seed phrases’ using a pencil and paper and store them at different places. The ideal is to back up your wallet with a ‘full node.’ It is also essential to confirm your backup is available and is in good condition.
However, you will not know how many bitcoins you received by having a ‘seed phrase’ as it is only ‘private keys.’ When you receive gold coins or cash notes, you tend to verify their validity. The same applies to bitcoin transactions, which you can do through ‘wallet software.’ Ideally, software known as ‘full node’ is preferred as it verifies bitcoin rules independently. This software will check that the bitcoin payments done to you are real. The wallet software also needs to learn the history and balance of its wallet. Using ‘full node’ software will directly connect you to the bitcoin peer-to-peer network and downloads the entire Blockchain for you.
Your private keys are your money in bitcoin. It has to be safe. Any hacking or malware to your private keys poses a big threat of irrecoverable loss. Mostly private computers are more prone to malware, so this must be taken care of if you are working bitcoin through your private computer. On getting a ‘seed phrase,’ it is also essential to store it in the right, secret place to prevent it from stealing and protecting ‘seed phrase’ though a passphrase is always a smart way to protect your private keys. Never store the passphrase in any electronic device of yours like a website or internet-linked page etc.
Purchase of bitcoin
There are many platforms available if you wish to buy bitcoin. First, you need to download the ‘Bitcoin wallet.’ Here your bitcoins will be stored and used during transactions. You can buy bitcoin through the traditional bank transfer method, credit, or debit cards called the exchange of bitcoins as it will come from another person. Following are some best platforms from where you can buy bitcoin –
- Square Cash
- Coinbase Pro
Bitcoin being a cryptocurrency, one must ensure the trading is done most safely. Online transactions are most prone to hacking as hackers get your details first and then steal your money. The current safest ways to buy bitcoin is through
- Fiat to Bitcoin exchanges
- Use a peer-to-peer platform
- ATM action
- Bitcoin Debit Kiosks
- Use of a credit card
Previous Bitcoin gift card service, now Bitit, makes bitcoins available in more than 100,000 retail stores. If one wants to buy bitcoin instantly, he can follow the below steps for faster purchase of bitcoin –
- Make a ‘Coinbase’ account
- Go to account settings
- Click “Credit/Debit” card
- Enter the required information
- Confirmation will come
- Buy bitcoins
- Login to your account
- Verify your identity
One can also exchange cash against the bitcoins in the wallet. You need to search for a buyer, and if one is available, you can fix the rate at which you want to sell the bitcoin/s. upon mutual agreement, you can proceed to receive the cash in exchange for your possessed bitcoins.
It is assumed that cryptocurrency is the future of the economic world, so if you have wealth and the safest ways to buy and store bitcoins, it’s worth going for the trading. Also, you need to remember that just buying bitcoins may not keep it safe, so one must have great knowledge and ability to protect trade and grow wealth through bitcoin.