What is Bitcoin? Get the Answer from This Essay Example

Published: 2022-03-29 05:26:14
What is Bitcoin? Get the Answer from This Essay Example
Type of paper:  Report
Categories: Money
Pages: 5
Wordcount: 1274 words
11 min read
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Bitcoin Definition

Bitcoin refers to a universal form of cryptocurrency that some organizations and individuals use when they want to make payments. Bitcoins are forms of digital currencies that have been found to facilitate peer to peer transactions among the users. They do not need any intermediary or financial institution to make everything a success. For the operations to be legitimate, there needs to be a network mode which operates by making use of the cryptography which has got availability in a distributed ledger which many refer to as a blockchain. Satoshi Nakamoto was the first person to come up with the idea of using bitcoins to take part in transactions between people who did not want to have any form of intermediary.

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There is a unit of account that is used among people who are using their form of transaction they refer to it as the bitcoins. Bitcoins are represented by a ticker symbol and also has some smaller units referred to as milibitcoin. Miners of Bitcoin do not print them like dollars, but they usually produce them by the use of a computer. There is a software that has been made to enable people to come up with bitcoins which and then introduced them market for further transactions (Kontogoulas, 2017). The currency has grown to be common among people who are taking part in online businesses since it happens to be faster and less complicated.

Why is it popular?

Bitcoin came in the form of digital currency, and therefore people had to find out some of the ways it could benefit while taking part in business transactions. In that case, it has been able to gain popularity when looked from various perspectives. One of the reasons as to why the bitcoin is popular is because it is not centralized in any way (Liebkind, 2017). No central authority has the mandate of controlling the way the bitcoin operates in the economy. It means that people can come up with bitcoins and uses them in any form of a transaction so long as they are produced using legitimate approaches.

The other reasons as to why the bitcoin is common are the fact that it has no complications when it comes to set up. Bitcoin can be set up in few minutes as compared to the traditional bank account that takes a lot of time to produce. The reason as to why it is not difficult to setup is the fact that it does not ask any questions or fees in the process. The other reason for the popularity is the fact that it is anonymous in that a single person can have many bitcoin addresses. The addresses operate independently, and no link or relation exists between them. In that case, people who are using them usually are assured of security when it comes to the business world.

Pros and Cons of Bitcoin?

Bitcoin has got its pros and cons regardless of the fact that it has gained popularity among the people. One of the advantages of bitcoin is that people who use them get protection from payment fraud. Bitcoin is digital, and that means no one can come up with a counterfeit in any way. At the same time, the sender cannot reverse any transaction made, and that makes it legitimate from the perspective of security. The other pros of bitcoin are that it facilitates direct transfers for the people who are in the immediate settlements. It means that the bitcoin does not have along chain when it comes to making payments and other modes of transactions.

The bitcoin also has cons, and one of them is that it promotes all sorts of illegal financing and also enables people to take part in activities that are immoral. Many people believe that the bitcoin can facilitate transactions of all types and the people involved can choose to be of an anonymous nature (Liebkind, 2017). The other con is there is not better or safe way to protect the bitcoin form cases of human error. There is also a barrier when it comes to the scaling aspects of the bitcoin. There is a limit to the number of transactions that one can conduct in a single financial period. In that case, one needs to have a schedule of how the operations will be performed and made possible in the long run.

Is bitcoin regulated? Is it good or bad?

Bitcoin is regulated, and the kind of measures that have been put in place are not very good. Most of the regulatory bodies are doing it to make sure that they deal with the challenges that the bitcoin is posing to the economy. The United States is one of the countries that has been on the front line when it comes to the regulation of bitcoin (Griffin, 2018). The nation regulates the use of the cryptocurrency since they feel that it would destabilize the market. For instance, they have come up with ways in which people can be prevented from taking part in the transactions after they find out that it is not registered by any relevant body.

Bitcoin reduces the traffic, and the queues that are in banks and they should not be regulated in any way. People should be allowed to use the bitcoin since it increases the rate at which business is operating and also makes sure that the parties are protected by the measures that have been put in place. It is essential to make sure that the economy is running as per the set standards. In that case, the regulation of the bitcoin should be lifted to increase the growth of the economy by double figures. The central banks are also likely to benefit since they will not have the burden of dealing with people who are engaging in long-term transactions in business.

What is the future of Bitcoin?

Bitcoin has been in existence for a while, and that means that is still has a bright future when looked from the direction that the world and the economy are taking. People are heading towards the digital world, and that means the use of bitcoin is likely to increase to a great extent. The number of sites that are coming up to facilitate the mining of bitcoin is also growing, and that means that bitcoin will still be used in the future business transactions (Denham, 2018). The United States is one the countries that have placed strict laws on the use of bitcoins, but it is likely to lift the regulation since the advantages that come with bitcoin are many. It means that the future of bitcoin, in this case, is that many will desire to use it after they realize the steps that are taken to have them. Bitcoin facilitates payments that are fast, and the future will need such process to be carried out in short span of time. In that case, there would need to make sure that the system is incorporated in all official activities. The number of computers and smart devices is increasing, and that means people will be able to access the sites where the bitcoins are mined. In that case, the future of bitcoin is full of successful initiatives and processes that will make it remain relevant.

References

Denham, K. (2018). "The future of Bitcoin: How the cryptocurrency is touted to trade going forward." City Am.

Griffin, A. (2018). "Bitcoin Regulation: How it would happen in South Korea and What could happen to the price." Independent.

Kontogoulas, S. (2017). "Bitcoin - Historical Context" Forex Analytix

Liebkind, J. (2017). "Bitcoin Government Regulations Around the World." Investopedia.

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