Pros and Cons of Bitcoin

Bitcoin, the world’s first cryptocurrency, and the most popular one, introduced the concept of cryptocurrency and blockchain to the world. Cryptocurrencies are digital currencies whose transactions are recorded and maintained on a publicly shared ledger. Cryptocurrencies work on the blockchain technology which powers this publicly shared ledger and provides security to the entire network.

In a blockchain network, the ledger is shared between a group of peers who are connected on the same network. All the transactions that are recorded on this ledger are verified by “miners” who solve cryptographic puzzles in order to validate these transactions. Miners are paid in a small fraction of Bitcoin for every transaction that is validated. Thus, in the world of cryptocurrencies, there is no need for a centralized authority like a bank for carrying out transactions.

The main reason for the popularity of Bitcoin (and cryptocurrencies in general) is independence and anonymity. While the use of cryptocurrencies for transactions is far more streamlined than regular FIAT currency, it does have issues with the speed and costs involved in such transactions. Mentioned below are some of the pros and cons of using Bitcoin:

Pros of Bitcoin

Bitcoin transactions can be carried out at any point of time and to any location in the whole world. Cryptocurrencies are not restricted by typical protocols and regulations that cause hindrance in international FIAT transactions. Bypassing traditional banks results in faster and cheaper payments with Bitcoin.

Just like digital transactions with FIAT currency, cryptocurrencies like Bitcoin can be used from computers, smartphones, and debit cards. Bitcoin also has a lot of technical features that make it valuable to businesses such as multi-signature authorization, two-step verification, and complete transparency during accounting. Added to this, the very nature of blockchain technology provides complete data security and makes these ledgers tamper-proof.

Cons of Bitcoin

While there have been several attempts to enable offline payments using Bitcoin, cryptocurrency transactions are still heavily dependent on an internet connection. While Bitcoin is extremely fast and streamlined for international payments, it still has a long way to go to prove itself for retail purchases. It is still very difficult to buy physical goods and products like groceries with Bitcoin. Added to this, conversion of Bitcoin to FIAT currency is currently an expensive process. The transaction rates for Bitcoin are still not stable ad the market is heavily unregulated leading to many kinds of unethical practices.

What is Waltonchain

The Waltonchain derives its name from Charlie Walton who was the inventor of the RFID technology. The Waltonchain is a combination of RFID and blockchain which helps to manage and coordinate large amounts of data between business groups. RFID stands for Radio Frequency Identification, and it comes in the form of a transmitter chip and a receiving device. WALTON is an acronym for Wisdom Alters Label, Trade, Organization, and Network.

The Waltonchain project was launched in 2017 and was under construction since 2015. The founder of Waltonchain is Xu Fangcheng, and the main purpose of the Waltonchain is to store data in the blockchain network. This will ensure security and accuracy of data regardless of its location on the network. Added to this, due to the nature of the blockchain technology, the data is immune to tampering from any kind of third-party.

Waltonchain is the only parent chain in the Walton framework. Developers have the freedom to fork the chain and establish their own token; they can even develop algorithms different from the consensus chain. Such forking initiatives help in stopping congestion in the parent chain and allows for the creation of customizable sub chains for various purposes. Doing so, however, in no way affects the price of the coin since the WTC platform is used to create those sub-chains and new tokens.

The concept introduced by the Waltonchain ecosystem is VIoT or Value Internet of Things. Typical RFID chips work on electronic, magnetic frequency for transmitting data. These do not require any kind of battery for operation and are most popularly used for tracking of assets and inventory management. Anyone with an appropriate scanner can scan an RFID chip or tag and get the relevant information. Waltonchain has developed their own version of the RFID technology which has some notable differences. Some of the major features of the Waltonchain RFID are mentioned below:

• An encryption and decryption package has been installed on the chips for added security.
• Extra data storage space has been added to the chip in order to store the hash value and key data. This makes such RFID chips tamper-proof.
• The chips developed by Waltonchain by design are low voltage and low power consumption models and can be used on a much larger scale.
• Anti-collision measures have been incorporated into the chip in order to reduce collision probability and manage the probability of record skipping.

One doesn’t need to be an expert programmer in order to create their own cryptocurrency. Today, there is a wide range of blockchain platforms available that allow people to create their own cryptocurrencies. Users today can create community coins, tokens, and even joke coins. With the help of these blockchain platforms, creating your own cryptocurrency is as easy as filling up a simple form.

