The Role of Bitcoin as a Form of Currency
Bitcoin is a form of digital currency that is made and used electronically. Unlike dollars or other forms of currency, bitcoin cannot be printed and neither can it be controlled by anybody. The main use of this type of currency is to buy goods electronically. As compared to conventional money, bitcoin is usually decentralized which is what sets it apart from other currency. The bitcoin network can’t be controlled by anyone including institutions or large banks. Bitcoin is based on mathematics unlike conventional currency which is based on silver or gold. There is usually a software that contains a math formula which is used during the creation of bitcoins. Anyone can check the formula since it is made available to everyone and the software is an open source.
One of the benefits of using bitcoin is that it is easy to set up as compared to the rest. Conventional banks take most people in circles whenever they are trying to open bank accounts. Bitcoin on the other hand helps one to set up a bitcoin address within no time without being charged any fees or being asked questions. With bitcoin, one can be able to open as many bitcoin addresses as they want without their identity being known. Personal information such as your name or address isn’t revealed once you open up multiple addresses. Bitcoin however keeps a record of every transaction that takes place within the bitcoin network. Anyone can tell the number of bitcoins stored in a specific address if one publicly uses them.
When performing a transaction using bitcoin, one isn’t charged any fee which is a major benefit of using it. Bitcoin is a very efficient way of transacting as one can send money to any part of the world and it arrives within a matter of seconds. This takes places as soon as the payments gets to be processed by the bitcoin network. One more characteristic of bitcoin is that it is usually non-refundable. One cannot get the bitcoins back after sending them unless the recipient chooses to send them back.
Bitcoin is becoming more and more popular as most businesses are using it for various activities and transactions. Distance or time is irrelevant when it comes to using bitcoin as it doesn’t affect the transfer rate. By encrypting all the transactions performed through bitcoin, it makes them secure. All transactions involving bitcoin are well documented since all transactions happen online.
Creation of bitcoin acts as a form of reward during a competition whereby users offer computing power to record and verify bitcoin transactions into the block chain. This process is called mining and users who prevail are awarded with new bitcoins and transaction fees. Other forms of currencies, products as well as services can be exchanged using bitcoins.
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