What are bitcoins? Learning the benefits over fiat currency
With a persistent change in currency landscapes, users are adapting less risky mediums of exchange while making the most out of financial transactions. The inherent advantages of virtual currencies over paper money are visible. Making use of distinctive characteristics, virtual currency such as bitcoin offers several benefits over other payment methods. Peeking into these benefits: the concept of cryptocurrency (bitcoin) must be explored.
Explaining bitcoin:
The digital units of exchange or bitcoins are converted into financial transactions through a decentralized cryptocurrency system. Within this integrated cryptocurrency system, online transactions are performed peer to peer. From presenting a substitute currency system against fiat currency to defining a whole new cryptocurrency space, the network has progressed a lot since 2009. Bitcoins have completely dominated not only pure commodity currencies but also government currencies such as the euro, pound, and the U.S dollar.
But why we needed a separate payment system in the presence of a government-regulated traditional payment system. One of the key factors of using this decentralized cryptocurrency is that it is not regulated by any central government authority. Using a shared ledger: the transactions are operated through an independent network. Every single transaction is mentioned in the blockchain. The computers monitoring these transactions keep all the accounts updated by forming a distributed ledger in the shape of a blockchain.
Mined through complex mathematical algorithms: the system becomes very secure and impenetrable. However, you can also purchase bitcoins with money and create a bitcoin wallet. This wallet is easily accessible using a computer or smartphone. You can also install the bitcoin digital software to manage and track all the digital transactions.
Benefits over fiat currency.
Overviewing the concept and process of working, here are some benefits of using bitcoins.
Easily accessible and confidential.
Using only a computer or even a smartphone, you can transfer bitcoins. It eliminates the need for accessing the traditional payment methods, maintains credit and debit cards, or using banking systems. All you need is a stable internet connection, and you can send and receive bitcoins like another currency.
In the case of purchases, your identity is never revealed. Additionally, the whole process is very discrete. The money cannot be tracked back to or linked to any user unless or until he reveals his identity. Therefore, during every purchase, a new bitcoin address is generated with each transaction making the process quite hard to track, unlike traditional payment systems.
No hidden fees.
There are no hidden fees attached to the system. Ir means no traditional banking fees at the time of deposit or withdrawal. While using a bank account, you have to pay yearly maintenance dues, overdraft charges and also maintain a certain balance to keep the account active. However, in the case of cryptocurrency exchange, you are not subject to any hidden fees.
Additionally, there are no such costs as foreign purchases and wire transfers in cryptocurrency. It is because these digital transactions have zero involvement in government institutes. As a result, transaction costs are low. Secondly, the process of transferring is amazingly fast. It is because there are no user authentications or authorizations involved along with waiting periods.
The bottom line:
Concluding the discussion, the cryptocurrency system is more secure and discrete than any traditional payment method. Despite getting banned in many countries, more people are adopting this payment method due to anonymity and remote access.
