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What is Bitcoin?
Many people only trade bitcoin as one of the profitable investment activities. This is influenced by the price of bitcoin itself which reached hundreds of millions of rupiah in 2017. Unlike money stored in a bank account, bitcoin is basically stored on a personal computer with a wallet file format, or stored in a wallet provided by a third party. For the definition of bitcoin itself, you can understand it according to the definition below.Definition According to Wikipedia
Bitcoin is an electronic currency used in transactions on the internet without using intermediaries or banking services. Bitcoin was created in 2009 by someone using the pseudonym Satoshi Nakamoto. The system used by bitcoin itself is a peer to peer (P2P) system. The bitcoin system works without storage or a single administrator where the United States Treasury Department calls bitcoin a decentralized currency. Unlike other currencies in general, bitcoin does not depend on one main issuer. Bitcoin uses a distributed database and spreads to nodes of a P2P network to journal transactions. Bitcoin also uses cryptography to provide various basic security functions, such as ensuring that bitcoin can only be used by people who actually have it, and can never be done more than once..
History of Bitcoin
On August 18, 2008, the Bitcoin.org domain was registered. This domain is protected by WhoisGuard, which means that the identity of its users is not public information. Then on October 31, 2008, Satoshi Nakamoto made an announcement on the Cryptography Mailing List at metzdowd.com. Then on January 3, 2009, the first Block of the bitcoin blockchain was launched which can be interpreted as a statement, a hint, or just a marker. Cryptocurrency users believe that this is a special statement from Satoshi after it appeared in the newspaper 'The Times: Chancellor on Brink of Second Bailot for Banks' on the same date. The first version of the Bitcoin software was announced on the cryptography mailing list on January 8, 2009. And the next day, block 1 was mined, and bitcoin mining began. You can learn more about the history of bitcoin in books or other sources. For those of you who want to know more about your own expertise in trading, you can do a Preliminary Test to measure how far your ability is in trading.How Bitcoin Works
There are ways that you can apply when using this cryptocurrency. How it works can also be divided into three, namely, blockchain, mining, and wallet. Bitcoin blockchain is a list of every transaction of one of the cryptocurrencies that has ever occurred. Before a transaction enters this chain, the transaction is not considered complete. As the name implies, blockchain consists of a collection of blocks that contain new transactions and are related to previous blocks containing old transactions. This blockchain is useful for protecting transaction data and digital money owned by miners and owners. The level of security is also high, so this bitcoin blockchain is difficult for hackers to penetrate. Next there is mining. In this mining, there are people who are tasked with guarding old transactions and ensuring that new transactions are recorded, as well as creating new blocks. For this service they will receive bitcoins. To get bitcoins you don't have to be a trader, but you can also become a miner. Until now, miners who get the highest pieces have only been able to get 12.5 units that come out every 10 minutes. However, there is a mathematical puzzle that miners must solve so that one of these cryptocurrencies can come out. The last one is a wallet. Bitcoin wallet is a part of bitcoin that users often see. This wallet is not a place to store one of these cryptocurrencies, but rather a wallet is a private key or key for the owner to add transactions to the blockchain at an address called a public key or can be called a bitcoin market. As previously explained, one of these cryptocurrencies is only stored in a transaction record called a blockchain.Benefits of Bitcoin
The benefits and advantages that you can get when investing using bitcoin are that there is a decentralized nature of bitcoin, which means that the process of transferring or exchanging bitcoins does not need to go through intermediaries, such as banks. When a bitcoin transfer occurs, simply update the blockchain network and it is very safe. Every bitcoin owner will get a private key and a public key. It's like at an ATM, the private key is the ATM pin, while the public key is the bank account number. These two keys are used to show bitcoin ownership and if a transfer is made, use a combination of these keys as the address and pin. Every crypto asset transfer can also be checked by looking at the block confirmation on the blockchain and also its support chain. In addition to the benefits of bitcoin, you can also get benefits from GIC by joining the Affiliate program by inviting friends so that you can get direct benefits from the program.Bitcoin Weaknesses
In every transaction, there must be a weakness that arises from the transaction itself. So is bitcoin. In bitcoin, there are several weaknesses of its own, namely:- Mining is damaging to the environment. Bitcoin mining refers to the energy-intensive process required to generate new coins and ensure the payment network is secure and verified. The electricity used when transactions are validated on the bitcoin blockchain is certainly not good for the environment. Crypto miners use specially built computers to solve complex mathematical equations that effectively allow coin transactions to take place. Miners are rewarded for their efforts by being paid in crypto. However, the entire process used to create bitcoins is energy-intensive and can consume more power than entire countries such as Finland and Switzerland.
- The second is that bitcoin is not very anonymous. The whole idea of bitcoin is to provide pseudonymity. But it turns out that if you use bitcoin a lot, and especially if you use bitcoin to purchase goods and services, it eventually becomes possible to link your physical address or identity to your digital identity. Interestingly, there are other cryptocurrencies that are trying to fix this and offer more anonymity.
- The next weakness is that bitcoin does not function well as a currency. In theory, bitcoin should provide an anonymous and efficient medium of exchange, but this has not worked. Instead, bitcoin is considered slow and impractical as a means of payment for goods and services, especially since the market is very volatile. Bitcoin is prone to large swings in volatility, as seen by a 30% drop in a single day.
- Vulnerable to fraud. There have been many fraud tragedies that have befallen its users. Because of its digital form, it is not uncommon for hackers to attack its users' bitcoin wallets.
