To make use of this virtual currency we will need to download a software in the computer or our mobile that will act as a virtual "wallet" and that will generate a bitcoin address, which can be used to send and receive money from other users. In addition, the sending of bitcoins is instantaneous and any operation can be monitored in real time. Transactions with this currency involve a transfer of value between two bitcoin addresses, public but anonymous. To ensure security, transactions are secured using a series of key cryptographies, since each account has a public key and a private key.
What can we do with bitcoins? Would it be possible to live only with bitcoins?
This virtual currency allows online shopping. In fact, it stands as a way of paying for services on the rise. There are many professionals who bill through bitcoins.
And how could it be otherwise, it is considered a new investment channel.
The advantages of bitcoin are:
Freedom of payments
Very low rates
Lower risks for merchants
Security and control
Neutral and transparent
Although we have found many advantages there are certain risks such as:
1) Loss of keys.
To avoid shocks we must ensure that our application for bitcoin transactions saves your keys. It is also recommended to make backups, that is, extract your wallet to a safe place without an internet connection with all the information, although there is always the risk that a malware can steal your password.
2) Scams.
The Bitcoin should not be understood only as a currency to operate in the network, but it makes even more sense its use in physical stores.
In this way, in case of complaint, the business will be subject to local laws and consumer protection, as well as the return of money. Bitcoin lacks this type of regulation by itself.
3) The volatility of Bitcoin.
The price of a bitcoin is unpredictable, it can increase or decrease in a short period of time due to its young economy and its novel character.
We have also wondered if the new phenomenon of bitcoin is really used or is just pure speculation.
There is a growing number of businesses and individuals using Bitcoin. Although Bitcoin is still a relatively new phenomenon, it is growing fast. At the end of August 2017, the value of all bitcoins in circulation exceeds 1.5 trillion dollars.
Is it really the legal bitcoin?
Bitcoin has not been made illegal by law in most territories. However, in some PAs (such as Argentina or Russia) foreign currencies are prohibited. Other countries (such as Thailand) may limit the licensing.
Why are bitcoins worth?
Bitcoins have value because they are useful as currency. It has the characteristics of money (durability, portability, fungibility, scarcity, divisibility and recognizability). Bitcoin is backed by mathematics. With these characteristics, all that this kind of money needs to maintain its value is trust and adoption. In the case of Bitcoin, we can measure it with its growth in users, merchants. Like any currency, the value of Bitcoin is obtained directly from people who want to accept it as payment.
What determines the price of bitcoin?
The price of bitcoin is determined by supply and demand. When the demand for bitcoin increases, the price goes up, and when the demand falls, the price falls. There is a limited number of bitcoins in circulation and the new bitcoins are created at a predictable and decreasing speed, this means that the demand must follow this level of inflation to maintain a stable price. Because Bitcoin is still a relatively small market compared to what it may become and that is why the price of bitcoin is still very volatile.
To conclude we can say that the world is living a process of adaptation to a new era, in which it is completely understandable that people reject this new payment system, either because of interests between countries or lack of knowledge.
