Things to consider before investing in bitcoin.Photo courtesy Pixabay.Bitcoin is a decentralized, peer-to-peer cryptocurrency system designed to allow users to process transactions through digital units of exchange called bitcoins. The key difference between bitcoin and fiat currencies is that it is decentralized and not controlled and regulated by any central authority.The creator of Bitcoin is Satoshi Nakamoto; it was invented in 2008 and released as open-source software in 2009. The first transaction took place between Nakamoto and an adaptor of Bitcoin in 2009.Bitcoin MiningBitcoin mining is the process of creating new bitcoin, performed by high-powered computers that solve complex computational maths problems. These problems are so complicated that they can tax even the most powerful computers. Mining is necessary to maintain the ledger of transactions on which bitcoin is based and has become very sophisticated over the years using complex machinery to speed up the operations.Why are the Governments afraid of Bitcoin?Bitcoin is a decentralized peer-to-peer payment network with no central authority or middlemen. There is no central authority to regulate it so the governments are afraid of cryptocurrencies.To understand this it is necessary to understand conventional currencies which are also termed fiat currencies. These are issued by the government and have value as the government says that they do. The fiat currencies are not backed by any tangible asset but only the full faith of the government that issued them.The government controls the fiat currencies through monetary policy using central banks to issue or destroy money and thus have a complete economic influence. They also decide how money can be transferred, which enables them to track currency movement, collect taxes and trace any criminal activity. When parties other than the government create their own currencies then the control of the government is lost.The control over currency has much impact\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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