What if you could make online transactions much more secure, peer-to-peer, removing any mediators like banks and completing them more cheaply? That is what bitcoin helps you to do. In simple words, it is an online ledger of transactions of an online soft currency that is done between the users. Satoshi Nakamoto published this invention, and it has evolved and acquired a lot of attention. Some believe that a digital currency like this can replace US Dollars and mark a new era for online payments. It might surprise you that no government or bank controls it, and a special computer code decides and regulates the flow of such currency in the market. The bitcoins are mined by miners who have to break mathematical equations to get bitcoins; the equations become harder to crack when the supply has to be controlled and vice versa.
The price of Bitcoin is decided on a simple basis of the demand and supply of Bitcoin. If you have not used Bitcoin till now, you might be thinking, where is it generally used? We have seen its major usage in buying games and subscribing to applications. It has been a successful payment method regulated by the miners, and tens and thousands of them have the ledgers of online transactions, ensuring that no trade is falsified. But what could be the advantages of Bitcoins, apart from the obvious, which are already stated above?
Minimal Outside Intervention: Outside intervention, in this case, means unnecessary regulations and rules. As already stated, Bitcoin is not controlled by any Bank or particular government. The flow of this digital currency is governed by the systems, easing or complicating the mathematical equations. Have you ever suffered frustration when your bank freezes your account without any sane reason? Well, with bitcoin, no such thing can be done. As the system involves the basic parties, it gives greater independence and liberty to both parties in the transaction.
Discrete Transactions: The only currency you can transact anonymously, tracking the particular transaction and attaching it to you is extremely difficult as your identity is not used. Rather, a public address is given. That does not mean your marketing is invisible; on the contrary, it can be easily seen through blockchain and recorded in a worldwide ledger.
Extremely Low Fees: The hefty payments that credit card agencies or bank transfers take for transferring money into accounts can be tackled with this digital currency. As the transaction is peer-to-peer, the transaction charges are further reduced. Also, the more the transaction charges, the faster it is processed,.
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Tax avoidance: In all government-controlled currencies, you generally have to pay taxes on exchange and additional taxes on every purchase. But unlike these conventional forms of cash, bitcoins are tax-free. Some luxury items that are niche to a particular market are heavily taxed. Here comes one of the greatest advantages of Bitcoin, also called legal tax evasion, assuring no or lesser tax on a transaction.
Safety for sellers: The reversal of these Bitcoin transactions is not possible. Hence, the chances of fraud by the buyer are minimal. The blockchain makes it extremely difficult to falsify any transaction.
But this digital currency is not free of faults; some basic advantages have led to major side effects and defects in the money. The bitcoins are used as a currency in illegal trades and black markets. Also, some online black marketplaces were run on transactions mainly based on bitcoins. The Silk Road marketplace, where drugs were dealt and hitmen were hired, was based on this digital currency only as the transaction was untraceable to any person’s private identity.
The price of bitcoins is highly volatile. It jumps to and fro in each second. All of which is dependent on the fluctuating demand of such currency in the world. But with time, as more and more people are accepting it, the money is stabilizing. The stability is directly related to the awareness and the trust of people in this digital currency. Some companies have started accepting Bitcoin as payment, which has increased awareness and built curiosity in people’s minds for the digital currency. In the future, it is expected that bitcoin can emerge as a mature and stable currency that would be utilized worldwide because of its cost-effectiveness and simplicity.
Bitcoin Miner Hosting has contributed to this article for general public interest and awareness. Contact them for Bitcoin mining hardware and hosting solutions.
