What if you could make online transactions much more secure, peer to peer removing any mediator like banks and hence 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 had 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 r 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 the 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 the online transactions making sure that no transaction 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 controlled by the systems, which puppet it is easing or complicating the mathematical equations. Have you ever suffered the 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 and thus makes tracking the particular transaction and attaching it to you becomes extremely difficult as your personal identity is not used. Rather, a public address is given. That does not mean that your transaction 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 the credit card agencies or the bank transfers take for transferring money in 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 charge, the faster it is processed and vice versa.
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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 currencies, bitcoins are totally free of taxes. Some luxury items that are niche to a particular market are heavily taxed. Here comes one of the greatest advantages of Bitcoin, which is also termed as 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 minimum. The blockchain makes it extremely difficult to falsify any transaction.
But this digital currency is not free of faults; some of the basic advantages have to lead to major side effects and faults in the currency. The bitcoins are used as a currency in illegal trades and black markets. Also, some of the 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 towards 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 currency 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 maturer and stable currency that would be utilized all over the world because of its cost-effectiveness and simplicity.
Bitcoin Miner Hosting has contributed this article for general public interest and awareness. Contact them for Bitcoin mining hardware and hosting solutions.