Bitcoin is the best known cryptocurrency and possibly the most important of the moment. In this article we are going to focus on the misgivings it causes and the doubts it raises, so we are going to review some of the most common questions regarding Bitcoin.
Do people actually use it?
Yes. There is a growing number of businesses and individuals using Bitcoin. This includes traditional businesses like restaurants, homes, law firms, and popular internet services like Namecheap, WordPress, Reddit, and Flattr. Although Bitcoin is still a relatively new phenomenon, it is growing fast. At the end of August 2013, the value of all bitcoins in circulation exceeded $1.5 trillion, and the equivalent of millions of dollars worth of bitcoins were exchanged every day.
How difficult is it to make a payment with Bitcoin?
Bitcoin payments are easier to make than credit or debit card purchases and can be received without the need for a merchant account. Payments are made from the wallet application, both with your computer or smartphone, by entering the recipient’s address, the amount to be paid and pressing send. To make entering the address easier, many wallets can obtain it by scanning a QR code or by bringing two NFC-enabled phones together.
Is Bitcoin safe?
Bitcoin technology – the protocol and the cryptography – has a strong security record and the Bitcoin network is probably the largest distributed computing project in the world. The most common vulnerability is user error. Bitcoin wallet files that store the necessary private keys can be accidentally deleted, lost or stolen. This is very similar to physical money stored digitally. Fortunately, users can employ prudent security practices to protect their money or use service providers that offer good levels of security and guarantee against theft or loss.
Is Bitcoin a bubble about to burst?
A rapid rise in price does not constitute a bubble. An overvaluation that will lead to a sudden downward correction constitutes a bubble. Decisions based on the individual human action of hundreds of thousands of market participants is the cause of the bitcoin price fluctuating as the market finds the price formation. Reasons for sentiment changes may include loss of confidence in Bitcoin, a wide spread between value and price not based on the fundamentals of the Bitcoin economy, increased press coverage stimulating speculative demand, fear of uncertainty, and old absurd euphoria and greed.
