I hope you have heard the term " BITCOIN." BITCOIN, which is one of the top google searches, is so popular nowadays. So what is the reason behind its popularity?
To understand Bitcoin properly, let us first understand what money is actually.
When we provide some service, or we do any work, only then someone pays us. We get our salary only when we add some value or provide some service. Therefore, in short, we can say Money is actually Value.
Money has been represented in different ways at different times. In ancient times, people used commodity exchange to sell or buy something, which is called Bartering. After that, they started using gold for transactions. But there were some difficulties with gold ;
● We couldn't carry gold everywhere.
● What if we wanted to buy few things like 1/2 kg of sugar. Then it would have been tough to divide gold into small pieces.
To overcome these difficulties, the government has introduced a scheme in which people could keep their gold with the government in return for which the government used to given them a receipt. Based on this receipt, they could do their transaction easily.
This receipt is further converted into paper money. In this paper money, the government promises to pay the bearer 100 Rs, 500 Rs, 2000 Rs, etc. The government assured the people that they could avail themselves of any service, Value, or whatever they want based on this paper money.
Now, what if the government starts printing a lot of money? What do you think you will become rich? So the answer is not at all.
Let's understand it with an example, suppose only 1 kg of sugar is left, and all the people have 1 lakh Rs, then what will happen? This sugar will be given to that person who has more than 1 lakh Rs,i.e., the cost of 1 kg of sugar will be more than 1 lakh Rs. Therefore, printing a large amount of money doesn't make any sense; this will only increase the price of commodities.
Later, this paper money was converted into digital money. The main challenge of this digital currency was to maintain a record of every transaction, which is done by the Centralised Banking System. But this system also has some challenges. When we deposit our money in any bank, this bank invests our money, and if there is any fraud, scam, or bankruptcy, then our money is at risk.
A document was published in Oct 2009 by Satoshi Nakamoto. Who is Satoshi Nakamoto? This is still a Mystery. In this document, he gave an alternative to a centralized banking system. According to this document, the current banking system can be replaced by "BITCOIN.
."
BITCOIN :
It is a type of cryptocurrency. There are many cryptocurrencies available in the market, but here we will focus mainly on Bitcoin. Bitcoin is a virtual currency which means it doesn't have any physical existence. We can't see it, can't touch it but can spend it.
It is a decentralized currency,i.e., it can't be controlled by any bank authority or government. So if there is any fraud or scam, then we can't complain to anyone.
BLOCKCHAIN :
To understand blockchain, let us take an example. A shopkeeper keeps all their data related to sales or purchases in a diary called Ledger. Like the ledger, the blockchain also contains every transaction regarding Bitcoin in a public record. Every single record of blockchain is known as a Block.
BITCOIN MINING :
You all know very well what mining is. When we extract gold from gold mines, then we get gold. Just as gold, coal are mined, Indian Rupees, US dollars, yen, or other countries' currencies are also printed, called Minting.
Like these currencies, creating or generating new bitcoin is known as Bitcoin Mining. But it runs on the computer's algorithm. Bitcoin is generated by solving a computational puzzle. These puzzles are so complex that they can't be solved by hand. The person or the PC who perform Bitcoin mining is known as Bitcoin Miners
.
Now suppose I'm doing a transaction with you, then. How my bitcoin is delivered to you? The medium through which bitcoin is transferred successfully from person to person is Bitcoin mining.
Some transaction fee is required during the transaction, and bitcoin miners who make our transaction successful by solving the computational puzzle are rewarded with this transaction fee in the form of Bitcoin or Satoshi ( In the next paragraph, I'll tell you what Satoshi is). This is how new bitcoins are generated.
Now, if we start generating a lot of bitcoin, then things will turn around, as I told you in the case of Sugar. This is why it is already decided that more than 21 million bitcoin can't be generated.
Bitcoin is volatile in nature, i.e., the value of bitcoin changes every time. The value of bitcoin depends on its demand.
● 1 Bitcoin = 23,72,418.53 INR
( 18th July , 2021)
● 1 Bitcoin =6,90,161.43 INR
( 19th July, 2020)
We can purchase bitcoin directly by paying such an amount of money. But if we don't have that much money, then don't worry, we can buy a smaller unit of bitcoin. This smaller unit of Bitcoin is called Satoshi .
● 1 INR = 100 Paise
Similarly ; 1 Bitcoin = 10 Crore Satoshi
There are many apps available to sell or buy bitcoin, such as Zebpay.com, unicoin.com, etc. First of all, we create an account in any of the apps and submit some documents like an adhar card, pan card, bank details, phone no. , email, etc. By creating an account, we can easily sell or purchase Bitcoins .
Some important facts regarding bitcoin:
It is not illegal in India but regulated. This means that there is no control of any government or system. Because of the absence of any system and government, there are many illegal activities involved in a bitcoin transaction.
I hope this article will be helpful for you.
Thank you.
You must be logged in to post a comment.