September 2018 archive

Benefits and risks of Bitcoin

Bitcoins are the pioneers of the crypto currency and were the cornerstone for the blockchain. As the first crypto currency it still has some weak points. Let’s take a closer look at the advantages and disadvantages of the blockchain.

Advantages and chances of the Ethereum code

Bitcoin can be used worldwide. More and more countries accept it as a legal means of payment.
Due to the decentralization of digital currencies through blockchain technology, it is almost impossible to control or manipulate the currency. Thus, the Bitcoin exchange rate is not dependent on political decisions or economic developments in individual countries.
Thus, no central bank can trigger inflation by increasing the money supply.
The Bitcoin protocol specifies a maximum amount of coins. The greater the acceptance of the currency, the more valuable it becomes and the Ethereum code rate rises.

To be able to pay with BTC, you do not need a bank account, only a so-called wallet, which can be created e.g. free of charge online. Banks thus become superfluous.
Transactions are faster than with banks, especially when it comes to international payments. On average, a transaction takes 10-30 minutes from anywhere with an Internet connection. Impossible for banks to keep up.
Low transaction fees: It is not only much faster to transfer money via Bitcoins – it is also much cheaper. Regardless of where and to what location a transaction is carried out, the costs are usually in the cent range. Here too, banks cannot keep up.
No personal and sensitive data is required for opening a wallet (account) and for transactions.

Disadvantages and risks of the Bitcoin code

The acceptance of digital currencies has not yet fully penetrated the population. So far, there are only a few shops that offer payment through Bitcoin code. However, it must be mentioned that the acceptance points are becoming more and more. The trend speaks therefore for Bitcoin code.
Who acquires BTC, must store them somewhere. Regardless of whether they are stored on the computer, on a stick or elsewhere: If the storage medium is stolen or destroyed, the money is also gone. It can also be destroyed by malware. There is no bank here that can keep your money safe.
Once executed, transactions are no longer reversible. A recall of the money, as it is known from banks, is not possible.
The number of executable Bitcoin transactions is currently still limited. The more popular this crypto currency becomes, the faster it reaches its transaction limit. Then payments take longer (which is still much faster than with banks). Other crypto currencies offer better possibilities. But a solution is also being developed for Bitcoins.
How can I buy Bitcoin?
Where to buy Bitcoin? A so-called wallet (electronic purse) is required to store the Bitcoins or the private keys. This can be downloaded as an app to your smartphone, for example. There are several ways to purchase Bitcoins afterwards:

Bitcoin exchange offices, also called Exchanges, offer the purchase of Bitcoins or their conversion into the local currency. Payments are usually made via a normal bank account or services such as Paypal. An exception is the exchange office from the Netherlands. There Bitcoins can also be paid with a credit card. The fees for the purchase or exchange are between 1.5 and 5.0% of the sum that is exchanged.

On marketplaces like private individuals trade directly with Bitcoins. This works similar to eBay auctions. The Bitcoin course there is determined by supply and demand. One can acquire therefore on these Bitcoin stock exchanges possibly BTC more favorably. Also with them a small fee becomes due for each transaction, which depends on the height of the exchange sum.

Meanwhile there are also some stand automats, where one can acquire directly BTC against cash. These machines are located in cities such as Bochum, Berlin or Munich. The more popular the currency becomes, the more vending machines there will be.

Bitcoin – Are BTC the money of the future?

Bitcoin – the most discussed digital currency at the moment. No other currency is being talked about and written about as much as Bitcoin. Depending on the point of view of the person concerned, Bitcoins are either praised or demonised. But what are Bitcoins really? Will they soon play an important role as a means of payment for the general public? Are they the next hot investment product or more of a gimmick for computer geeks? Are they perhaps mainly used to launder money and finance illegal business? Or will they make it into the mainstream and be used as currency around the globe?

Bitcoins – what are BTCs and where do they come from?

Bitcoin, often called BTC for short, is an electronic currency, i.e. it only exists on computers. So you can’t touch it, like a gold bar for example. Bitcoin is not the only digital currency, but at the moment it is the best known and most successful. This means of payment is not controlled and regulated by any government, bank or institution. It is created by computing processes on computers. In principle, anyone can participate in the creation of bitcoins, called mining. To do this, the computer must solve a kind of mathematical puzzle. This becomes all the more complicated, the more Bitcoins develop. Only 1,880 new Bitcoins can be created every day. The total volume of the best-known crypto currency is limited to 21 million. This limitation is based on the protocol on which the Bitcoin is based. This means that in the course of time less and less BTC can be recreated. Thus each individual Bitcoin becomes ever more valuable.

Initially, BTC was only used for payments on the Internet, especially in Darknet. Thus this means of payment got first of all a certain “dirty image”. Today, however, many merchants in the normal Internet also accept Bitcoins. Even offline, some merchants have started to accept BTC. However, the offline payment options with BTC are still limited and these shops are mostly located in districts where many young people with an affinity for technology live. Still! Because more and more countries accept More and more countries are accepting Bitcoin as their currency. The establishment of virtual money is in full swing.

The special thing about Bitcoin is that it can be divided into small and smallest subunits. The smallest unit is the one named after the inventor of the currency Bitcoin, Satoshi. It is one hundred millionth Bitcoin = ( 1 Satoshi = 0,00000001 Bitcoin). This is also necessary, because with only a maximum of 21 million Bitcoins, the stock is much smaller than the paper money, which can be constantly reprinted. Since this is not possible with the crypto currency, it has a certain infaltion protection. The owner of a Bit coin, or a partial amount, is identified by a private key.

Who is the inventor of Bitcoins?

The inventor of the currency Bitcoin is Satoshi Nakamoto. However, nobody knows who is behind this name. The name sounds Japanese. However, this does not mean that Satoshi Nakamoto must be a Japanese. There has been much speculation since the introduction of Bitcoin, many names have been traded as possible inventors, but no one can say for sure who Satoshi Nakamototo is. It was also suspected that several people were hiding behind this name.

Whoever Satoshi Nakamoto is, he released the first Bitcoin client in 2009 and mined the first Bitcoins. In 2011 he let it be known that he now wants to dedicate himself to other things. No one has heard from him since.

The Blockchain – the technology behind the Bitcoin
Blockchain technology is said to have incredible potential. Many experts even speak of a revolution in the banking sector.

The blockchain (chain of blocks) is the cash book of the Bitcoin currency. It consists of numerous individual blocks in which Bitcoin transactions are recorded. This block chain is distributed and stored on many computers, the so-called nodes. Mathematical procedures ensure that a block that has been saved cannot be subsequently changed. All blocks of the chain would have to be changed at the same time, but this is impossible due to the distributed storage. If a new bit coin is mined, it is appended to the existing chain as a new block. All transactions, for example when paying with crypto currencies, are also stored in the blockchain.

Bitcoin – Blockchain
Intensive research is currently being carried out on the blockchain. It makes the intermediary for transactions, usually banks, superfluous. That’s why financial institutions are of course particularly interested in this technology. FinTech start-ups are springing up like mushrooms.