Bitcoin

What is Bitcoin? Know All Before Investing!

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The name bitcoin has been on everyone’s mouths for the past few months. You will be surprised to know that while the year 2021 was a year full of mourning and troubles, on the other hand, bitcoin made it’s all-time high this year (about Rs 60 lakh).

In today’s article, we will try to get complete information about this bitcoin. So first of all let us understand what is this bitcoin?

What is Bitcoin?

Bitcoin is a form of digital currency that is used for secure online transactions. It is the first and most famous cryptocurrency. Cryptocurrencies are a type of digital currency that ensures secure online transactions using cryptography. Unlike physical cards such as credit cards or debit cards, it does not have a physical form. These are mainly series in the form of 0’s and 1’s which are stored on computers all over the world.

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There is controversy and different ideologies among people regarding the coin. Despite this, big companies like Microsoft, Twitter, Starbucks etc. have accepted this as a legal transaction currency.

Production of bitcoin

As we have already discussed that bitcoin is a digital currency that does not have any physical existence. But this does not mean that its production is easy, it takes a lot of effort and energy to make it.

Bitcoin is brought into existence through the process of mining and it requires electricity which increases the cost of production. People who do its mining are known as MINERS. The process of mining involves solving difficult mathematical and cryptographic problems. Miners are rewarded in the form of a block of bitcoin for solving these problems. Since these problems are not easy to solve, this process is very difficult.

The process of mining takes a lot of time and only a limited number of bitcoins are made from it. Since their supply is limited, the demand increases, and hence the demand is increasing continuously.

Apart from this, there is a lot of competition in the market for bitcoin, due to which its price increases. However now people are also getting attracted to other types of Cryptocurrencies (like Ethereum, Stellar Ripple, etc.).

Can you buy bitcoin in India?

If this question is going on in your mind as well, then the answer is that you can buy bitcoin in India and its process is also very easy. We can choose from many cryptocurrency platforms like CoinSecure, Zebpay, UnoCoin, etc.

To register on these platforms, we have to submit these documents –

  • Aadhar card
  • pan card
  • bank account
  • E-mail address
  • phone number

Buying or selling of bitcoin in India is not illegal but bitcoin is not regulated by any government authority but in the future some rules and guidelines are expected to come related to it.

Now the question must be coming in your mind that what is the minimum amount of bitcoins you can buy?

If we talk about the latest price of this cryptocurrency, then it is around 41 lakh rupees. You will be surprised to know that for the price of one bitcoin, you can buy a flat in any major metropolis.

But this does not mean that you should have a minimum of Rs 41 lakh to invest in bitcoin. You can invest in it even with the help of little money. You can buy even a small part of bitcoin by investing Rs 500. As we discussed that there is no government authority to regulate bitcoins, so there is no rule of any kind regarding the minimum quantity to buy. You can invest in it as per your wish. But we should keep in mind that only 21 million bitcoins can be mined out of which 18 million have been mined and only 3 million bitcoins are left which are yet to be mined.

How to earn from bitcoin?

As we know that the basic mantra of investing is patience. The more patience you have, the more your chances of getting a good reward increase. Those who bought bitcoin a few years ago and are sitting on it till date, then they have benefited a lot.

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If you want to make money in less time than this, then you can also trade in it like the stock market. Apart from this, you can also get interest on bitcoin by lending it to other people. Apart from this, if you are an expert in this field, then you can also make money by teaching other people about it.

Withdrawing profit of bitcoin-

If you are getting a positive return on your purchased bitcoins and you want to withdraw them then its process is very easy. You have to go to your nearest crypto exchange and there you can get the profit in the form of physical currency.

Since the entire system is decentralized, the facility of direct transfer of returns or profits to the bank account is not available. Due to decentralization, the process becomes very transparent and apart from this, till now there has not been any kind of government statutory law on it.

But that doesn’t mean you can’t sell or use bitcoins. You can sell them on the bitcoin exchange and with their help, you can also shop on many e-commerce platforms.

Risks in bitcoin investing

The biggest risk about it is that its price fluctuates a lot in a very short time. Even if any kind of hacking or fraud case comes to the fore related to them, there is a possibility of their price coming down drastically. Apart from this, due to their lack of physical existence, they can also be stolen from your system. Even when trading in bitcoins, there is a risk of falling into the trap of fake or illegal coin exchanges.

Conclusion

Because of bitcoin, a different issue has arisen regarding currencies all over the world. Everyone wants to become rich overnight by investing in this coin but we should also be aware of the risk involved in it. Fluctuations in their price can cause you huge losses. So you should invest according to your ability.

We hope that after reading this article you will get to learn a lot about bitcoin and you will definitely learn something new.

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