Bitcoins and the Advantages of Cryptocurrency
Bitcoin is a kind of digital currency made and stored electronically. In contrast to dollars or euros, they are not under any party’s control. They aren’t printed on paper, but instead produced by individuals and businesses using a computer program that tackles mathematical problems.
Bitcoins and Cryptocurrencies
Bitcoins are the first of an expanding classification of money called cryptocurrency. Gold or silver is the basis ofconventional currency. Theoretically, you know that by handing over a dollar at the bank, you will get some gold in exchange (although this isn’t actually happening). Bitcoins, however, aren’t based on gold but on mathematics. Everywhere in the world, people are using software solutions that work around a mathematical formula as a way to produce bitcoins. This mathematical formula available to everyone, which means anyone can actually check it. The software itself is open source, indicating that everyone can do their part in ensuring that it does what it should.
Advantages over Traditional Currencies
Bitcoins can be used for making purchases electronically. In that sense, it’s the same as traditional currencies, which are also traded this way. However, there are many advantages of bitcoins, including:
The bitcoin network is not under any central authority. Each bitcoin-mining machine that processes transactions is part of the network, and all machines work together. Hence, theoretically speaking, no central authority will be able to change or interfere with monetary policy and start a meltdown – or simply decide to seize bitcoins from their owners. And even with a part of the network being offline for whatever reason, the money will remain where it is.
Traditional banks can have so many and sometimes unnecessary requirements before you can open a basic account with them. Setting up a merchant account is just another task complicated by bureaucracy. In contrast, it only takes seconds to set up your bitcoin address, no fees or questions at that.
Bitcoin accounts are anonymous – kind of. You can have a lot of bitcoin addresses, and not one will be linked to your name, address or any other piece of information that could be traced to you. The bitcoin network, however, stores all details of each and every transaction you make in a massive digital ledger referred to as the blockchain. The blockchain reveals everything. If your set your bitcoin address to public, anyone can see how many bitcoins there are at that address. But they’ll have no inkling that it’s yours. There are many steps you can take to protect their anonymity on the bitcoin network, like using different bitcoin addresses for different transactions and not moving a lot of bitcoins to a one address.
Small International Transfer Costs
Compared to the huge transaction fees banks collect for international transfers, bitcoin fees are minuscule.
Speed and Non-Repudiability
Using bitcoins, you will be able to send money anywhere in a matter of minutes. Finally, it’s non-repudiable. The moment your bitcoins are sent, there’s no recovering them, unless the recipient sends them back to you.
Citation: click to find out more