Of late , there is a lot of news about
Bitcoins
It says , there are Bitcoin miners and Bitcoin traders and Bitcoin
exchanges
But , what is a Bitcoin ?
I am a Bit-Confused !
In case , you wish to be a Bit-Confounded , I suggest
you study :
Or , go to Google and just search for
Bitcoin
But here is my understanding :
·
It is not any 3 dimensional physical thing which you can touch with your
hands
It is a “ unique piece of software code
“, generated by software geeks , using a very complicated Mathematical Algorithm
This “ Mining “ of a Bitcoin is somewhat like solving a SUDOKU or a
CROSS-WORD puzzle, of which , there are only a total of 21 MILLION correct “ Solutions “ - making
its supply LIMITED
These geeks are called
Miners and it takes many days of working on a computer ,
to
Unearth / Discover / Mine , just ONE Bitcoin
·
Each “ discovery “ ( no matter by
whom and from where ), is recorded /
stored and its “ ownership “ established and made known publicly to everyone
·
Obviously , you cannot carry Bitcoin in your wallet like a metal coin of
Rs 5
·
Hence , a Bitcoin is of very little day to day “ practical value “ to
you / me
·
It is this RARITY (
limited supply ) , that gives its VALUE to the Bitcoin
In this respect , it can be
compared with a metal called GOLD ( as opposed to another metal called IRON ,
which has plenty of SUPPLY , and therefore , a low value )
·
You can also compare
a Bitcoin with a painting of Van Gogh / Picasso / Cézanne / Monet / Hussein / Ravi
Verma etc
There are just a few /
limited number of these available ( SUPPLY )
Their VALUE lies in their RARITY ( - and in the HUMAN
GREED ! )
·
Art Connoisseurs buy
these paintings at auctions , for millions of dollars ( only to lock up in
vaults – no practical value ! )
·
Traders (
auctioneers ) , come out with fancy / expensive brochures and even SELL these
brochures ( of course , for a fancy price ), among the potential rich buyers
Now ,
you get the idea !
Just as the Beauty of a piece of RARE painting lies
in the Eyes of the beholder ( and goes on increasing , with time ) ,
The VALUE of a Bitcoin lies in
the mind of the buyers and keeps increasing
as more and more traders / speculators , enter the market !
Yesterday
, its value reached $ 3200
per piece !
But if you want to
bid – and buy – a rare painting at an auction , you need to have a fat /
official bank balance in dollars and must pay for your purchase only through
official banking channels , in a transparent manner !
But as a recent Malaware ( WannaCry ) showed , Bitcoins do not
form part of official banking channel ( national and international ) and can be
used for Ransom / Terrorist activity etc , without any knowledge of governments
.
Very difficult to trace who owns , how many , since when and bought
from where and at what price
Or worse ,
generation of tons of BLACK MONEY , through BitCoin hawaala !
After reading this , it would be understandable , if you are a
Bit-Scared !
07 Aug
2017
www.hemenparekh.in / blogs
No offense but this is the worst explanation of bitcoin i ave ever read.
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