Bitcoin Breakout: Everything You Need to Know


Bitcoin

If you follow the everyday news, you might have heard about recent bubbles in bitcoin. Starting from under $1,000 this year, Bitcoin’s value has surged past by 1000% to reach the milestone of $10,000 last week.

Considering this huge surge in Bitcoin’s price, many of you and investors might feel missing out on the huge opportunity.

What if I tell you, you didn’t?

Despite what government officials, market skeptics, and investors tell you, the bitcoin will continue to grow in future and as it gets popular, it’s value will get higher.

According to former Fortress hedge fund manager Michael Novogratz, “Bitcoin could easily reach $40,000 at the end of 2018”.

And, here I am going to explain just that. Despite the negativity about the cryptocurrencies in our society, I am going to explain, why Bitcoin may be one the best investment you could do right now!

But, to understand that, we should first know what we are dealing with, and to do that, we have to go back to the days of its inception.

What is Bitcoin?

Bitcoin is a world’s first decentralized digital cryptocurrency which works without any central repository or administrator. The network is peer-to-peer and the transaction takes directly between users using cryptography and it is verified by public nodes and logged in a public distributed ledger called blockchain.

The bitcoin was invented by a person or group of persons operating under the name of “Satoshi Nakamoto” and was released as an open source software in 2009.

Bitcoins are created by the process called mining, they can be used as digital currencies to buy product and services.

Units

The bitcoins are usually measured in the unit of measure – “Bitcoin”. But, there are other ways to measure small amounts of bitcoins – millibitcoin and Satoshi. Satoshi is the smallest amount of bitcoin representing 0.00000001 bitcoin, one hundred millionths of a bitcoin. Millibitcoin represents 0.001 or one-thousandths of bitcoin or 1,00,000 Satoshi.

Is It Legal?

Although not being regulated, Bitcoin is perfectly legal in most of the countries in the world. The legal status of bitcoin varies substantially from country to country and is still undefined or changing in many of them.

While some countries have explicitly allowed its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently.

The structure of blockchain used in bitcoin make sure that both parties remain anonymous as it uses randomly generated keys. And considering people’s rising interest in virtual cryptocurrencies, it’s prone to theft, and misuse as it is hard to trace, and considering the fact many criminals and terrorists already are using it. The legal days of bitcoin may be over in some countries in a matter of days.

You can check Wikipedia article mentioning the legality status of bitcoin by country.

How Can One Buy Bitcoins?

Bitcoin WalletYes, you can buy bitcoins using bitcoin wallets or by mining it. Bitcoin wallets usually accept regulated currencies and reward you with respective amount of bitcoin. There are tons of bitcoin wallets based in India like –  Zebpay, Unocoin, and Coinsecure where you can buy and store your bitcoins.

Pro Tip: Use Referral Code REFMARO5033 on Zebpay and get ₹100 worth of bitcoin free.

If you don’t trust online wallets, you can use physical wallets or hardware wallets, Physical wallets store necessary credentials so that you can spend bitcoins offline while hardware wallet keeps credentials offline while facilitating transactions.

trezor hardware wallet
Trezor Hardware Wallet

If you don’t want to buy bitcoins, you can always mine it. Mining is nothing but a record-keeping service done through the use of computer processing power. Miners keep the blockchain complete, consistent, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block. Each block contains a cryptographic hash of the previous block, using the SHA-256 hashing algorithm, which links it to the previous block, thus giving the blockchain its name.

The successful miner finding the new block is rewarded with newly created bitcoin and transaction fees. As of 2016, the reward was 12.5 newly created bitcoin per block added to the blockchain.

But, we wouldn’t recommend it as it takes lots of processing power and rewards very few bitcoins which are not worth it unless you have a 100 core supercomputer in the back of your house.

Why It Is Going to Rising to New Highs in Future?

As I have said earlier, you will get a reward for every newly created block for the blockchain. But, the reward will eventually be going to be zero and the record keeping will only be rewarded by transaction fees.

How?

Here’s the catch!

The founder of bitcoin – “Satoshi Nakamoto” set a monetary policy based on artificial scarcity at bitcoin’s inception that there would only ever be 21 million bitcoins in total.

The bitcoin protocol set by the founders specifies that the reward for adding a block will be halved every 210,000 blocks (approximately every four years). Eventually, the reward will decrease to zero, as the limit of 21 million bitcoins will be reached.

As there is going to be an only finite number of bitcoins in the world, the more the people buy or transact using bitcoin, the more its value is going to be.

As of today, there is a total of 20million bitcoin wallet users worldwide and the numbers are piling up fast as bitcoins continues to gain popularity.

So, the price of bitcoin may hitchhike for a temporary time but it is a definitely beneficial investment in the long run.

But, hey! It’s your money we are talking about if natural to be a skeptic and to be careful.

So, if you think the bitcoin is just a bubble and it will blow up or you are afraid to invest your money. Here a great tool on GitHub called Bitcoin Bubble Burst which uses artificial intelligence and neural network to predict cryptocurrency values.

It will notify you if something big is going to happen so you can rapidly sell/buy bitcoins to protect/benefit yourself from such apocalyptic events.

So, What do you think? Are you going to invest in bitcoin? Will bitcoin bubble burst? Will it fall? Let me know in the comment section down below.

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Akshay Bhor

Akshay Bhor is a techie, webmaster, tech reviewer, cyber security enthusiast and part time blogger from Pune, India.

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