In this article we are going to explain clearly what Bitcoin is, so that you understand once and for all what it consists of, what it is for and why it has become so popular in recent times. If you want to be aware of all this, continue reading.
What is Bitcoin?
With the name of Bitcoin, a virtual currency has been identified that serves as a means of electronic exchange in the purchase of products and services, just like conventional money.
However, this currency is not regulated like conventional money, since it is decentralized. This means that there is no authority or entity in charge of controlling it, who is also dedicated to its issuance and the registration of the movements that are made with it.
As it is a virtual element, it works through a cryptographic key that is associated with a digital wallet, which can be used to collect and issue payments.
How is Bitcoin used?
In order to use this type of currency, you must comply with a series of steps that we will indicate below.
1. Get a wallet
You require a system to store and mobilize Bitcoin that is known as an electronic wallet, it contains pairs of cryptographic keys that are made up of a public key and a private key.
2. Download the app
You will need a suitable application to access your virtual wallet from your computer or mobile devices with an Internet connection, this is used to carry out all kinds of operations easily.
3. Make transactions
Now you only have to use Bitcoin to pay for services and acquire everything you want with other users who also have virtual wallets.
Aspects to consider about Bitcoin
There are some aspects that should be taken into account before starting to use Bitcoin as a payment method, because although there are similarities, it is a system quite different from the conventional one.
1. Cryptocurrencies traded on web platforms have high volatility in the market due to their lack of regulation.
2. The Central Bank of China has warned about such volatility, because in a single day it devalued by 15%.
3. In Colombia, Bitcoin has not been made official as a currency before the Banco de la República, which is why it is not considered a legal payment method and there is no obligation to accept it in exchange for products and/or services.
4. According to the Superfinanciera, virtual currencies lack the backing of physical assets and reserves of central banks, so that their exchange value with respect to real currencies could depreciate to zero.
5. In Supersociedades, emphasis has been placed on the statement that investors need to be aware of the existence of numerous risks when investing in virtual currencies that have not yet been accepted as legal in certain countries.
6. In this same order of ideas, virtual currencies are not considered currencies either because they lack the backing of a Central Bank and cannot be used as a payment method in an exchange operation.
7. Due to the fact that Bitcoin is not regulated by any law in Colombia, for example, it is difficult for investors to recover the resources they have deposited to acquire this type of currency and that is an important risk that must be taken consider.
8. The platforms in charge of trading virtual currencies are located in various countries, which makes their control and regulation difficult.
9. Transactions made with cryptocurrencies are anonymous, so they cannot be traced to determine if they come from illicit activities.
If you want to find out about the cryptocurrencies that are currently being used, the trading techniques and other methods that are trending today for the world economy, we invite you to visit the articles that are published on our website, you will surely find them very interesting.