Bitcoin is a digital currency for which the working model is completely different from the regular currencies. This currency can be used and exchanged only if the internet is present. The wallet in which we store the bitcoin is known as the digital wallet. The digital wallet can be an application or a website like a phoenix website, which can be downloaded on a mobile phone or kept on a computer. Whenever a transaction of bitcoin is happening, then the recording is done in a blockchain.
Why was Bitcoin Invented?
Generally, whenever there is an exchange of the currency between two parties, then the bank or a governing body is involved also can be called a “third party.” However, if there is an exchange of cryptocurrency such as bitcoin, there is no governing body role. The transaction of the bitcoin is anonymous. The person is not aware of the person to whom he is transferring the bitcoins. After the transaction is successful, the address gets generated, which is the transaction address. Bitcoin is a virtual currency. Therefore, to eliminate the role of the third party, the cryptocurrency was invented. For example, if we keep the money in the bank, then the bank is deciding where it wants to invest our money. However, if someone is investing in the bitcoin, it is controlled by the bitcoin owner.
How to purchase the bitcoins?
Many applications and computer software provide bitcoins and information about bitcoin, like the phoenix website. If someone wants to purchase the bitcoin, then the bank account number must be provided, and the bitcoin can be purchased. The exchange of the digital currency can happen at any time. Bitcoin can be used to buy software, holidays from the company, which accepts it.
Actual Investment and the Virtual Investment
Bitcoin is a kind of investment. There are two kinds of investment which are existing that is an actual investment and the virtual investment. Actual investment means the public invests in the bodies such as Provident Fund, fixed deposit, Mutual Fund, Gold, which are controlled by the government. Virtual investment means there is no role in the government. There is no foundation for the virtual investment. Bitcoin is a virtual investment. The Long Term Value proposition for virtual investment is unpredictable. Bitcoin is a good investment only for those investors who have agood amount of personal disposable income. The predictability cannot be done on virtual investment, and the monitoring is also not present. The virtual investments are very volatile and fast. There is no calculation and computation.
The chances for the cash out in the actual investment are possible; however, it is impossible for the virtual investments. If we want to increase the investment return, then the money has to be invested in the business where we can calculate the return.