Sinais Forex: Bitcoin, what is it and what is it for?

5 January 2021

What is Bitcoin?

Tracing its birth from 2009, Bitcoin is often known as cryptocurrency, a virtual or digital currency. It is a new type of currency that was invented by an unknown person using the alias of Satoshi Nakamoto. You do not need intermediaries for the transaction to take place, which means that there is no bank.

Bitcoin has emerged as a diversion for banks and the government. Which means that government support is not available because no direct or indirect taxes are going to the government fund.

The places where people can buy or sell bitcoins are known as “Bitcoin Exchanges” using different currencies.

What is Bitcoin for and what is it for?

Bitcoin can be used for several purposes:

It can be used to buy goods anonymously;
Bitcoins are not linked to any place or country
For the previous reason international payments are easy and cheap
No fees charged by banks
Can be purchased as an investment

What is Bitcoin mining?

Bitcoin mining is a way to earn bitcoins. It is a process of adding transaction logs to the Blockchain. You can mine Bitcoins in two ways: either use your own computer to mine or you can rent hardware from third parties.

Mining exists to confirm all transactions and each network user can access the transaction history.

Bitcoin Wallet - Bitcoin Wallet

Bitcoin Wallet (Bitcoin Wallet)

The digital wallet or Bitcoin wallet is where you can store bitcoins, it exists on the user's computer or in the cloud, the same being a kind of virtual bank account.

The names of buyers and sellers are not disclosed, although each transaction is registered in a public registry. It also helps users to buy or sell things without easily tracking them.

Bitcoin Issues and Limitations

It is not a globally accepted payment method
Use may be too complex for some people
Accepted by few retailers
It is a nichoe product can sometimes become expensive to use, that is, if used for small transfers and payments

Is Bitcoin Legal?

Talking about the legality of bitcoin is a controversial subject. Countries like Japan passed a bill that gave Bitcoin legal recognition, while in China the government imposed regulatory restrictions on the use of Bitcoin.

In India, for example, it is up to the government to decide whether we can treat bitcoins like a currency. But the government only has the power to issue currency. The real power is in the hands of the Reserve Bank of India to decide whether to treat Bitcoin as a currency or not. After demonetization in the country, demand for bitcoin increased. Even with the increase in demand, trade has many high risks, so it is very difficult to say whether Bitcoin is legal or not.

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