Bitcoin is the world’s largest cryptocurrency created in 2009 by an unknown person or group of people using the alias Satoshi Nakamoto & is commonly abbreviated as “BTC.” Unlike government-issued currencies, Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralised authority .
People can buy or sell bitcoins using different currencies at marketplaces called “Bitcoin Exchanges” . All bitcoin transactions are verified by a massive amount of computing power.
USES OF BITCOIN
Bitcoins can be accepted as a means of payment for products sold or services provided. It can easily be added as a payment option by an online business like other online payment options such as credit cards, Paypal etc.
In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation.
Since there is no credit card fees , they are more suitable for small business as they are cost-effective. The unique features of bitcoins such as micro-payments, which are generally not possible in other financial systems create new financial opportunities and drive for new online business models and marketing strategies.
WORKING OF BITCOINS
Each Bitcoin is basically a computer file which is stored in a ‘digital wallet’ app on a smartphone or computer. People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people. Every single transaction is recorded in a public list called the blockchain. This makes it possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies or undo-ing transactions.
HOW TO BUY BITCOINS ?
In India, people can buy bitcoins from some trusted apps such as Zebpay, Coinsecure, Unocoin etc. The minimum amount that is needed to begin investing in Bitcoins is around Rs.500.
Firstly, you will need to get yourself KYC (Know Your Customer) verified. For that, you need to submit your PAN card and a valid address proof. Next is a bank account. Make sure that the PAN and bank account belongs to the same person. The verification process takes about 2-3 working days.
Like any other asset, the principle of buying low and selling high applies to bitcoins. The most popular way of amassing the currency is through buying on a bitcoin exchange, but there are many other ways to earn and own bitcoins.
RISKS INVOLVED IN BITCOIN INVESTING
There are several risks associated with Bitcoins investing including regulatory risks, insurance risks, security risks etc.
The lack of guaranteed amount & uniform regulations, bitcoin price manipulations & digital risks such as security attacks from hackers, malware, and operational glitches are some of the reasons why Bitcoins have not gained much popularity as an investment option .