Archives January 2021

Analyzing The Bitcoin Phenomenon

When it comes to investing money and becoming rich, the concept is widely termed as wealth creation. Renowned investors consider this phenomenon as one of the safest ways to reach the heights in minimum time. For this, there are several ways which exist in the marketplace. These can be stock and capital markets. They can also be banking instruments like fixed deposit and recurring deposits. These are the options that are very much helpful in gaining a great outcome and return. However, their rate of return is not that attractive. Even if we term this as attractive, there cannot be many other variants which might be that safe and without the possibility of incurring risk.

Nowadays, technology has emerged to such an extent that there are money-making options available online as well. It has emerged in the form of bitcoin. Bitcoin is an artificial form of currency that exists in the form of tokens that are capable of recording data in them. The trading of bitcoins has resulted in ensuring that the rate of same has been touching skies in all this time. Therefore, at such times, there is a need to list down the importance of trading in bitcoin and at the same time understand the characteristics of this element. The same has been summarised as follows:

  • Bitcoin comes in the form of a distributed ledger.
  • It is in the form of tokens which is capable of recording the transactions.
  • They make the use of online regulation which ensures that they are traded without attracting any form of fraud.
  • Bitcoins have other variants as well. They can be etherums as well.
  • Bitcoins make the use of ledger technology which is able to record the information in batches.

Process

Bitcoin transactions make the use of various kinds of steps. These steps have been summarised as follows:

The blockchain is a decentralized public directory that is used by the whole Bitcoin network. The blockchain contains all verified transactions. It helps Bitcoin wallets to estimate their balance of money such that it is possible to check new transfers to ensure that they are in reality the property of the expender. Cryptography enforces the completeness and chronological order of the blockchain.

A transaction is a value transfer from the Bitcoin wallet to the blockchain. A hidden item of information called a private key or seed that is used for signature of operations which is stored in the Bitcoin wallet, supplying cryptographic confirmation that it comes from the wallet’s owner. The signature also prohibits anyone from changing the transaction after it is released. Both transactions are sent to the network and are normally checked in 10-20 minutes using a mining process.

Analysis of Distributed Ledger Technology:

One of the foremost steps is the selection of the distributed ledger technology. It helps to have ease of operation with safety.

 Buying and Selling of Bitcoins:

The next step in line is to ensure that trading in this format happens between the registered users.

 Finalization of the Transaction:

The last process in line is to ensure that the transaction gets finalized in the minimum possible time. The settlement of the accounts takes place which ensures that the required bitcoin value is entered into different platforms.