If you look all over the world, why does anyone give you money? Anyone give you money only when you add some value or do some work in return for it. Even in the office, you get the salary only when you do some work for the company or add any value to that company. A shopkeeper also gets money only when someone purchases good in return. If you look all over the world, you will get money only when you add some value or do some work in return for it. In a way, money = value.
From time to time money has been represented by different things. Earlier people used to get work done by giving wheat and grains. Then gradually people showed more interest in all those things which lasts longer and their value is high, like gold but it was not easy to carry gold as well. Then the government provided an option in which you don't have to carry gold. You can deposit your gold to the government and in return, you will get a receipt. And based on that receipt, you can make transactions, and then later the same receipt will be converted into paper money.
Then as time went by, people trusted a government promise to represent money. "I promise to pay this amount to the holder". Through this promise, the government told that if you go somewhere with note then you will get its value. Then gradually paper money started converting into digital money.
But even in digital money, the biggest challenge was keeping track of transactions. If money is deducted from your account, then it should be transferred to another's account. And it should not happen that money goes into another's account.
To keep track of all this, a centralized banking system was established. But this centralized banking system also has challenges. The money you save in the banks, that money is invested by the bank and if there is any loss in that investment they your money will be at risk. In 2008, when Lehman Brothers were at the loss, which is a financial institution, there was a recession at the global level. So, in a way, you are giving control of your money to someone else, there is a problem of transparency in this.
In October 2008, a document was published by the name Satoshi Nakamoto. This document suggested how our current banking system can be replaced through bitcoin currency.
So what does it mean? It means that our bank is maintaining records of all the transactions by a centralized system and making sure that the transaction is successful. It's alternate can also be seen through Bitcoin currency although many cryptocurrencies have come into the market but here we will take the example of Bitcoin when you buy a product from PayTM or made a transaction you get some reward points generally those reward points are used inside PayTM only, but if those points are can be used outside then everyone start accepting at then the value of these points will increase the same thing happens in the case of Bitcoin Bitcoin is a cryptocurrency in the future at what level its existence will be depends on how its acceptance is bitcoin is a digital cryptocurrency it has no physical value when you buy a bitcoin it means you buy a specific Bitcoin address through which you do the transaction on another specific Bitcoin address Bitcoin is an automatic structure that does not require programming or coding its algorithm runs on autorun but to run the algorithm system and computer are required and thousands of computers are required at at such a use level and to maintain these thousands of computers third party is required but is the third party gets in for the whole thing will turn around and it will come back to the same banking structure all control will go to the third party to avoid this the concept of Bitcoin mining came in which people Run algorithms by their computers and when the transaction is successful you get Bitcoins as a reward as this whole system is in the form of distributed and blockchain so the problem of power to anyone Institute or entity or getting hacked by someone else is solve here if Bitcoin miners continue if Bitcoin miners continue to generate Bitcoins like this then the whole thing will turn around and come back to what I explained in the the above example inflation rate will increase so to avoid this it is already confirm that not more than 21 million Bitcoins will be generated as Bitcoin Miner now many Bitcoins will get as a reward depends on how many people are mining Bitcoins with computers in 2009 you could generate 200 Bitcoins in 2 to 3 days but in today if you want to generate 1 Bitcoin will take you more than 150 years
What is the disadvantage of Bitcoin? The first thing is it is not accepted everywhere, second there is no involvement of government in this so a lot of illegal activities that can take place and end at the third thing is it's very volatile nature its value changes every 30 seconds suppose you have bought a product and you have to return it so its price would have changed in that time now the shopkeeper will face the problem that is how much money he has to give in return because there is no mechanism for this thing because it is an open source.