Bitcoin basics, advantages, and disadvantages
Bitcoin is the leading currency in the Cryptocurreny or digital currency. The electronic cash is independent of any government, country, group, or banks. Millions of miners worldwide rely on the power of the Bitcoin and there is enormous growth since inception. Multiple businesses and non profits accept the Bitcoin as a payment method.
The decentralized virtual currency was found in 2009 by a group named as Satoshi Nakamoto. The founders released a paper about the features and working of Bitcoin.
Bitcoin's main target is to reduce intermediate charges and dependency between two parties. Since it is accepted and recognized worldwide, the Bitcoin also reduces unnecessary remittance fees charged by several financial institutions.
The peer to peer electronic cash transfer system is developed and controlled by the users themselves. Bitcoin has its own tracking and verification methods that makes it extremely powerful.
Bitcoin acceptance in online shopping and stores has let the users leverage the currency and reduce any hidden transaction fees.
Users create accounts in the Bitcoin system and can purchase the bitcoins using the normal modes of payments such as cash, credit card, bank transfer, PayPal, and so on.
All the transactions are updated at each user and everyone is able to see other peoples accounts. The users are anonymous and are assigned codes for privacy.
Bitcoin transactions are guided by several rules set up by the founders. Transactions are guided by verification of the public and private keys. Receiving and issuing funds are time sensitive due to the varying nature of the national currencies (fiat). All the transactions are stored and recorded in the public ledger also known as Blockchain.
Acceptable level of privacy of the account holders is possible in the Bitcoin system. Contracts are possible through escrow and arbitration accounts. Several processes protect the account holders by additional verification and confirmations.
Bitcoin Peer-to-Peer network broadcasts the transactions and blocks. Wallets are used for sending and receving satoshis by users and are also compatible with the Bitcoin network.
The main advantage of Bitcoin is that is inependent of any financial institution or one country.
Bitcoin is heavily dependent on the users, Internet, electronic devices, and electricity. Only twenty five percent of worldwide population are aware of the network. Users with no computers and internet are unable to leverage the Bitcoin system.
As an emerging currency, Bitcoin is volatile and is yet to reach the maximum. Markets are constantly changing for Bitcoin.
Some countries have banned Bitcoin where as in the US, IRS has delared Bitcoin as taxable revenue. US and China are the two largest users of Bitcoin. Limited acceptance with vendors and merchants is a huge challenge for Bitcoin. Only 21 million Bitcoin are predicted and future cuts are also planned.
Security is a big challenge for Bitcoin users. If a private key or hard drive is lost, the user is unable to retrive their money. The transactions are prone to hacking and double payments are possible. Most buyers are totally clueless about how to redeem or use the Bitcoin currancy. Bitcoin is also heavily relying on software which is always undergoing changes.
Getting started with Bitcoin is as simple as creating an account with the providers. You can buy Bitcoin currancy with fiat, credit cards, or PayPal. You can start using the Bitcoin currancy for online shopping and in stores.
Coinbase, Paxful, Localbitcoins.com, bitsquare.io, and so on are some of the exchanges where you can create accounts and start buying Bitcoins. They also have digital wallets to avoid any delays. Bitcoin matching is done by exchanges based on the demand and supply.
Bitcoin is accepted by most charities and businesses. Microsoft, Dell, Overstock, Subway, WordPress, Wikipedia, and so on are accepting Bitcoins as a method of payment.
Major competitors of Bitcoin include Ethereum, Litecoin, NEM, Dash, Ripple, Monero, and so on. Some Cryptocurrency providers send weekly payments just for having money with their accounts. However, Bitcoin is the leading Cryptocurrency and has a scope for growth.