Bitcoin has contributed to changing the financial system of the world. Bitcoin is a digital currency that has been swallowing the world in it at a fast speed. There is no doubt to say that bitcoin is a virtual form of currency that brings a deep change of spending in modern history. In this article, we will discuss the basics of bitcoin because it is better to start from the basics of bitcoin to gain complete knowledge about it.
Satoshi Nakamoto was a Japanese person who created and then presented the bitcoin protocol to the world in 2008. If we talk about the basic definition of bitcoin, it is a cryptocurrency that was created to control and provide a handy role for the financial system. There are lots of voices arisen about the scarcity and security of the bitcoin, but now it is becoming a belief of the majority that bitcoin is a cryptocurrency that is facilitating its users to for exchanging it with another user from any part of the world without the involvement of third parties such as central banks or single administrator or any other payment process.
Bitcoin is an alternative to traditional currencies such as the dollar, GBP, euros, etc. The main reason behind the difference between bitcoin and traditional currencies is that the working of bitcoin doesn’t involve any third party such as government terms and conditions, company, or any central bank that has authority to control bitcoin. These all circumstances declared bitcoin as preferable to the traditional currencies. It makes bitcoin a popular currency for the majority of people in the world that are suffering from the traditional financial system.
Also Read: What is a Cryptocurrency?
This new virtual currency prevents most groups of people such as activists, criminals, or else that is living in the states with high inflation. The nature of bitcoin is anonymous as it does not address any personal information about its users so there is less chance of any criminal act. One of the major use of bitcoin is that it can be transferred from one country to another quite easily. This means that if anyone wants to transfer money from one state to another state then he can use bitcoin for this purpose. Because if he uses the traditional method of sending then he have to pass lots of terms and conditions in it, and these conditions are not applicable in the bitcoin system. Bitcoin Era can help you for getting for information.
One of the major benefits of bitcoin is that the transaction fee of bitcoin is very affordable as compared to the traditional payment methods that involve Visa, MasterCard, or UnionPay. If anyone prefers the traditional method for transactions then he has to pay a separate transaction fee of 5% for each transaction. But if we talk about bitcoin transactions, then it only takes a 0.1% transaction fee on each transaction. Now you can estimate the difference between 0.1% and 5% of the transaction fee. That’s why bitcoin is attracting the majority of the merchants from all over the world that have to send or gain money on daily basis across the borders. Another benefit that bitcoin users enjoy is that they are no chargebacks with any transaction, so those merchants who are using bitcoin for their transactions do have not to worry about fraudulent purchases.
Now bitcoin is becoming the most popular currency in the world. Bitcoin is now accepted by much well-known online retail, and companies such as Microsoft, Dell, etc. Bitcoin is also gaining popularity in the black market because of its anonymous nature where their transactions are not being monitored. There is another benefit of bitcoin, it can be used for laundering money from the given specific addresses and then the funds are converted back into cash and then deposited into bank accounts. You can convert bitcoin into other conventional currencies with the help of many bitcoin exchanges.
One of the major problems in bitcoin is its volatility. It is considered as one of the major problems faced by bitcoin users and it is also considered as a hurdle for bitcoin to become mainstream. That’s why bitcoin is only used as a speculative commodity, but sooner or later Bitcoin will become a major financial system when it will overcome its volatility issues.
As of now, it is becoming the belief of the majority of the people that bitcoin is their financial savior. You can do instant payments to anyone in the world with bitcoin. The only issue it is facing is its volatility issue, but overall it is way better than traditional currencies where users have to pay a 5% transaction fee on each transaction.