Novices are constantly scouring the internet to find information on Bitcoin for beginners to get themselves solid information backed by incidents and instances. Here is what they have been looking for throughout.
The introduction of Bitcoin (BTC) is one of the most exciting and disruptive techno-social phenomena in recent times, where Bitcoin is the genesis of it all. Bitcoin is a decentralized network that allows users to transact directly, peer to peer (P2P), without a middle man for managing the exchange of funds. The digital asset is used just like other assets in exchange for goods and as well as services. Unlike traditional currencies like fiat and assets, bitcoin is very easily portable, divisible, and irreversible. Bitcoin accelerates the system efficiency and enables the provision of financial services at a tremendously lower cost, offering users more power and liberty.
Bitcoin For Beginners Explained: The Experts’ Take
In this interview, we have two essential personalities that will help beginners understand the concept of Bitcoin, making Bitcoin for beginners a worthy read. First, we have Mike Novogratz, the founder and CEO of Galaxy Digital, a former Partner and President of Fortress Investment Group LLC. He has spent 11 years at Goldman Sachs. When questioned about what he exactly thinks Bitcoin is, he states,
“I originally thought that Bitcoin would end the year at 50 or 60,000. Things are happening so much faster than I had predicted. People see it less as a security risk. Major banks are climbing on board cryptocurrencies”.
We were successful in convincing Olga Kharif for an interview on the basics of bitcoin for beginners. We believe her interview will be very beneficial for beginners who have just started with Bitcoin.
Olga Kharif: Hello, I am Olga Kharif, and I cover crypto that has been in the news a lot, especially last year when the price of Bitcoin quadrupled and also earlier this year when Bitcoin hit new highs.
Interviewer: So, What Exactly Is Bitcoin & Where Does It Come From?
Olga Kharif: The best way to think about Bitcoin is that it is a digital money. It’s essentially a software. So back in 2008, a person or persons named Satoshi Nakamoto released a white paper essentially explaining this idea, and then the following year, this network on which Bitcoin runs made its debut, and very quickly, bitcoin got an awful lot of followers among first programmers and libertarians and then among just regular investors and more recently the institutional investors as well.
Interviewer: How Does Bitcoin Work?
Olga Kharif: The most interesting part is that you do not need an intermediary like a bank to participate in this process. It is all done via software and computers called miners. Anybody who has a high-powered computer can potentially be a miner on the bitcoin network. What miners do is essentially verify the transactions. They function as a bank would in the traditional payment system, and then they double-check each other’s work and record the transactions in a digital ledger that keeps all bitcoin transactions. So, anybody can be a miner, and of course, a lot of companies are now miners. It is a little harder for the individual people to compete with these companies that are doing mining right now.
Interviewer: What Is Bitcoin’s Appeal?
Olga Kharif: So initially, what attracted the techies and the libertarians to this idea was that BTC is not controlled by any specific government or any particular company, so it is off the people’s will. More recently, we have been in an environment of zero or negative yields. So some companies and money managers have been trying to find a way to essentially make higher returns, and Bitcoin has emerged as one way to do it. Of course, it is very risky, but it is definitely one way to do it. Last year a company called the Microstrategy invested part of its corporate treasury into Bitcoin. Other companies and money managers are following suit.
“Bitcoin is the scarcest asset,” MicroStrategy CEO Saylor says. “Cash-Rich software mints no-lose Bitcoin Trade.”
Interviewer: What Do Critics Say?
Olga Kharif: Of course, the critics have a lot to say about Bitcoin as well. I would say that the biggest issue with the BTC is that it’s a very liquid market. So less than 2% of the addresses which you can think of as wallets. Less than 2% of addresses control 95% of the bitcoin supplies. So basically, it is a game in which there are just a few very large players. When they or buy, it really affects the coins’ price. There are also other things that people worry about. One of those is the environmental impact of all this bitcoin mining. To power these machines, you need a lot of power. Miners that verify bitcoin transactions are moving all around the world in search of cheap electricity. Another issue that people worry about is illegal transactions. You know some criminals have used bitcoin for money laundering in the past and of course and one big one for the individual investors is the coins’ very high volatility. So it is definitely not for the faint of heart.
Interviewer: Is Bitcoin “Digital Gold” Or Another Bubble?
Olga Kharif: I think that the question is wide open right now because the last time when bitcoin had a big rally was in 2017, which followed in 2018 by an 80% drop. So, it is a highly volatile asset. Of course, as more large money managers as more corporations enter it, it is maybe becoming a little bit more stable, but that is very questionable. I think we need to wait and see whether this is really digital gold or something that can hold value or of its another bubble.
The interview on Bitcoin for beginners reveals Bitcoin to be a multi-faceted cryptocurrency, and people have varied opinions about it. It is highly volatile, and thus the crypto market sees a frequent soar and nose dip, on other terms, bullish and bearish as per the cryptology. Bitcoin is loved as much as critics criticize it all over the world. Bitcoin offers several benefits that draw the techies and big companies towards it. These companies buy, sell and as well as indulge in rigorous bitcoin mining. However, whether the crypto coin is a digital gold or just a bubble is yet to be experienced.