Hi dear friends and readers,
As promised, this is the first part for Ally’s Thoughts: Bitcoin is a scam? Part 1. Again, Bitcoin is not a scam? Let me tell you why it is not.
A Digital Asset
Bitcoin (BTC) is a type of digital asset, also known as virtual asset, cryptocurrency, and virtual currency. Imagine a gold bar, Bitcoin is the gold of the internet. It is also similar on how our physical money, deposited into the bank and we transferred the money into our e-wallet or digital wallet.
Unlike normal currencies like US Dollar (USD), Japan Yen (JPY), or Malaysian Ringgit (MYR) issued by the country’s central bank. BTC is a decentralized asset. Which means, no entity have complete control over BTC. Doesn’t make sense? At first it is but nothing is impossible nowadays.
You probably have been wondering how a type of asset are not centrally governed. BTC is using a technology called blockchain. Blockchain is a digital ledger that will record every transaction into a block and chained with the previous blocks. It is you are writing all the transactions in a book and after each page is verified, it will move on to the next page.
Normal book means you are the keeper, so you own the book and keep all the transactions right? That is not the case in blockchain because it is recorded and shared within its network. It is like everyone in your family have the same exact copy of the book and it is updated in real time using a system. Lets say you lost your book, you just need to copy from one of your family members and that’s it. Everything is there.
Unlike physical money that is printed by the central bank, BTC is produced by the blockchain technology. How? Each new transactions and blocks will be verified and approved by a number of computers in the network. Once the transactions and blocks approved, the blockchain will reward each computers a certain amount of BTC.
Remember the example above about your family having the exact copy of the transaction book? Every time a transaction is recorded in your book, your family members need to verify and approve it. Then, they will be rewarded by the system.
However, the BTC supply is capped at 21 Million. Currently, it is around 18 Million in circulation. This is why Bitcoin is considered valuable for some people.
That’s all for this part. I am trying my best to get too technical. If there are anything that you want me to clarify, do write me a comment.
Ally’s Thoughts: Bitcoin is a scam? Intro
Ally’s Thoughts: Bitcoin is a scam? Part 1
Ally’s Thoughts: Bitcoin is a scam? Part 2
If you are new to my site, help me to grow my social media below! Thanks in advance 😀