Bitcoin: The Pioneer in the Virtual Currency
Meaning of Virtual Currency: Virtual Currency, also known as Crypto-Currency, is a digital representation of value that could be electronically traded and acts as a medium of exchange or unit of value. Virtual Currency lacks the legal tender status and thus differs from traditional legal currency on this ground. Unlike traditional currency, virtual currency is not promised and backed by the government or the banking system. Virtual currency can be obtained, stored, transected electronically, and can be used as a mode of payment and could serve many other purposes, as long as parties in the transaction want to use it. Amongst many other virtual currencies, Bitcoin has the status of being the first and original virtual currency, which makes it a very prominent currency. In 2009, bitcoin brought a revolution in the existing monetary system.
Operation of Bitcoin: Like all other virtual currencies, bitcoin is supported by a system, known as the blockchain, which ensures proper accounting of transactions and balances. Blockchain maintains the digital ledger of transactions and shares those among the distributed network of computers. With the use of cryptography, it permits each participant to influence the ledger in a secured way. The absence of the central regulatory authority makes it independent and thus no bank or government influences and controls the virtual currency. Cryptography ensures the secrecy of data and prohibits the leakage during the transmission and only intended participants could decode the data and message. In the recorded data, manipulation or amendments is very tough, thus making the system robust.
Features of Bitcoin:
1. Decentralization: Virtual Currency is not governed by any central authority. Every computer that involves in the transaction becomes the part of the network and records a copy of the transaction. Thus, all transactions and balance records get stored on thousands of computes. The absence of a central regulatory body suggests that the owner of Crypto-currency has the sole power on the currency and could not be diluted by a government with the change in the monetary policy.
2. Anonymity: Records of virtual currencies are public and as owners are known only by virtual currency addresses, their real-world identity is not traceable. This feature makes the virtual currency more transparent and parallelly anonymous.
3. Transparency: All transactions and balances stored at virtual currency addresses are public and could be viewed by anyone interested. The blockchain system controls the recording of ledgers.
Virtual Currency has a vast promising future as it is open to all and is widely accepted by the business society for transactions. MLM and network marketing portals, like MLM Diary, provide a gateway to the information about Bitcoin and similar virtual currencies which supports better analysis which turns into a safe investment.