Blockchain is a revolutionary technology because it establishes trust in the exchange of digital goods, even when no intermediary/third party (bank, state institutions, or anyone else) is involved. The only thing similar to a mediator doesn’t have a human face. We are talking about a mathematical algorithm that solves complicated problems faster than any person could imagine them.
As we have already indicated, the blockchain requires that specific devices, which have the status of a node, validate the transaction. Specifically, matching transaction information is required on each of the mechanisms of which the network consists. This blockchain structure can seem complicated, but it brings several significant benefits.
Benefits of the Blockchain Structure
First, the possibility of fraud, such as unauthorized copying of cryptocurrency or data theft, is virtually non-existent. The program code doesn’t suffer any deviations in a validation. Breaking the cryptographic key is a complicated undertaking: to succeed, the transaction record on a massive number of devices would have to be changed.
It’s incomparably easier to hack bank accounts and credit card information than to compromise blockchain security. Many would agree that it’s almost in the domain of science fiction or at least economically unprofitable.
Finally, we want to point out that if you value anonymity, cryptocurrencies are a dream come true. Transactions don’t require you to submit any personal information, not even your name. Instead, all you need is a digital wallet tag, also called a key. There’s no need for anyone to access your complete financial history, as banks that issue credit cards and other business services do.
The “King” Bitcoin and Competition
Bitcoin is the first and most famous cryptocurrency on the planet. Namely, it’s used as a barometer to assess the state of the entire crypto-market. And as you probably know, the story of price flows is the story of inherent instability. During 2010, the bitcoin value was $ 0.003. After a series of ups and downs, it multiplied, reaching the dizzying mark of $ 20,000 in December 2017. In early 2018, there was a slight drop to $ 18,000 and a much sharper one in April ($ 7,000) and November ($ 3,500) of the same year. This trend has caused panic across the market. However, new rises were recorded last year, and in November, the bitcoin value was $ 10,000.
During the COVID-19 pandemic, the price of bitcoin was $ 6,900 – 7,000. It should be borne in mind that the maximum number of bitcoins that can exist in circulation is limited to 21 million. We haven’t yet reached that limit (about 3/4 of that amount has been mined so far), and until that happens, the additional supply will continue, although at a slower pace.
Choose Payment Method Carefully
Before you decide where to buy bitcoin (specialized ATMs and exchange offices, gift vouchers…) and how to trade it (peer-to-peer, investment trusts…), you must decide how to buy it. Of course, we assume that you didn’t skip the step of downloading the bitcoin wallet.
Traditional payment methods are credit card, bank-to-bank transfer (via Automated Clearing House network), or debit cards. Check out how to buy bitcoin with a credit card. Buying through PayPal isn’t used so often due to so-called reimbursement or return shipping costs due to which most private sellers tend to be wary of such transactions.
Bitcoin Is One Part of a Puzzle
Of course, bitcoin is only one part of a larger crypto-puzzle. New cryptocurrencies are appearing almost daily. Some of those that have remained and have great support are Ethereum, Ripple, and Litecoin.
Litecoin is an interesting example because it was practically created by separating from bitcoin in 2011. Not only that, but it also has two significant advantages over bitcoin. The speed of the transaction is four times higher. At the same time, the reward in mining, depending on the current value of the cryptocurrency and the market situation, can be more than double (when it comes to the number of litecoins that the miner receives).
This tells us that bitcoin is far from the only valid investment option, but is undoubtedly the most accurate.