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Wednesday, April 17, 2024

What is Bitcoin? Facts you must Know

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The bitcoin is considered a crypto-active. But what is it really and what does it mean for real currencies?

It is essentially a digital instrument, which can be exchanged electronically, which does not physically exist. The bitcoins are created and monitored by a computer network using complex mathematical formulas, not by an authority or a single organization

.No warranty

The bitcoins are issued by a central public authority. They cannot therefore inspire the same level of confidence as an official currency like the euro, which is guaranteed by the central banks of the euro zone. 

It is not a means of payment accepted everywhere

If bitcoin was a currency, you should be able to use it widely. But, in reality, there are very few places where you can pay with bitcoin . And, in these rare places, transactions are slow and expensive.

No user protection

The bitcoins are not safe from hacking. And you don’t get any legal protection if they are stolen.

Too high volatility

A currency is a stable store of value. You can be sure that the money you have today will allow you to buy roughly the same number of goods tomorrow or a year from now. The bitcoin , however, is not stable. Its value has sometimes skyrocketed, sometimes plunged in the space of a few days.

How to earn bitcoins for free? 

Many of the websites offer a variety of ways for earning bitcoins. You can visit smilesbitcoin to find how to earn free bitcoin instantly

What is bitcoin if it is not a currency?

It is a speculative asset. It is an instrument on which you can bet and make a profit, running the risk of losing your investment.

Are stablecoins similar to bitcoins  ?

The stablecoins are intended to be a form of crypto-active more stable than bitcoins. Their issuers tie them to a trusted asset, such as corporate bonds or gold. The value of a stablecoin, however, is only a simple promise made by a private company, which no public institution regulates, unlike official currencies.

Who monitors crypto-assets?

It is impossible to verify that international stablecoin issuers are actually delivering on their promise to keep “stable value”, and that they are not issuing more stablecoins than they can repay. Faced with this issue, the European Commission has proposed new legislation to protect users of stablecoins in the European Union.

Does the ECB intend to ban bitcoin  ?

Since bitcoin and other cryptocurrencies are not legal tender, it is not up to the ECB to ban or regulate them. Caution is needed, however, since they do not include any consumer protection.


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