Bitcoin is a type of cryptocurrency that is free from the influence of traditional banking. The currency first came into circulation in 2009 and was invented by an individual/group called Satoshi Nakamoto. The identity of the creators is still unknown.
Bitcoin exchange rates are independent. They are autonomous of the central bank and no government/private authority governs the supply of this type of currency.
The only factor that determines Bitcoin’s worth is the trust level of users. The more companies accept Bitcoin as a payment, the higher its value goes. How Bitcoin works?
What Are the Benefits of Bitcoin?
Wondering what are the advantages of Bitcoin? The list is quite long. But let’s take a look at some of the major benefits that this currency has to offer.
As the bitcoin is free of any third-party influence, there is no system to implement taxes on this money. The only form of tax that may come with bitcoins is if someone purposely sends a small percentage of payment as cash.
Free of Third Party Seizures:
Again, as there are no third-party involvements and no unnecessary copies of transactions are made, the chances of Bitcoin being seized are zero. This implies that the government can’t freeze the Bitcoin accounts and the users can do whatever they want with their money.
The Transactions Are Tracking Free:
The Bitcoin transactions are tracking free. Unless a user publicizes his wallet address, there is no way a transaction can be traced backed to him/her.
In case a user mistakenly made his wallet address public, a new wallet address can easily be generated. The benefit of keeping your wallet address a secret is that no one can ever know how much money you have in your account.
This means more privacy as compared to the traditional currency systems. You can read details about the theory behind a Bitcoin transaction.
All the Transactions Are Free of Cost:
There are no costs involved in Bitcoin transactions. Users can send/receive money in whichever part of the world they want. The only cost that may come with Bitcoin transactions is the vendor fees that they charge in return for the services they provide.
What Are the Risks of Bitcoins?
Using Bitcoins is not always safe. There are some risks associated with Bitcoin. The risks may include:
Bitcoins Are Easy to Lose:
There is not any system to recover lost bitcoins. If lost, they are gone for good. You have to be very careful to prevent your bitcoin account from hackers otherwise your account may compromised.
They are hard to trade:
Bitcoins are hard to trade as compared to transferring the normal currency. Although there are vendors that trade bitcoins, it’s not as easy as sending money via PayPal, Western Union or some other money transfer service.
Too New In The Market:
Bitcoins appeared on the radar just a few years ago, so it’s hard to predict what their future would be.
Lastly – They Can’t Be Used to Buy Stuff For Now:
Bitcoins are still not the complete replacement of real money and are only accepted at very few places as a form of payment. So, it’s still pretty hard to buy stuff using this currency.
How does Bitcoin works?