While making your own cryptocurrency is a simple task, there are certain options and pitfalls that one should be aware. The most fundamental thing, in the beginning, is to understand the difference between coins and tokens. Coins like Bitcoin and Litecoin are cryptocurrencies with their own individual blockchain networks. Tokens, on the other hand, are coins that utilize pre-existing blockchain networks such as Ethereum.

A blockchain is nothing but a publicly maintained ledger that is shared across a network. Coins, thus have their own ledgers, whereas tokens use the ledgers provided by other platforms in order to validate transactions. Another major difference between the two is coins are usually used to manage and transfer wealth, whereas tokens represent a contract for any kind of physical object or arrangement. Tokens are often released in ICOs or initial coin offerings where they are exchanged for pre-existing cryptocurrencies. This is usually done as a fundraising initiative in order to develop the crypto-platform further. While anyone can create a token and initiate their ICO, it has become risky in recent times as coin creators often take the investors’ money and run with it. There are several cryptocurrency creation platforms that allow users to create their own custom coins such as CryptoLife. Such platforms offer pre-made templates where users only need to enter the name of the coin and logo, and the coin is prepared on behalf of the user.

There are two more ways to create your own, unique cryptocurrencies- one is to establish a fresh blockchain from scratch or fork from an existing cryptocurrency. Establishing a new blockchain requires serious coding skills and knowledge as the blockchain has been made from scratch. While this method may be tedious, it offers greater freedom and control. The second method involves forking, which is taking the source code from an opensource platform like Github and making modifications to it to create a new blockchain. This also requires technical knowledge as one has to modify the existing code of the original blockchain.

 

The use of cryptocurrencies requires the use of special cryptocurrency wallets. Since cryptocurrencies are not physical cash but data recorded in a publicly maintained ledger, these wallets don’t contain anything. They contain the keys that are used to interact with the ledger during transactions and transfers. Bitcoin is the most popular cryptocurrency, and there are various kinds of wallets available for this coin.

The first step in choosing a Bitcoin wallet is deciding whether the user needs an online wallet, offline wallet or both. Online wallets are perfect for regular use but do not come with any added security. Offline wallets, on the other hand, might be cumbersome to use but are far more secure than traditional online wallets.

• Online Wallets- Online wallets operate on web-based applications that can be operated from computers and smartphones. There are Bitcoin wallets available for Android and iOS. Online wallets are a great option only if the amount of money stored is relatively small that will not be a major issue upon loss. Online wallets also have friendly UIs that make them convenient for regular use. Added to this, a lot of online wallets are free, and the safety of the wallet is entrusted upon a third party. Online wallets are also convenient when they are required to be shared with someone.
• Offline Wallets- These are hardware devices that come in USB or other formats and are the preferred option when storing large amounts of cryptocurrency. Offline wallets are built with the sole aim of security. They are not designed for regular use and, therefore, may not be compatible with all devices. Such offline wallets are not free and are used by customers who wish to protect their assets on their own.

A lot of users often choose to have both kinds of wallets- an offline one for storage and an online one for transactions. While choosing a wallet, there are certain details the user needs to take into account. Firstly, the user needs to check if the wallet has multiple currency support or does it only support Bitcoin. If the wallet is online, then the user needs to check if the extension is HTTPS or HTTP. HTPPS is usually preferred as it offers better security. The authentication protocol and its strength need to be checked before selecting. Other things to note would be the availability of multi-signature features, ease of use, and back-up measures.

The mining of cryptocurrencies is again picking popularity after the crypto market is showing signs of bouncing back. While the market has mostly remained in a bullish state, miners have been seen turning their mining rigs back on during the month of December. While the prices of mining were low during the early days of cryptocurrency, mining one Bitcoin in one year today entails an investment of thousands of dollars.

Cryptocurrencies are traded on a publicly maintained ledger. Every transaction or transfer is recorded on this ledger which is maintained by a community of miners. Miners who validate the transactions by solving cryptographic puzzles are paid in the cryptocurrency they are working with. This process of validating transactions on the public ledger is called mining.

Bitcoin was first launched in 2009, and back then, it was easy to mine Bitcoins using personal computers. As an increasing number of miners joined the race, in search of the Bitcoin transaction fee, with time, it got more challenging to mine coins, and only those with powerful rigs were able to survive the mining competition. In order to understand the amount of investment required for mining, a lot of people rely on Bitcoin mining calculator. The amount of computing power required by a mining system is known as the hash rate. The hash rate shows just how quickly the equipment can solve cryptographic puzzles which authorize Bitcoin transactions. Subsequently, one has to decide the budget of one’s operations and based upon that, one can choose to invest in their own mining equipment for maximum profits or use existing mining technologies.

