Bitcoin has become the only cryptocurrency that has shocked people with its invention and features and is gaining popularity across the world. The invention of bitcoin has changed the method of making payments, and it eliminated the need to carry cash or debit/credit cards for shopping. Bitcoin is a virtual currency invented in 2009 by an individual or a group of individuals known under the alias name Satoshi Nakamoto. Satoshi’s main goal was to create a system that allows peer-to-peer transactions by eliminating the requirement of physical cash.
Bitcoin allows users to digitally exchange money without involving third parties, including the government, central authorities, and more. Earlier, people used to know about commodity currencies and fiat currencies, but now they are more excited to know about digital currencies. With the increasing popularity of bitcoin records, not only businesses and companies have started accepting it, but many countries have made bitcoin payments legal. Developers are creating <> codes and trying to develop more digital currencies like bitcoin.
Let us first know what bitcoin is, and then we will move on to know some benefits of it as a method of payment.
What is Bitcoin?
Bitcoin is a digital currency that allows users to digitally exchange money through a network of computers that are connected privately to help secure bitcoin payments. Each bitcoin transaction is verified first by bitcoin miners and is then added in blocks added into the blockchain. The blockchain maintains a record of all bitcoin transactions to avoid the issue of double-spending and prevents users from duplicating bitcoins.
The miners tend to mine bitcoin by solving complex mathematical algorithms. There are many different ways to buy bitcoin, including bitcoin exchange, bitcoin ATMs, and even bought using traditional currencies. But in today’s time, some investors are highly attracted to mining because through mining, and miners earn bitcoins as a reward. A lot of investors are attracted and are choosing mining as a way to earn bitcoins.
Moving forward, let us explore some astonishing benefits of using bitcoin as a medium of exchange, which is as follows:
Less risk for buyers
Unlike fiat currencies, in which users tend to send and receive money through banks by sharing their bank account details, this is not the case with bitcoin. While completing the bitcoin payments, the users must not share their personal and financial information details.
This is quite a big benefit for buyers for those who don’t want banks or other central authorities to keep an eye on their funds. Also, because bitcoin is a decentralized currency, it doesn’t involve government who knows your real identity or keep track of your cashflow.
Despite recording all the transactions in the distributed public ledger, blockchain uses a cryptographic method to secure user and transactions’ identity. The anonymity of the user is maintained in blockchain because it is decentralized in nature.
Because no central authority or government is involved, no one can trace your transactions or flow of cash. The bitcoin users use the bitcoin wallet, and the address of the wallet generated is completely anonymous. The bitcoin address tends to change after each transaction even if the same user does it.
No or minimal transaction fees
Since its invention, no transaction fee was charged while making bitcoin payments. When the computational puzzles got difficult, the miners charge a minimal fee to complete the transaction on a priority basis. Even if the users do international transactions, they are charged a minimal transaction fee. With no involvement of intermediaries, carrying out transactions with low transaction fees has become possible.
Not only the transaction fee is less, but also the transactions are completed within a few minutes. Unlike banks, you don’t have to wait for days for transactions to get completed.
While making payments through banks or credit cards, the sender is allowed even to reverse the payment whenever required. In online businesses, this happens a lot when the products get dispatched from the warehouse, and the customer returns the product to get back the payment done. In bitcoin payments, it is totally different as the transactions once made can never be reversed.