Every once in a while a new technology emerges and takes the world by storm. It creates debates and discussions and baffles everyone. One such technology that was introduced in 2008 was Bitcoin.
Virtual currency is not a fad anymore. It is here to stay for long, or perhaps, forever. Sure, it created a lot of confusion and interest when it arrived on the scene a few years ago, but now it is one of the most legitimate ways of transactions.
The interest in Bitcoin, however, is now at the heights. Its value has gone higher than $6,000 (As on 30 November 2018). Is Bitcoin the future of currency? Or is it even currency? What is it used for? Should you opt for it? Or should you disregard it? Let’s take a look at it in detail.
Bitcoin is digital cash. It is a digital currency used for online payment in which credible encryption techniques are used to modulate the currency units and verify the transfer.
You can use Bitcoins to buy things electronically. It works like regular currency while trading, but the format is different. One of the most important characteristics of Bitcoins is that they are decentralized. Meaning, no one controls it, no single institution or a large bank. They are not printed like rupees or dollars. They are produced by people and businesses. Most find comfort in this, as banks can’t control their money.
Furthermore, Bitcoins are created digitally, and anyone can be a part of it. They are ‘mined’ (more on this later) using the power of computing through a distributed network. This network also undertakes transactions made through the virtual currency, thereby making Bitcoin its network of payment.
Advantages of Bitcoins
Some of the essential characteristics of Bitcoins that set them apart from government-backed currencies are as follows.
A single central authority does not control Bitcoin. Machines that mine Bitcoin and undertake transactions make up a significant part of the network, and all devices work together. Meaning, a single authority can’t meddle in the monetary policy or make their rules for people.
- Easy Set Up
Traditional banks work you in a way that you are compelled to tire yourself just to open your bank account. Bitcoins, however, are easy to set up. You can set up Bitcoin addresses in seconds and with no fees whatsoever.
You can hold multiple Bitcoin addresses, and they are not linked to names, addresses, or other information that can identify you personally.
Bitcoins give you anonymity. However, they store details of every transaction that you make through a substantial general ledger called Blockchain. Say, you have a publicly-used Bitcoin address. Anyone can figure out how many Bitcoins are stored in that address. But they just can’t know that it’s yours.
- Transaction Fees are Minimum
Your banks can charge you a hefty sum to make international transfers. Bitcoin does not do that.
- Bitcoin Network is Fast
You can send money wherever you want, and it will reach in minutes. The Bitcoin network processes the transactions quickly and efficiently, especially cross-border transactions.
Also, once you send the bitcoins to a receiver, there’s no way of getting them back. They are gone forever unless your recipient returns them.
Cate: Bitcoin , Blockchain
Tags: Bitcoin, Cryptocurrency, Digital Currency