There are two ways of relying on existing mining infrastructures. Users can either choose to join a mining pool or rely on cloud mining. Mining pools are groups of miners who unite to combine their computing powers and share the profits among each other. Often, there is a fee involved in joining such mining pools. Cloud mining involves buying processing power from third-party data centers that mine the crypto for the customers. Miners do not need to invest in their own equipment and are charged a fee by the cloud service providers. This also causes a reduction in profit.

Maximizing the profits involve investing in one’s own mining rig. The stronger the rig, the faster it can solve those puzzles and mine Bitcoin. Rigs usually involve thousands of dollars of investment but offer the highest profits.

It is not possible to carry out transactions using cryptocurrency without operating a cryptocurrency wallet. While Bitcoin was the first cryptocurrency, today there is a booming cryptocurrency market with a wide variety of coins with their own features. Cryptocurrencies exist on blockchain networks which operate using a public and private key. These public and private keys are used to make transactions.

These wallets are not for storing cash

The job of a cryptocurrency wallet is to not store money but contain the private keys of the currency owner. Since cryptocurrency is not a physical currency, there is nothing to store here as such. All forms of cryptocurrency exchanges are nothing but data entered on a publicly shared ledger. When a person owns a particular amount of cryptocurrency, they basically have a certain value assigned to their wallet address on the ledger. The transactions on these ledgers are verified by miners who are rewarded for such tasks in certain denominations of the currency.

The relationship between ledger and wallets

Access to these ledgers requires the use of a set of public and private keys as mentioned above. The wallet is simply a piece of software that holds these keys for the user. The wallet also provides the software interface which cryptocurrency users can use to access the ledger and interact with the blockchain platform for transactions. Wallets allow their holders to monitor their current balance, check transaction records and manage their cryptocurrencies. Every wallet has a unique address associated with it. This address is the unique identifier of the wallet holder. When the wallet receives money, there an amount registered against the wallet address on the ledger. In order to utilize the money that has been received, the private key of the receiving party must match the public key of the cryptocurrency. Once the records of the public and private keys match, the money is successfully transferred.

There are different kinds of cryptocurrency wallets with a variety of features. Wallets are usually compatible across all digital platforms such as laptops, tabs, and smartphones. There are also separate cryptocurrency wallets which are hardwired into separate USB devices. Such hard wallets are very popular due to the enhanced data security measures that they provide. All the transactions recorded by such USB based wallets are stored permanently on offline records as well which are contained in these secured devices.

The Blockchain technology came into existence in the year 2008, and in recent times it has grown as one of the most critical applications of digital technology. Blockchain was invented by a man or a group of individuals working under the pseudonym Satoshi Nakamoto. Initially, blockchain technology found application in keeping the authenticity of cryptocurrency transaction by establishing immutable transaction ledgers. Today, the technology has grown into something much more significant with far-reaching applications.

The main concept behind blockchain is that it allows information to be distributed but not copied. This concept has given rise to a new concept of the internet altogether. Bitcoin has often been regarded as the digital equivalent of gold. The total value to Bitcoin today is close to $112 billion. Blockchains now have the potential to give rise to various kinds of digital assets and values. One doesn’t need to be aware of the intricacies of the technology to understand the revolutionary nature of blockchain. Any kind of information that exists on the blockchain is shared among all the parties connected to the network. The data that is shared is continuously updated through the mutual agreement of all the parties. The data is not stored at any particular location and are completely public and authentic. One of the most obvious benefits of this structure is that hackers cannot hack a single database and gain vital information. Even if they hack a single device on a blockchain network, they only get a portion of encrypted data. 

As one can understand, there is no central authority governing a blockchain network, and it has no single point of failure. Another advantage of the blockchain network is that more than one user can operate the data that is shared simultaneously. For example, in a traditional network if two people are working on a single document, then there are going to be a lot of emails back and forth, sending and receiving updated versions. However, if the data were to be present on a blockchain network, then both the parties can make changes simultaneously, and no change can be made permanent without mutual agreement. These make transparency one of the core features of this technology. No data can be changed as the entire network is interconnected. Altering data would require enormous amounts of computing power which would have to change the entire network altogether. Blockchain is thus fair and tamper-proof.