SHOULD I INVEST ON BITCOINS?

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Let us picture a coin that is worth hundreds of dollars not made of gold or or any precious metal in fact it is not a kind of coin that can be held, it is a digital currency we are talking about bitcoin which does not work like most money since it is not attached to a state government so it does not have an issuing central authority or regulatory body hence there is no organization that decides when to make bitcoins, figuring how to many to produce or keeping a track of where they are, all these is made possible by the invention named cryptography

  Bitcoin is a fully digital currency and you can exchange bitcoin between computers in peer to peer network, the whole point of peer to peer network is used in sharing files and documents which raises the question of transparency in the system in that if it operates using the world wide peer to peer connections some might think that it may be easy to make a fake transaction, a bitcoin is not a string of file that can be duplicated easily, hence a bitcoin is an entry on global ledger called a blockchain which records every bit of transaction that occurs, as of late in the year 2016the ledger was about 176 GBs full of data so when you send someone a bitcoin is not like sending a file or folder but you are writing on the big ledger that you have sent someone some specific amount of bitcoins, even though this blockchain is centrally recorded, there are no official group of people that keep track of every bodies money like a bank does, it is decentralized hence anybody can volunteer to update the blockchain of any new transaction and quite some number of people do that, so as to keep the transactions accurate, picture some people playing poker then you all agree to write down the money each of you own to the other on an individual paper then compare them at the end of the game, if one tries to cheat by writing exaggerated amounts will be corrected and even penalized, these papers can be referred   as a block of transactions hence a ledger of these pages can be combined to form the blockchain

All the ledgers in a blockchain are kept in sync hence think of the whole network as a big table with millions of people some just exchanging money while others keep ledgers so when one wants to send or receive money he or she has to announce it at the table so that the rest may update there ledgers too, so for every transactions you are announcing your account number, the account number of the person whom you are sending the bitcoin to and how many bitcoins you want to send to he whole blockchain network and all the users who are keeping copies of the blockchain ledger will add   your transaction to the current block

Having a number of people keeping track of transaction might look as a good security measure but if all it takes is account numbers to make a transaction this will pose some security problems since it is ahuge problem with regular money since fraudsters might just steal your credit or debit card numbers and steal your money but with bitcoin there is no central bank that can monitor and detect any kind of fraud so what prevents one person from pretending to be you and sends all of your money to there accounts, the good news is that bitcoins are kept petty safe thanks to the cryptography technology hence earning its name, cryptocurrency, bitcoins stay secure because of keys, which are basically chunks of information that can be used to make mathematical guarantees about message that guarantees legit transactions

When you create an account on bitcoin network you will automatically create an electronic wallet which is linked to  two unique keys  called the private and the public keys, the private key simply takes some transaction data and mark it or sign it so that other people can verify your signature if they want so if you want to send a message to the network that you have sent some bitcoins to someone then sign that message using the private key only you have access to it and cannot be replicated and send it to the network  and every miner can use your public key to verify the signature hence everyone keeping track of the bitcoin trading knows how to add your transaction  to their copies of the blockchain network and making it legit unlike a hand written signature this proof of identity is not something that can be faked or forged by fraudsters

The time of transaction is also taken into account, for example if you have some fixed amount of money in your account and want to buy two products the value of the exact money, the bank will honor the first purchase and reject the second one unless people would be able to spend the same amount of money on multiple products multiple times,