What is Bitcoin, and What are the Advantages of it?
Virtual currencies are invented to provide users better opportunities than traditional currencies. Not only has this, but the unique nature of these currencies had some advantages through bitcoins over traditional currencies. The most trending and popular cryptocurrency was invented a decade ago, and with its invention, the graph of digital currencies keeps changing constantly. Bitcoin becomes the cryptocurrency that is widely used as a medium of exchange across the world. Before entering into the world of cryptocurrencies and starting investing in them, it is imperative to know about their benefits and risks.
As compared to other methods, bitcoin is designed to provide numerous advantages to its users. But first, it is crucial to understand what bitcoin is, who designed it, and then understand its advantages. You can use Crypto Genius by investing in it when the price is low and selling it when it is at its peak. Moving forward, we will gain some knowledge of bitcoin.
What is Bitcoin?
Bitcoin is a digital currency that follows a person-to-person cryptocurrency system. It is designed to provide convenience to online users to easily make transactions using the digital token referred to as bitcoins. The bitcoin network concept came into existence in 2009 by an individual or a group of individuals named Satoshi Nakamoto. He created Bitcoin as an electronic medium of exchange that eliminates middle-men need like central authority or financial institutions.
You might be thinking what the need for bitcoin is when there are various traditional currencies to make payments. The main thing is that bitcoin is a decentralized currency, which means it is neither controlled nor governed by banks or central authority. The fact that it is a decentralized currency distinguishes between fiat currencies and bitcoin.
The bitcoin network processes payments via a network of connected computers linked to a public shared ledger. Every bitcoin transaction is recorded in this public ledger named “Blockchain.” The blockchain does the work of verifying each bitcoin transaction and records it to make it transparent for everyone. The contracts between two parties are made on the blockchain, eliminating the need for third parties like central authority to verify the transaction or maintain the records.
Advantages of Bitcoin
Now you have gained knowledge on what bitcoin is and about blockchain technology. We will know the advantages of it to users and understand why it is gaining so much popularity.
The entire bitcoin payment system is the person-to-person focus, which means that the contract is made between users. The users can send and receive bitcoin payments on the bitcoin network. No approval of central authority or banks is required while making a bitcoin transaction.
Eradication of banking fees
While exchanging the cryptocurrencies, the maker and taker fees are charged by the users. Not only this, at the time of deposit and withdrawal of funds, a fee is charged. In the Bitcoin network, the users don’t have to pay any traditional banking fee because no banks are involved. The users are free from minimum balance fees, no returned deposit fees, no overdraft charges, and no account maintenance fee.
Low transaction fee
Usually, foreign purchases and standard wire transfers include exchange costs and fees. Because there are no intermediaries involved in the bitcoin network, the costs of transactions are minimal. The users don’t have to pay extra fees to get their transaction complete fast. Not only local but users can make international payments fast by paying a small amount of transaction fee. Also, the transfer of bitcoins is done quickly by paying a bit of a transaction fee.
The main thing that attracted a lot of people toward digital currencies like bitcoin is user autonomy. Digital currencies provide users more autonomy when compared to fiat currencies. Users have full control over their money and can track their cash flow without any bank or central authority involvement.
Bitcoin is an electronic medium of exchange, and like other online payment methods, bitcoin also allows its users to do the transactions anytime and anywhere. The users have their coins in hand and can make purchases anytime using bitcoins. Bitcoin has entered into the mainstream, and most of the businesses and retail shops have started accepting bitcoin payments. Also, using mobile wallets don’t necessitate users to share their personal information to perform the transactions.