- No refunds. Lack of a refund policy like all credit card companies and other payment methods have. This certainly results in users who are scammed when making transactions with bitcoin, not being able to request a refund.
Advantages of Bitcoin
When compared to other cryptocurrencies, Bitcoin has its own advantages, including:- Greater liquidity. As a cryptocurrency with a significant margin, bitcoin has greater liquidity compared to other cryptocurrencies. This allows users to maintain its substantial value when converting bitcoin into flat currency. This flat currency is money whose value comes from government regulations or laws. This is different from other cryptocurrencies. Most of these currencies cannot be exchanged directly for flat currency. In fact, some lose substantial value when exchanged.
- Many accept it as a payment method. There are hundreds of online stores that have accepted bitcoin as their payment method. This is certainly very beneficial for bitcoin users in making transactions.
- Lower transaction fees. Bitcoin transaction fees are relatively lower when compared to other digital payment methods such as credit cards or PayPal. Typically, bitcoin transaction fees are no more than one percent of its value. This is in contrast to other digital payments that charge 2-3 percent.
- International transactions become easier. Bitcoin is one of the most popular cryptocurrencies in the world. That way, its users can make international transactions easily. In fact, using bitcoin does not require special bureaucracy.
What is Bitcoin Mining?
Bitcoin mining is one way to get bitcoin itself. We can see bitcoin as a large global cash system by storing the history of the movement of money from one person to another. In the case of bitcoin, this process is not done by individuals or companies, but by thousands of computers around the world connected to the internet. These computers are known as miners, which in simple terms, they are computers that process transactions. With bitcoin mining, the cost of this global system is shared across thousands of computers, and they cover the costs with newly mined bitcoins. So it can be concluded that this is an act of democratization of infrastructure in the financial field. Before continuing with some questions about bitcoin, you can also consult GIC by filling out the Trader Assessment so that you can ask other things about trading.Bitcoin FAQ
For new users, or someone who is new to investing and trading or other online transactions, there are certainly various questions that arise about bitcoin itself. This time we will learn a little bit of some of the questions that are often asked by the general public about bitcoin itself.Is Bitcoin a Scam?
Actually, bitcoin is not a fraud. However, it is possible that bitcoin can also be used as a means to deceive its users. So what you need to do is know how the characteristics of bitcoin fraud in crypto transactions themselves.
- What you need to know is that crypto operates on a blockchain network. Without blockchain, bitcoin does not exist. You need to know whether the blockchain exists or not. Because usually scammers or fraudsters will claim their blockchain is under development or even about to be released. A legitimate blockchain will have an official website that allows you to verify its existence.
- Be wary of crypto tips from anyone. Multilevel marketing, or MLM, scammers often use crypto language to persuade people to refer friends, promising them bonus payouts for recruiting more members. However, crypto projects do not use a membership system but have investors. You can go to a price tracking website like CoinMarketCap or others to get real-time and historical data on coin prices and trading volumes. If the token is not listed in the tracking, then it is a scam.
- Investing in crypto using bitcoin does not guarantee continuous profits. Nothing is certain in crypto. Scammers will later claim to have developed high-tech solutions that can guarantee profits. However, experienced investors claim that bots will not do such things. No supercomputer, AI tool, or anything else can guarantee continuous profits on this crypto.
Is Bitcoin Gambling?
According to the Indonesian Ulema Council or MUI, Bitcoin is part of the development of digital technology that wants to create a means of exchange for transactions and even investments outside of central bank contracts or anywhere in the world. Some scholars say that bitcoin is the same as money because it is a means of exchange accepted by the general public, a standard of value, and a means of saving. If bitcoin is used as a means of exchange, then the law is permissible or permissible, while bitcoin as an investment will be closer to the law of gharar (speculation that harms others), but bitcoin will turn into haram if it is only used as a means of speculation and not for investment.Is Bitcoin a Money Game?
Every money game certainly promises attractive profits for participants who want to deposit a certain amount of money within a certain period of time. Generally, this kind of money game will be disguised as an investment, but in reality it is just a ponzi scheme. Where the interest paid does not come from money deposited by new participants. While cryptocurrency is a pure currency like dollars and rupiah.Is Bitcoin Digital Gold?
Bitcoin can be considered as digital gold because it has the same characteristics as gold itself. Because the amount of gold is rare, so is bitcoin, gold is also stable and does not degrade, is easily recognized, and is difficult to imitate. Likewise with bitcoin which has similar characteristics. However, unlike gold, you can move bitcoin anywhere in the world in minutes. This is what causes people to call bitcoin digital gold, but better digital gold. Before continuing to the next question, you can fill out an internal survey so that we can find out how much user satisfaction is on the platform we have developed.Is Bitcoin a Crypto?
As explained earlier, bitcoin is a means of payment in the cryptocurrency market. So it is not surprising that everyone thinks that bitcoin is crypto. What is the relationship, and how does it work. In fact, bitcoin uses cryptography to provide basic security functions such as ensuring that bitcoin can only be spent by the person who owns it.Is Bitcoin a Ponzi?
A Ponzi scheme is an illegal investment mode that gives investors profits from their own money or money paid by subsequent investors. This Ponzi scheme usually entices new investors by offering higher profits than other investments in the short term with very high rates of return. However, Bitcoin is not one of these Ponzi schemes because Bitcoin is not offered as an investment tool but as a means of exchange that has innovative technology in it. Bitcoin is also something that has a clear product and has a broad ecosystem.
