With the rise in digital online transactions, a new currency has been created that eliminates middlemen including the central banks. Bitcoin is a virtual currency that was first launched as open-source software and has since then has risen to be accepted in some avenues as valid to exchange for goods and services. While there was a bit of apprehension in using the Bitcoin at the beginning, perhaps due to the anonymity of the developer who launched, it has since then proven its credibility. The software was also openly published and can be reviewed and modified by other developers for their designated use.
The Bitcoin network is in the form of application or program that has been made for managing rewards earned by the users. The activity is referred to as mining. Basically, users create new Bitcoins and other individuals or companies exchange them as transaction fees. Bitcoins are also sent between users electronically or exchanged for products and services. The transactions are usually recorded in a public ledger. The transactions are safe as each has a personal signature. The technology is not controlled by anyone, per se and is completely decentralized. It is more of a user-controlled program.
The value of Bitcoins has risen considerably since the inception of the idea and the system continues to grow. Some individuals are involved in Bitcoin collection in anticipation of the tremendous value they will be worth in a couple of years. Acquiring the coins has become a popular activity and those who own them sell them for payment through electronic transactions. Businesses are also embracing the use of this cryptocurrency and favoring it over credit card payments.
Why Use Bitcoins?
Bitcoins, unlike any other form of currency, is not subjected to centralized banking which is subjected to a lot of regulations. It is also not owned by any country. This means that transactions across the globe are not only cheap but are done with incredible ease and speed. In buying of goods and services, they are favored especially by small business enterprises over credit cards due to the fees incurred by the latter. Even when a Bitcoin transaction has a fee, it is much smaller than one would have with PayPal or credit cards.
Bitcoins transactions allow the user to have anonymity. Since no banking institution is involved, one can buy without even giving their actual name. This enhances the user’s security. Fear of exposing personal information that predisposes one to financial vulnerability is eliminated. The full control of the operation of a Bitcoin Wallet is the users and therefore, no unwanted charges can be forced upon them. It is also secure for the businesses using them. All Bitcoin transactions are irreversible and the currency is secure. This eliminates the chance of fraud claims falling upon the businesses and costing them legally and financially.
The Cons of Bitcoins
While we are a technologically advanced world, the digital currency is yet to be fully accepted. Without many businesses using the Bitcoin, its value will remain lower than its potential. It is also a relatively new media of exchange so it is yet to stabilize to standard software.