As the saying goes, money makes the world go round. This old adage proves that everything in the world can be bought by money. But what if there is a new and alternative way of acquiring money, goods and commodities without the use of paper bills and loose coins? The Internet has a way of finding things. With the advent of modern technology and fast-paced lifestyle, people tend to go out and about their day to day lives using different modes of exchange.
Introducing the new and alternate medium of exchange in the digital world: cryptocurrency. It is designed to promote an easy mode of digital exchange on the Internet. It provides secure and fast transactions over the cyberspace. It is also accountable for the controlled creation of various units of currency. Also known as digital currency, this serves as an alternative payment to purchases made online.
Bitcoin: The Newest Alternative to Digital Currency
The most popular type of cryptocurrency is Bitcoin. It is the first decentralized type of digital currency in 2009. Many alternative currencies were created following its first launch. One called theirs, altcoins – a combination of alternative and bitcoins.
As opposed to many banking institutions using a centralized electronic transfer of money, Bitcoin uses the Blockchain. It is a type of transaction database that can be likened to an online ledger. This ledger keeps and secures all records of every transaction made online. For example, if a person purchases or sells bitcoin, that swap gets automatically logged. Every movement of currency in the webspace piles up and creates a block. Nobody controls the blocks because the decentralized system distributes them on every computer that has Bitcoin installed.
Security and Safe Usage of Bitcoins on the Internet
For safety and security, each bitcoin is installed with complicated identification called the hexadecimal code. This makes it difficult for someone to steal information unlike that of credit cards. There is also less chance that bitcoins or even a fraction of it will get lost or go missing because it has accountable finite numbers. However, while fraudulent purchases made using credits cards can be reversed, bitcoin transactions are not allowed.
21 Million and Bitcoins in the Future
The number of bitcoins released gets cut in half every four years, depending on the past cycles and the rewards given to miners who discover blocks. Bitcoin’s founder, Satoshi Nakamoto, said that there are finite numbers to bitcoins: 21 million. He assumed that people would find out new sets of numbers per block of daily transactions. This only means that there is no inflation in bitcoins and there won’t be more bitcoins added in the future.
There isn’t much knowledge as to what happens to bitcoins in the future. However, Bitcoin users predicted that about 94% of bitcoins will be released by 2024. As the number of creeps or miners discovering new blocks approaches to 21 million, a lot of people speculate that the profits created by miners will slowly go down. However, while more bitcoins are being produced, there will be rise in transaction fees to fill in the gap.