What Exactly Are Bitcoins and How Do They Work?

What are bitcoins? This question came up prominently ter Kenya recently after reports of international laptop hackers who were requesting ransom te terms of bitcoins. Many people around the country appeared not to know what bitcoins are and what they are all about except a few ter the financial sector.

Bitcoins, unlike other currencies, are currencies that are banked virtually on the internet. Bitcoins, therefore, are not found ter the banks but transacted and stored on the internet. They are electronic te nature. For you to understand bitcoins, you voorwaarde have some skill about mining. This is because those who take part ter the transaction of using bitcoins are called miners. The coins are transacted across computers using the internet ter an encrypted form known spil cryptocurrency that is transacted digitally. This is simply electric current converted into some codes that are accorded with money value.

Many people have misunderstood the use of bitcoins and millions of people are not aware of their existence either. Many coerces, especially from the banking sector are against the use of bitcoins simply because the transaction takes away the power of making, transacting and treating money from all the legal federal banks around the world and give them to the people te public. Many financial institutions are against the use of bitcoins because they see them spil a threat, a force that if left to wander loosely ter the market is likely to bring them down and form them out of the money business.

There is also the question of whether the question of whether bitcoins are legal, where they come from and whether they can be regulated. Many criminals around the world who would not like their financial records tracked have bot using bitcoins. The practice has bot rampant since early 2011 and the most latest one is that of global laptop hackers who have bot requiring thick amounts from their victims te form of bitcoins.

The fact is bitcoins have bot demonized, made to be seen spil evil and a threat to the economy. Nobody has bothered to drum for them or create awareness for them. There is even a rumor that some of those who have attempted to thrust for the use of the bitcoins have bot eliminated from the face of the earth by some economic powerful coerces. But, even with the resistance, the bitcoins sector is making billions and billions of profits. One thing about bitcoins is that they can be converted into any form of currency and moved to any part of the world without any limitation.

Before learning how to use bitcoins, one should very first understand that bitcoins are not tangible currency. They are virtual. They are electronic codes that have bot valued te terms of money. They cannot be stored te banks and they budge via the internet.

Let us take bitcoins ter terms of gold. Gold is not a currency but it possesses a currency value. Wielding a bitcoin is just like having a chunk of gold ter your possession. What this simply means that you do not have money but you have something that has bot valued ter terms of money. Bitcoins are used te purchasing of goods and services via the internet. The interesting thing about them is they can be reserved just like shares and their value varies with time.

How are bitcoins transacted and stored?

Spil mentioned earlier, bitcoins are downright virtual and can only be transacted via the internet. They cannot be cashed out into hard metselspecie but they wield the value of real specie. They are stored te rekentuig drives te what is known spil ‘wallets’. Wallets can be ter terms of apps on either a laptop or a mobile phone whose major purpose is to keep the bitcoins for the use when the need arises. Some people fear the use of bitcoins because they think that they can lightly be manipulated. Bitcoins are more secure than the real currency because it is not effortless to make fake bitcoins. Making fake bitcoins has no value and so nobody bothers to waste time attempting to make something that will be valueless.

Spil mentioned above earlier, bitcoins are such limber that they can be turned into any currency. For example, they can be turned into Dollars, Euros or shillings depending on the needs. The value of a single bitcoin varies ter value with time. According to financial experts, more than ten million bitcoins are ter circulation and being used by various people.

Who regulates the bitcoins?

Bitcoins are downright unregulated. No one has a voorkoop of bitcoins and no one can rechtsvordering to be regulating them. Bitcoins are not tied to anything. They are not tied to any currency either. They are like the free wind that can turn to any direction. Wij can say that the regulator of a bitcoin is the bitcoin itself. It determines its own value and can be switched into any form and no one can switch it.

Advantages of using bitcoins

There are many advantages of using bitcoins te transactions, purchase of goods and services. the economic world is switching and however much people may fight back switch, it keeps on happening. The advantages include the following:

  1. There are no transaction fees while using bitcoins. Recall that bitcoins are not prone to regulations and cannot be levied by banks. There are no banks involved but individuals using the internet. The toverfee available is very little ter terms of cents by the mining pools you join. The owners of a mining pool determine the transaction toverfee (cents) every time you transact using the bitcoins.
  2. Bitcoins can be possessed by anyone ter the public and there are no limitations on ownership. They only require a strong pc or smartphone and all will be done. According to financial experts, only 21 million bitcoins will everzwijn be ‘mined’ and this is prone to be achieved by 2040. Already, about 11 million bitcoins are te circulation.
  3. Transaction by bitcoins is convenient. It only needs a pc that is strong enough to work and one is set to begin earning.
  4. Bitcoins are secure. They are stored ter an electronic wallet and one only needs to back up the wallet for security. The only risk of bitcoins is from hacking which infrequently occurs.

About Juma Fred

Juma Fredrick is an enthusiastic reporter who believes that journalism has power to switch the world either negatively or positively depending on how one uses it. You can reach him on: (020) 528 0222 or Email: [email protected]

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