Virtual currencies like Bitcoin have a unique nature. And this gives Bitcoin transactions inherent advantages. The digital money landscape is rapidly and constantly changing. But people are yet to test most virtual currencies as an exchange medium. Users should also exercise caution when purchasing and selling or investing in some of these currencies.
Nevertheless, Bitcoin provides unique advantages over other payment methods. This article explains how Satoshi Nakamoto designed Bitcoin to work and some of its benefits.
Bitcoin Concept
Satoshi designed Bitcoin to function as a peer-to-peer, decentralized cryptocurrency system that allows users to transact via digital exchange units. Satoshi Nakamoto is the mysterious entity that started the Bitcoin network. Today, Bitcoin defines and dominates the cryptocurrency space. It spawns an altcoin followers’ legion while representing fiat money’s alternative. Many people use this cryptocurrency to purchase and sell goods or services over the internet.
But why do people need Bitcoin when the world has many traditional currencies? Well, Bitcoin is unique because of its decentralized status. That means no central authority regulates or controls Bitcoin. And this distinguishes it from conventional money.
Bitcoin uses networked computers to process payments. A shared ledger records each transaction in a blockchain. Each computer informs and updates all accounts simultaneously. Blockchain acts as the distributed ledger that eliminates the need for a central authority for maintaining the records.
There’s no government system or central bank that issues Bitcoin like fiat money. Instead, people mine Bitcoin using computers via a process that entails solving challenging mathematical algorithms to verify all transaction blocks before adding them to the blockchain. People can also use standard money to purchase Bitcoin on platforms like https://bitcoins-digital.com/. Such websites enable individuals to easily access and use this virtual currency without engaging in its mining process.
Benefits of Transacting with Bitcoin
Using Bitcoin to pay for services and items online comes with numerous advantages.
Key among them include:
- User autonomy: Autonomy is the primary draw of this virtual currency for most users. This property is the central tenet that prompts most people to use this virtual currency. When transacting with Bitcoin, you control how you spend your money without involving intermediaries like government agencies or banks.
- Discretion: This cryptocurrency enables people to transact discreetly. Essentially, Bitcoin purchases do not require personal identity unless a user decides to publish this information. Every anonymous address that a person gets when paying with Bitcoin changes with every transaction. But this doesn’t mean Bitcoin transactions are entirely untraceable or anonymous. However, these transactions don’t link with the users’ identity like traditional payment methods.
- Peer-to-peer focus: Since Bitcoin provides a peer-to-peer system, users can receive or send payments from and to anybody within the network globally without requiring external authority’s approval.
- Banking fees elimination: Crypto exchanges charge taker and maker fees. Users can also pay occasional withdrawal and deposit charges. However, this virtual currency does not subject users to banking fees that are inherent for fiat money. A Bitcoin user does not need a minimum balance or account maintenance fee. What’s more, Bitcoin does not involve return deposit fees or overdraft charges.
In addition to these advantages, Bitcoin is easily accessible to users. A user needs a digital wallet that allows them to transact with Bitcoin using their mobile phone or computer. What’s more, Bitcoin transaction fees are lower than wire transfers and other systems that enable people to transact across borders. All these advantages make more people prefer Bitcoin over other payment methods and fiat money. Today, more people opt for Bitcoin, especially when sending or receiving money from outside their countries.
