Bitcoin Cryptocurrency working, advantages, disadvantages

Now the world is getting into the digital world. So everything happens digitally. Even internet connectivity is at its peak. In this modern world, there is no need for hard cash. Because digital payment made the mode of transaction seamless.

But people still find that their money is under government control. After all the hard work, people are losing money with unwanted taxes. Even the rise of inflation is also a major concern of the people.

So, people are finding ways to make lumpsum money in a shorter span. Now people are investing in trading instead of saving or fixed deposits. Even people are also smart and look for a higher return.

Now. people are also actively investing in Bitcoin Cryptocurrency. Where there is more probability to get a 10X return. Trends are more leaning on investing in the cryptocurrency platform. 

Presently, one Bitcoin price in Indian currency is close to 30 lakhs. Investing in Bitcoin is getting on-demand process. Everyone right from the teenager to the elder one is investing in cryptocurrency.

Many of us don’t know what is bitcoin? How bitcoin works? Also advantages and disadvantages of Bitcoin investment.

Here, this blog tries to understand the concept behind Bitcoin cryptocurrency. 

What is Bitcoin Cryptocurrency

Bitcoin is one type of Cryptocurrency. In simple words, it is virtual cash. Bitcoin acts like money and represents the value of Bitcoin. All the Bitcoin transaction is via BlockChain system.

Cryptocurrencies are not controlling by any of the governments. It is a decentralized currency. So, the currency doesn’t have any restriction from the government body. 

If you still did not understand the concept of cryptocurrency. Then we will come from the basics. We will starts from the concept of money existence.

Everyone knew money is very essential and gives purchasing power to individuals. But the concept of money has come into existence in recent times. So, how people were transacting before the existence of cash.

Also Read: Success story of Dmart

Stage 1 of the money

Earlier, people are just exchanging items for their livelihood. If your rice is in your house, then you will exchange rice in order to get wheat. Then all were leading lives with mutual understanding.

But, this system was not efficient for a long time. Because of the exchange, Hungama had a lot of confusion and inefficiencies.

Initially, people were not getting the required food items in place of exchange. Then this lead to a problem and created disruption.

Stage 2 of the money

Now, people were exchanging goods via transactions of gold, silver, and copper metals. Where gold coins were the first form of a financial asset.

So, people are earning and also spending in exchange for goods. Each type of coin had value based on the material. 

Accordingly, a gold medal was the costliest of all the metals. Then copper was having a meager value.

But the concept of metal was not highly reliable for a long time. Even sometimes people use to cut the metal for the deal. So, the metals then turn to coins to get rid of the cutting of the metals.

As the metal fades and also deteriorating nature of the coins made people uneasy. Sometimes many coins were not in the proper conditions in exchange.

Stage 3 of the money

Finally, government intervene and decides to print the currency in proportion to gold collected by them. So, every individual exchanges one’s gold for the government-made currency.

Ultimately, there is no problem while the transaction. Later the government came out of new issues. Whenever the government is facing a severe shortage of cash and also due to some calamity, then there is a need for money.

During that emergency, the government did not have any gold to get in exchange for currency. 

Eventually, the government amended the previous law, that government had the right to print notes irrespective of the gold collection.

This system is continuing and has become the mandatory protocol to follow.

Money over Bitcoin Cryptocurrency

Now as all of you know money is a necessary factor to lead a life. But the value of money is controlled by the government.

The debt taken by the country and other natural calamities made the government urging to print more money.

Ultimately, the inflation rate increases and leads common people into trouble.

So, here money is an asset where it is totally under control by the civic body.

Here are some of the disadvantages of the investment on money

Firstly, the value of the money can be directly affected by the action taken by the government. The latest example is demonetization in 2016. Where the thousands and five hundred rupees notes were not a valid currency during the protocol.

So, it does not sound good where the government is controlling the finances.

Secondly,  rates of return on the fixed deposits are low. Also, there is no idea how the bank is using our money. Even sometimes bank lends our money illegally. For example, Harshad Mehta Scam 1992 depicts the bank wrong practices of the banks. 

Thirdly, the purchasing power of the money is decreasing as the inflation rate is skyrocketing day by day.

Fourthly, UPI payments record all our transactions in a ledger. Sometimes, it might affect the users indirectly. Where it might get the leak to the hackers. Then people are in great trouble.

These are some of the ill effects of having the money.

Advantages of the Bitcoins

Now people leaning towards investing in cryptocurrencies. Because the rate of return is high and also is decentralized. As it is now governing by any government.

1. A bitcoin transaction is fully secure and there is no chance of hacking. Even your transaction is saved in lakhs of the computer. Where no one can cheat over the transaction
2. Presently, one bitcoin value is nearly 30 lakhs. So the rate of return will be surely high. You can also buy bitcoin cryptocurrency in parts.
3. Blockchain technology during the transaction makes the transaction even more secure. Block means databases where it records all the transactions from XYZ persons. Chain means all the transactions are linked to one another.
4. The founder of the still anonymous. Some speculation claims the founder of Bitcoin is Satoshi Nakamoto. So, there is no danger of any primary body handling the system.
5. Bitcoin has a huge market share of over 65%. So, investing in bitcoins is not much risk.

Disadvantages of Bitcoin Cryptocurrency

Even though the bitcoin investment is vital but still we can’t ignore the facts. There are some of the disadvantages of Bitcoin

Firstly, Bitcoin value is not stable for the long period. Anytime the value of Bitcoin can lose its value or goes all-time high.

In 2017 value of bitcoin was $19000 but in 2020 it came as low as $4000. But now it is $ 360000 in 2021. So, this depicts the fluctuation in the value of the bitcoin.

Secondly, due to a lot of demand for cryptocurrency, there is a lot of competition. So, Bitcoin cryptocurrency is lagging due to several other cryptocurrencies such as Ethereum, Dogecoin, and Ripple.

So, these are some of the advantages and disadvantages of Bitcoin Cryptocurrency.

In this way, Cryptocurrency is ruling the present generation. It is still very risky in investing in Cryptocurrency. Ultimately, it all depends on the investors.

Top Indian Cryptocurrencies platforms

1. CoinSwitch Kuber
2. Wazrix
3. Zebpay
4. Binance
5. CoinDCX

Even many companies are ready to accept Bitcoin in the future. Even Elon Musks Tesla company is also assuring on accepting cryptocurrency.  

Ultimately, Cryptocurrency might become the future. So, investing in the Bitcoin cryptocurrency is still a good option to leave open for everyone