The advent of the internet and its ever-increasing list of capabilities has changed the landscape of business and trade the world over. To keep up, financial markets have changed along with it. Cryptocurrency is the latest development and evolutionary step in online payment methods.
More than a decade old, virtual currency is convenient and easy to use, which has made it an increasingly popular choice to trade and conduct online payments. Bitcoin, the first digital currency, is explicitly designed as an easier alternative to traditional means of banking.
Understanding Bitcoin
Bitcoin is a form of virtual currency that, through computers and special hardware, is “mined” and then held in a digital wallet. Using online brokers, Bitcoin may also be bought using standard currency. This cryptocurrency system design allows users to transact securely online using digital currency as a unit of trade.
Bitcoin is not centralized, meaning it is not controlled by any government or other central entity. This is due to the unique and innovative way in which Bitcoin operates. Transactions are processed through a private, secure online network and are recorded onto a blockchain. The blockchain serves as the data ledger for payments and records, negating the need for a third party or regulating authority.
Among the advantages to using Bitcoin are:
- Control
Other than the element of safety, autonomy is the primary drawing card pulling more people towards cryptocurrencies. Digital currencies like Bitcoin offer owners full control of their e-wallets and money. Unlike people with traditional currencies, users of Bitcoin are not subject to banks or other third parties to access their assets
- Safety
For years, virtual-money enthusiasts have claimed that the use of cryptocurrency is considerably safer than that of standard currency. This is due to Bitcoin’s use of a unique and private set of numbers (or key) required to access the funds. This key is known only to the wallet owner, significantly reducing the chance of theft.
- Privacy
Purchases made using Bitcoin are anonymous unless the buyer decides to make their information public. Similar to cash purchases, transactions made via Bitcoin are not necessarily associated with the buyer’s identity. This is not to say that the transaction is entirely untraceable, but it is harder to link than more standard payment methods.
- Lower Fees
Since transactions run directly from one account to another, users are not subject to any monthly banking fees. In addition, because no third parties are involved when making transfers or purchases, doing these transactions via Bitcoin is often cheaper than using a debit/credit card.
Conclusion
Even though it is new to the scene compared to more traditional currencies, Bitcoin is fast becoming a widely accepted and used payment method. Considering that users can transact safely and anonymously, it is no surprise that more people are moving towards using virtual currency.
The elimination of a third party, and its subsequent fees, make cryptocurrency more appealing financially than that of traditional banking systems.
Source of information: Tradingbrowser.com
Disclaimer
Please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. CryptoMode is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.
