What Is Bitcoin: Key Pros & Cons to Know 2021

Bitcoin has been on everyone’s mind for several years. It’s mostly strategies how to be able to earn money with the Internet currency. However, very few people know what exactly Bitcoin is and whether it is worth trading with it. Today, we’ll consider key advantages and disadvantages of BTC and give tips for beginners. 

What Exactly Is Bitcoin?

Well, Bitcoin is a digital currency. It is not exactly known who was its creator. If you search for the creator you’ll only get a Japanese pseudonym. A computer specialist behind this pseudonym is supposed to hide his real name, which hasn’t been made public yet.

Bitcoins have existed since 2009. They aren’t issued by a bank, but by an international community. The amount of BTC is artificially limited so that its buyers are protected from inflation. There can only ever be a maximum of 21 million bitcoins in circulation.

It’s interesting that bitcoins can be created by users themselves through what is known as ‘mining’. This is achieved by solving complicated math formulas. 

However, in order to be able to solve the mathematical formulas, high computing power or a powerful graphics card is required. That’s why BTC mining isn’t of interest to newbies. Alternatively, a special circuit, also called Bitcoin ASIC, can be used. Thus, investors can join mining pools and get bitcoins.

Key Advantages of Bitcoin

Bitcoins can be used to pay all over the world. This is a decentralized means of payment with which anonymous transfers can be carried out. The only exception is cases of fraud in which a transaction can be traced. No special hardware is required to pay with bitcoins, any computer can be used for this.

Regular transfers to foreign accounts can be quite expensive, but not with Bitcoin. These are either completely free or cost a small sum of less than 1 cent. The reason for this is that the transfer isn’t made from one bank to another, but rather the internet currency is transferred directly from one person to another.

Initially, bitcoins were of limited use as a means of payment. With the rise in popularity, however, the number of shops and online stores in which you can pay with virtual coins has risen sharply. This gives them more and more practical importance, which in turn ensures greater awareness and further increases their value.

Bitcoins are also protected from inflation in the long term thanks to the limit of 21 million coins. This makes them particularly interesting for investors, as they are a comparable investment option to gold or silver.

Bitcoins can be purchased quickly and easily. All you need to do is make a transfer on a crypto exchange. Since the currency is mainly used online, real cash cannot be lost or stolen.

However, physical bitcoins also exist. These are known as Casascius Coins and have a key on the back, which is located under a hologram sticker. The sticker is protected against forgery.

Key Disadvantages of Bitcoin

Since bitcoins have only existed for a few years, the entire system is still relatively experimental in its structure. The rate of BTC can also fluctuate strongly. Here the system of supply and demand plays an important role so that the value increases or decreases depending on interest.

Anyone who buys bitcoins cannot keep them in a bank account. Instead, a virus-free computer or a corresponding online service that ‘stores’ coins is required.

After all, the number of shops, in which BTC payments are available, has increased but they still cannot be used across the board as a means of payment. With society’s increasing interest in bitcoins, however, this may change soon.

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