What is bitcoin?
Bitcoins can be described as a sort of virtual
currency system. It was introduced as recently as in 2009. Is a sort of
software which facilitates online payments and can be used further for other
transactions or exchange. This doesn’t mean that you can do online shopping
with bitcoins, but all kinds of electronic transfers and transactions can be
done by bitcoins. It is not considered as a legal system of currency and is
also addressed as cryptocurrency. But Bitcoin is the largest cryptocurrency
which is also decentralized.
The difference between Bitcoins with capital ‘B’ and
bitcoins with a small ‘b’ is that the former refers to the entire system, and
the latter is the actual currency.
How does Bitcoins work?
Once you have bitcoins in your possession you can
use them to give to your friends, some merchants etc. the purchases made with
bitcoins, the accounts of who possesses how many bitocins is all stored
digitally. It is like an audit in itself, where there is a record of each and
every bitcoin transaction. This system of online storing is called as
‘blockchain’. There are people who keep checking the blockchain, we can call
them the auditors for bitcoin transactions. Their main job is to facilitate the
bitcoin transactions safely and confirm them. These people are technically
called as ‘miners’ and the merchants who hire them reward them for the services
in terms of minted bitcoins.
Many people tend to buy bitcoins similarly to the
way one would invest in forex. They buy it at a lesser price and sell them when
then prices are higher. It is an easy way to make money. Bitcoin is being
slowly accepted as a new form of making other payments too. Certain big
companies have already approved this kind of transaction. Currently there are
worth $1.5 billion worth of bitcoins in circulation all over the world.
Pricing of bitcoins:
Their prices are decided in relation to other
currencies, like usually currency rates are decided. They keep fluctuating. The
price is not fixed as such, so there has to take place a bargain between the
buyer and seller in some sense. This is done against some set standard rates.
You
Why choose Bitcoins?
You might be thinking that if real currency can do
the same work as bitcoins does, then why use it? the answer to this question is
that with bitocins, you can do any amount of transaction. A bigger transaction
normally takes quite a while when you transfer the money, and there is always a
problem of the cash being fake in case you gave some hard cash. But with
bitcoins, the transactions take place within a matter of minutes and you have
to stop worrying about all the other matters. The entire deal is totally
hassle-free.
The second best thing is that for sellers, accepting
through internet banking or credit cards involves paying of certain fees. But
if the transaction is done with bitcoins, the fees are waived off. So from a
seller’s perspective, it is far easier for him to accept bitcoins.
This is slowly gaining a lot of popularity with both
the buyers and sellers, thanks to the transparent and fair system. Local
Bitcoins may soon become an acceptable payment method everywhere.
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