The most important question is why does bitcoin
have any value. The reason your country’s currency has value is because it was
agreed upon by the government to exchange goods and services, similar is the
case with bitcoins. Bitcoin is a “cryptocurrency” in which
“crypto” stands for cryptography which is used to keep the
“currency” secure and prevent any frauds and hacking
The reason bitcoin has “value” is because the country of the internet has agreed upon it to exchange goods and services online. What happens if people unanimously agree not to use bitcoins as an exchange for goods and services, you guessed it right it will lose it’s “value.” The reason why bitcoins got a boom in early 2018 is just because people invested in bitcoin to be an exchange online, the more people agree to this the more is the value of bitcoin.
Bitcoins are usually used for goods and services
online, many sites allow bitcoins for exchange, also it goes without saying it
is also used for evil and criminal things on the dark web.
The reason bitcoin has value and credibility is
because it is finite. Every bitcoin out there is a reward given to a miner for
updating the blockchain. Bitcoin has no central authority. It works by a
peer-to-peer network. People take up the responsibility to update the
blockchain after every transaction. There are virtually thousands of people to
keep track of the same “blockchain” credibility is maintained.
Anyone can mine bitcoins by running a program
like bitminter on your computer. But, I highly recommend checking whether you
will make a profit or not using your computer. How does profit or loss come
into the picture you ask, you have to pay for the electricity, if what you are
paying for the electricity is more than what you are making in bitcoins then it
is just not smart.
How do you check whether you can make a profit?
Well, check on an online bitcoin calculator like this mining calculator.
Also to note: mining for bitcoins for too long on
your computer can heat it up and can potentially fry your machine. There are
people who buy good hardware just to mine bitcoins, on a large scale such a
setup is called bitcoin mining farm.
Though many people find Bitcoin valuable, there
are fair shares that criticize the cryptocurrency. According to Warren Buffett,
buying non-productive assets, all you’re counting on is the next person is
going to pay you more because they’re even more excited about another next
person coming along.”
value of Bitcoin is going to be on people’s belief and mutual agreement in the