The nature of virtual currencies is unique as compared to fiat currencies. Bitcoin is the best virtual currency with many advantages being a medium of exchange and a store of value. Although bitcoin has been into it for more than a decade, it is constantly changing, making payments and investments. Along with knowing the benefits of bitcoin, an individual must also understand the risks involved while using Bitcoin. For more information you can visit and like the new Chinese Cryptocurrency
What is Bitcoin?
Bitcoin is a decentralized digital currency that follows the peer-to-peer system of making payments. It is specially designed to provide the benefit to its use of making payments electronically over the internet. It is a computer code that was created by Satoshi Nakamoto, a mysterious entity, in 2009. He developed bitcoin to provide users a new and innovative method of making payments and to provide an alternative to fiat currencies. Some people often say that there wasn’t any need for bitcoin because there are already many traditional means present to make payments.
The main element that distinguishes bitcoin and other payment methods are the decentralized nature. Bitcoin is a decentralized currency that eliminates the need for intermediaries. No central authorities govern, control, or regulate bitcoin, and no one can manipulate the demand and supply of it. Bitcoin works on blockchain technology that is a distributed public ledger that records all bitcoin transactions.
After gaining knowledge on the basics of bitcoin, let us learn how bitcoin is benefitting its users.
Advantages of Bitcoin
Bitcoin is a peer-to-peer exchange currency that allows two parties to contract or deal without involving third parties. Users can send and receive bitcoin payments without requiring permission or approval from any central authority.
Purchases made with Bitcoin are tactful. No purchases are related to a person’s personal identity, and the transaction cannot be tracked. Bitcoin provides the facility of transparency and user anonymity, and therefore no personal details of users are linked to transactions.
Elimination of extra transaction fees
Crypto exchanges charge maker and taker fees from investors who buy and sell their cryptocurrencies, and also, there is the fee charged by exchanges for depositing and withdrawing money. But the good thing about bitcoin is that it doesn’t involve an extra and high transaction fee that is often charged when using fiat currencies. There are many different fees that banks charge that include overdraft charges, account maintenance fees, minimum balance fees, returned deposit fees, and more. These all are eliminated while transacting with bitcoin.
Like traditional payments systems that are done electronically, Bitcoin users can also make payments only by having an internet connection. Users only require access to mobile devices or computers and an internet connection to transfer funds to another party. They aren’t even required to go to stores or banks to buy or transfer bitcoins. Unlike other online payment methods, users don’t have to provide their details like name, address, or bank account number to make bitcoin transactions.
The business has to make foreign purchases, and this involves high exchange costs and other fees. Bitcoin is the best solution for international; trade because it doesn’t involve any intermediary like the government or banks, and the transaction fees are quite low. Travelers and business people can make the best use of bitcoin by expanding their business without even requiring paying an additional or extra transaction fee.
Bitcoin holders get the best benefit of transferring funds from anywhere and to anyone. Users can easily make payments using mobile devices or computers. Bitcoin is available worldwide, and therefore, you don’t need any third-party’s permission to access and transfer bitcoins. You can make bitcoin payments without even having access to debit/credit cards and more.
Challenges in Bitcoin payments
Involvement of central authorities
We know that bitcoin is a decentralized currency, and there is no government or bank involvement. But government can still involve in Bitcoin and can ban on usage of bitcoin. This is a big challenge that bitcoin users are facing.
The main challenge that users face while accepting and investing in bitcoin is its volatile nature.