Why cryptocurrency creating ripples in our society

You have to be living under a rock if you haven’t heard of bitcoin yet. It’s all that the world is talking about today. But in case you missed out on it, let me give you some insights about the newly popular entity. Bitcoin is a cryptocurrency. Now, what’s a cryptocurrency? Well, cryptocurrency is a digital currency or you can also call it a virtual currency in which the methods of cryptography are used for transactions.

So, in other words, you can say that bitcoin is cash for the internet and a worldwide payment system. It is a ‘peer-to-peer electronic cash system’ that runs over the internet with no person or organization of government in charge. It was invented by Satoshi Takemoto. This man himself also happens to be a mystery as nobody has ever seen him before, people have only heard from him through emails or online forums. It was at the beginning of 2009 when he released an academic paper that described how the bitcoin system would work in detail. A brief overview of the system is described under;

  • TRANSFERS:

Bitcoins are stored in digital wallets. People can transfer bitcoins from their digital wallets to each other using their computers or cell phones via apps which later gets included in the bitcoin blockchain.

  • BLOCKCHAIN TECHNOLOGY:

This technology allows an online accounting method for bitcoins without central recordkeeping i.e. without the involvement of banks. A block records the data of the transaction which when completed goes into the blockchain as a permanent database so that it cannot be deleted. The blockchain ensures that the same bitcoin is not spent twice by the user. Every time a block is completed, a new one is generated through mining.  The participants of the transaction receive a copy of the blockchain for the purpose of verification and confirmation.

  • MINING:

For bitcoin mining, people use computers to solve complex math problems and when they are successful in doing so, they are rewarded with roughly 12.5 bitcoins every 10 minutes.

So why invest in bitcoins?

  • Back in 2010, bitcoin was worth the U.S $0.39. Today it has a net worth of $14,415.25, that is to say, a total of Pakistani RS. 15,950,54.07. This only proves that in such a short duration, bitcoin became so popular that some of the richest people with business minds are investing in it, hoping that its value will go even higher.
  • People tend to make purchases with bitcoins as there are no credit card fees and no taxes apply.
  • The transactions made through bitcoins and the users remain anonymous.

Why not invest in bitcoins?

  • The value of bitcoin depends entirely upon how many people are investing in it. Seeing people investing in bitcoin develops the desire in more people to invest in it and with that, its value goes higher. And if one-day people lose their interest in the whole bitcoin investment thing, it will drastically go down on the charts.
  • Since bitcoin has become so popular, people might start buying houses with them or expensive cars or other stuff. At some point, the government might step in to tax it all.
  • The value of bitcoin fluctuates every now and then so investing in it might be a risk. The safer option would be to invest in real estate as it is almost certain that you will receive a higher amount of money than that which you invested in it.

Talking about bitcoin is almost like talking about politics or religion. People are greatly divided on the matter. But I would say that in any market, with risk comes reward. And especially when this market is driven by rumors, news, and speculation, just make sure to invest in something that you can afford to lose. It’s stupid to jump into something just because everyone else is going for it.

Mustajab Shah is a freelance writer, economic analyst, and researcher. By profession, he is a pharmacist with detail insight over medical and health care issues. With several online courses and awards, his writings have enchanted many hearts. As his curiosity for answers produces a magnetic effect in his writing.