What is Bitcoin?This is a new terminology which has become the talk of the town and is being considered as a threat to dollar and to companies like Western Union which are into funds transfer. We will first understand that what is a Becton and to make it simple in layman words we can say that it is a digital signature and it is “mined” through an algorithm. The algorithm of Bitcoin looks like something as shown below in the image.
How a Bitcoin Functions?As a bitcoin owner, you will have a wallet with a public key and private key. People can send you bitcoins using your public key, and you send bitcoins using your private key. Every transactions of every bitcoin is publicly stored in a “block chain”. Only thing is - the people doing the transaction may be hidden or it may be difficult to get to them. But from a bitcoin, you can find out which wallet it now belongs to.
Pitfalls of Bitcoin
The price of a Bitcoin can increase or decrease with a great speed over a short period of time due to its young economy and limited availability. The impact of Bitcoin economy can be gauged from the fact that its price has fallen from $1120 per bitcoin to $600 per bitcoin moment Chinese Govt imposed sanctions on sending and receiving money through Bitcoin. Now it has recovered to $750. Practically one can not put a correct price for the Bitcoin as its supply is limited and demand may soar as more black money gets routed into it.