What is Bitcoin ( BTC ) – Crypto info
Bitcoin (BTC) is known as a representative of virtual currency (cryptographic assets).
As of November 2020, the price of one Bitcoin has almost got to 40.000 $. It is showing momentum by overtaking the 30.000$ price for one Bitcoin which was recorded in the 2017 virtual currency boom.
As prices and popularity rise, Bitcoin is becoming more and more talked about, even among people who have never been associated with cryptocurrencies. Therefore, in this article, we will explain the mechanism features of Bitcoin so that even beginners can understand it.
- World’s first digital currency!
Bitcoin is the world’s first blockchain-based digital currency. Its major feature is that there is no administrator such as a central bank in legal tender. Currently, Bitcoin has the largest circulation volume among the virtual currencies in circulation, so it seems that many people think that “Bitcoin = virtual currency”. However, Bitcoin and cryptocurrencies are not synonymous. Bitcoin is just one of many virtual currencies, just as the US dollar, and euro exist in the “currency” group.
- Bitcoin (BTC) started with a single treatise
Bitcoin began in October 2008 when a person named ” Satoshi Nakamoto ” posted a treatise online . It was written about a decentralized cryptocurrency that does not go through the state or banks. Three months after the submission, in January 2009, open source software based on Mr. Nakamoto’s treatise will be created and released. This is the first appearance of Bitcoin that continues to this day. However, very innovative Bitcoin, such as the idea of ”virtual currency” which is completely different from the conventional currency, blockchain technology, financial system without centralized administrator, is not yet widely accepted. was. But, even so in February 2010, the first Bitcoin exchange was opened and trading began immediately.
- Different from electronic money
Bitcoin, a virtual currency, is also different from electronic money. Both are the same in that they are “recorded currency values as digital data”. However, electronic money, like various prepaid cards, is a digitized state-issued currency . Bitcoin and other virtual currencies have nothing to do with currencies issued and guaranteed by the state or central banks. There are six specific differences between virtual currency and electronic money.
- Different publishers
- Corresponding law is different
- Is there centralization?
- Available places are different
- Whether price volatility is large
- Whether you can earn points
- What are the unique mechanisms and features of Bitcoin (BTC)?
Bitcoin, the virtual currency traded for the first time in the world, is characterized by the highest circulation volume. In addition, even beginners will be able to easily understand the mechanisms such as “absence of management organization” and “upper limit of the number of issued coins”, which are characteristic functions unique to Bitcoin.
- Number of issues in upper limit
Since the time of Bitcoin’s birth, the number of issued Bitcoins has been set at 21 million. This is a Bitcoin specification and is pre-installed in the program, so no further issues will be issued. Currently, many of the issued virtual currencies have a final issuance limit. However, the quantity varies and the basis for the numbers is different. In real fiat currencies, the central bank’s economic policies can increase or decrease the amount of currency in circulation, which can guide economic trends. On the other hand, if more currency is circulated than necessary, the value of the currency will decline and inflation will occur.
In the case of Bitcoin, there is no central organization to manage it, so if it is issued indiscriminately, Bitcoin will eventually appear in the market and its value will decrease. Due to such concerns, the maximum number of issues has been set in advance. It can be said that the fact that the issuance limit is set in advance in this way leads to the prediction of future price increases of Bitcoin and the speculative tendency due to it.
- You can send money to the world in real time
As long as you have an internet environment, Bitcoin can send money 24 hours a day, 365 days a year, wherever the other party is. Another unique feature of Bitcoin is that it takes an overwhelming amount of time to deposit money compared to conventional overseas remittances via banks. It is possible to complete an overseas remittance, which used to take several days, in just enough time. The reason why it is possible to send money overseas so quickly is that Bitcoin and other virtual currencies use a special technology called blockchain .
- What are the three benefits of Bitcoin (BTC)?
Bitcoin is attracting a great deal of attention from all over the world as a new type of financial product along with stocks and exchanges. Such Bitcoin has various advantages over cash and credit cards. Therefore, I will explain the three advantages of Bitcoin in an easy-to-understand manner even for beginners.
- Money transfer
1. You can send money directly between individuals
The first is that you can send money directly between individuals. Even though virtual currencies can be “directly remitted”, they may not come out very well. But this is a huge advantage.
When buying or selling on the Internet or sending money to children living away, it is common to use bank transfer. However, with bank transfers, there may be a time lag between remittance and receipt.
2. Low fees
Another advantage of Bitcoin is the low fees for overseas remittances . Of course, this is not limited to Bitcoin, but to cryptocurrencies as a whole.
3. Can be use all over the world without currency exchange
Finally, there is a point that it can be used all over the world without exchanging money.
When traveling abroad, it is inconvenient if you do not prepare the currency of your destination in cash. In most cases, you will have to change to your local currency or traveller’s check at a Japanese bank in advance, or at your local airport. However, the fee for this exchange is surprisingly high.
- What are the three disadvantages of Bitcoin (BTC)?
While the world is expecting the potential of Bitcoin, there are also disadvantages. Therefore, I will explain the drawbacks of Bitcoin in an easy-to-understand manner even for beginners.
- Price fluctuations
- Settlement time
- Payment service
1. Price fluctuations are severe
The first is that prices are volatile. Bitcoin’s price fluctuates wildly, and it can fluctuate even during the day.
Therefore, it is a disadvantage for those who want to invest in financial assets with more stable prices. On the other hand, some people see the volatile price fluctuations as a profitable opportunity.
2. Difficult to settle immediately
Second, immediate payment is difficult. With Bitcoin, when a transaction such as remittance is performed, it is verified whether the content is correct, and when it is confirmed that there is no fraud or error, the transaction is confirmed. Therefore, even if you send money, it does not arrive at the other party immediately, and it is difficult to make an immediate payment.
There are few payment services
Third, there are few Bitcoin payment services.
If the physical store supports Bitcoin payment, you can send money from the wallet and make payment on the spot, but this is not the case with online shopping. As with credit cards, you need a payment service that stands between the user and the store to mediate payments.