What is Bitcoin?

What is Bitcoin?

Bitcoin is a digital currency that was created in 2009 by an unknown person Satoshi Nakamoto, whose real identity has yet to be verified.  It allows people to buy goods and services and exchange money without involving third parties like the government, bank, or a market regulator. There are no physical bitcoins, only balances kept on a public ledger in the cloud. Despite the fact that it is not a legal tender, more merchants are beginning to accept bitcoins.

How Bitcoins Work?

Bitcoins are completely virtual coins that are not tied to a bank or government and allow users to spend money anonymously. Users compete to “mine” bitcoins using computers to solve complex math puzzles. This is how bitcoins are created. Users can send bitcoins to each other using mobile apps or their computers. It is similar to sending cash digitally. The coins can be bought or sold on several marketplaces called “bitcoin exchanges” using different currencies.

Who Regulates Bitcoins?

Bitcoin itself is regulated by it’s own blockchain and the mathematics behind that. Bitcoints are completely digital and decentralized. Bicoin itself controlled by bitcoin users, rather than by a central authority like a government or a bank. There is no precious metal behind bitcoins and the value of the currency resides within the currency itself. 

Who is Using Bitcoins

Bitcoins are the largest crypto currency or digital currency. Many large businesses and companies are accepting payments in bitcoins as a legitimate source of funds. Due to media coverage the currency is becoming more and more popular with each passing day. But still many individuals and businesses won’t accept bitcoins for payments.

Advantages of Using Bitcoins

Following are the advantages of using bitcoins:

1. User Anonymity

Bitcoin transactions and purchases are discrete. Unless user voluntarily publicizes his/her bitcoin transactions, no one can trace his/her transactions back to him/her. The bitcoin address that is generated for user purchases changes with each new transaction. Even no one will be able to know how many bitcoins are there in the wallet other than the wallet owners.

2. Freedom of payment

The most publicized benefit of bitcoin is that government, banks and other third parties have no way to interrupt users bitcoin transactions or accounts. You will have complete freedom to do anything with your bitcoin money. There is no third party to intervene.

3. Mobile Payments

With bitcoins you can send and receive money to and from any part of the world. Like other online payment systems, bitcoin users can pay for their coins anywhere they have access to internet facility.

4. Cannot be Stolen

There are no physical bitcoins. Bitcoins are lines of computer code that are digitally signed each time they travel from one user’s account to the next. Bitcoins could not be stolen unless someone have physical access to a user’s computer, and then send the bitcoins to some other account.

5. No Taxes

Since there is no way for a third party to intercept or track bitcoin transactions, therefore there is no way to implement a taxation system for bitcoin transactions or purchases.

6. Low Transaction Costs

Since bitcoin transactions have no government, bank and other third parties involvement, the costs of transacting are kept very low. 

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