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Bitcoin FAQs: Knowledge is Bliss

by Aishwarya

For the past couple of weeks, Bitcoin has been creating headlines. Is it true that Bitcoin has now taken over the digital currency? 2009 marks the start of the Bitcoin era, and since then, there has been considerable development in this zone. If we overlook the slump it has taken, Bitcoin has shown positive signs of growth. 

Bitcoin is a cryptocurrency that runs on a decentralized Blockchain-based system. It functions on peer-to-peer interaction, which means there is no third-party intervention. Also, all the transactions are encrypted, thus making cryptocurrency exchange safe. Since Bitcoin and cryptocurrency is a relatively new concept, there are many new developments and speculations around them. In this Bitcoin FAQ, we have covered several important questions pertaining to the deep and comprehensive information about cryptocurrency and bitcoin.  

Q1. How do Bitcoins work?

Bitcoin is a digital currency that runs on blockchain technology and a decentralized platform. It promotes peer-to-peer exchange. Thus, there is no third-party control over Bitcoin exchange. Hence, it often comes under scrutiny. The information is encrypted cryptographically on the Blockchain platform, thus making it a secured and safe medium of transaction. 

Q2. Who is the creator of the famous crypto – Bitcoin?

Bitcoin was first introduced by; Satoshi Nakamoto. In 2009, he came up with the concept of decentralized Bitcoin exchange to a group of acquaintances interested in cryptography. And this is how Bitcoin entered the market. 

Q3. Bitcoin, being a digital currency, is it used by people in the real world?

Bitcoin follows the decentralized way. However, they are not used in real life like money for buying and selling, as such. They are limited and have limited uses. However, there are companies that accept bitcoins for gift cards, video games, food (Bitcoin Restaurants), travel (Expedia). Many nations now have Bitcoin ATMs, for example, the US, Canada, Spain, Austria, etc.

Q4. What mechanism works behind Bitcoin?

Bitcoin is a digital currency that works on the peer-to-peer or P2P network, nullifying third-party intervention. Blockchain is the underlying technology of Bitcoin, and it works with the Proof of Work mechanism. 

Q5. Can Bitcoin be fraudulent?

There are supporters of Bitcoin, but we cannot ignore the fact that Bitcoin works on a P2P mechanism, and there is no regulating authority governing the same. Also, the identity of the participant remains anonymous; hence in case of fraud, it will be difficult to get through it. Moreover, anonymity also brings forth the use of Bitcoin under surveillance as it can be used for some illegal activities like smuggling, drug trafficking and more. 

Q6. Is the crypto market vulnerable?

Yes, it is. The Crypto market and the financial exchange are different sides of the same coin. Things with value often go up and down, and it is inevitable. The Crypto market is relatively new and is still gaining popularity. For the same reason, we can experience fluctuations a bit more.

Q7. Is Bitcoin the finest out of all the forms of cryptographic money?

Bitcoin has its varied advantages. Compared to other altcoins, Bitcoin is more trustworthy. Since it is the pioneering cryptocurrency and the oldest one, it is proffered. Its security and accessibility make it a perfect choice for your crypto investment. Increased number of software and hardware support, the high exchange rate makes it the most preferred crypto in today’s world. 

Q8. What are the components that decide the price of a Bitcoin?

Just like goods in the market, Bitcoin’s price is decided by the demand and supply formula. In July 2021, Elon Musk announced that Tesla would invest in Bitcoin, and it led to the rise in the value of Bitcoin. The price jumped past $30,000, Also, recently when Elon Musk tweeted that he is discussing the sustainability of bitcoin, the price rose around 4%.

Q9. Can there be better crypto than Bitcoin?

Well, this is difficult to say. Bitcoin is by far the best and most trusted magic internet money. There are many competitors already, and some of them are gaining popularity, like Dogecoin, Stellar, and Ethereum. The future is not predictable.

Q10. Can I become wealthy by investing in Bitcoin?

Investments can lead to more money if the investment is made at the right time, in the right thing with caution. Investors who invested initially in Bitcoins had earned a lot more than they thought.

Final thoughts

Bitcoin has its pros and cons. Before investing, one must go through the entire process in detail. Analyze and understand the disputable and indisputable facts of crypto funds before you begin. 

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