Bitcoin has been in the news the past couple of weeks, but a lot of folks are still unaware of them. Could Bitcoin be the future of online currency? This is simply one of the questions, commonly asked about Bitcoin. - bitcoin arbitrage
How Does Bitcoin Work?
Bitcoin is a type of electronic currency (CryptoCurrency) that's autonomous from traditional banking and got into circulation in 2009. In accordance with some of the top online traders, Bitcoin is regarded as the best known digital currency that depends on computer networks to resolve complex mathematical problems, so that you can verify and record the important points of each transaction made.
The Bitcoin exchange rate will not depend on the central bank and there isn't any single authority that governs the provision of CryptoCurrency. However, the Bitcoin price is dependent upon the level of confidence its users have, since the more major companies accept Bitcoin like a method of payment, the more successful Bitcoin will become.
Benefits and Perils of Bitcoin
One of the benefits of Bitcoin is its low inflation risk. Traditional currencies have problems with inflation and they tend to lose their purchasing power annually, as governments carry on using quantative easing to stimulate the economy.
Bitcoin doesn't suffer from low inflation, because Bitcoin mining is fixed to just 21 million units. That means the release of new Bitcoins is slowing and the full amount is going to be mined out within the next couple of decades. Experts have predicted that the last Bitcoin will be mined by 2050.
Bitcoin includes a low risk of collapse unlike traditional currencies that count on governments. When currencies collapse, it contributes to hyperinflation or the wipeout of one's savings instantly.
Bitcoin exchange rate is not regulated by government and is an electronic digital currency available worldwide.
Bitcoin is simple to carry. A billion dollars inside the Bitcoin can be stored on the memory stick and placed in one's pocket. It's that easy to transport Bitcoins in comparison to paper money.
One drawback to Bitcoin is its untraceable nature, as Governments and other organisations cannot trace the origin of your funds and as such can attract some unscrupulous individuals.
How to Make Money with Bitcoin
Unlike other currencies, there are three ways to make money with Bitcoin, saving, trading and mining. Bitcoin can be traded on open markets, which means you can buy Bitcoin low and sell them high.
Volatility of Bitcoin
The need for Bitcoin dropped in recent weeks because of the abrupt stoppage of trading in Mt. Gox, which is the largest Bitcoin exchange on earth. According to unverified sources, trading was stopped due to malleability-related theft that was said to be worth more than 744,000. The incident has affected the confidence of the investors for the virtual currency. - bitcoin arbitrage
Based on Bitcoin chart, the Bitcoin exchange rate improved to more than $1,100 last December. That was when more people became aware about the digital currency, then the incident with Mt. Gox happened and it dropped to around $530.
In 2014, We expect exponential growth in the popularity of bitcoin around the world with both merchants and consumers,� Stephen Pair, BitPay's co-founder and CTO, �??and anticipate seeing the greatest growth in China, India, Russia and Latin america.
India has already been cited as the next likely popular market that Bitcoin could move into. Africa could also benefit hugely by using BTC as a currency-of-exchange to get around without having a functioning central bank system or any other country that relies heavily on mobile payments. Bitcoin's expansion in 2014 is going to be led by Bitcoin ATMs, mobile apps and tools.
World Experiences Bitcoin
Lots more people have accepted using Bitcoin and supporters hope that certain day, the digital currency will be used by consumers for his or her online shopping and other electronic deals. Major companies have already accepted payments with all the virtual currency. Some of the large firms include Fiverr, TigerDirect and Zynga, and others.
The Future of Bitcoin
Bitcoin works, but critics have asserted the digital currency isn't ready to be used by the mainstream due to the volatility. They also indicate the hacking with the Bitcoin exchange in the past which has resulted in the loss of several millions of dollars.
Supporters of digital currencies have declared there are newer exchanges that are supervised by financial experts and venture capitalists. Experts added that there are still hope for the virtual currency system and the predicted growth is large.