The Role of Bitcoin as a Form of Currency
A form of digital currency that is made and used electronically is referred to as bitcoin. While other forms of currency such as dollars can be printed and controlled, bitcoins can’t. Bitcoins are mainly used by people to purchase items electronically. What sets this kind of currency apart from other types of currencies is that it is decentralized. Big institutions such as banks cannot claim any control over bitcoin network. While bitcoin is based on mathematics, other conventional currencies are based on either silver or gold. In order to produce bitcoins, one needs to be well equipped with a software that follow a designed mathematical formula for producing these coins. This software is an open source and the formula is made available to anyone who wants to use it.
Unlike other forms of currency, bitcoin is very easy to set up. While using conventional currency, one is taken in hoops when they are trying to open a bank account. When it comes to bitcoin, one is simply required to get a bitcoin address within seconds without being charged. With bitcoin, one can be able to open as many bitcoin addresses as they want without their identity being known. These addresses aren’t linked to any addresses or names or other identifying information. However, bitcoin keeps a record of each transaction that takes place within the network. Anyone can tell the number of bitcoins stored in a specific address if one publicly uses them.
One more advantage of using bitcoin is that it is very cheap and affordable as one isn’t charged a dime when performing any transaction. Another benefit is that one can send money to any location and it arrives within a short period of time making this currency very reliable. This takes places as soon as the payments gets to be processed by the bitcoin network. One more characteristic of bitcoin is that it is usually non-refundable. After sending the bitcoin, the only way one can be refunded is when the recipient chooses to send it back.
Bitcoin is becoming more and more popular as most businesses are using it for various activities and transactions. By using bitcoin, distance or time doesn’t affect the transfer rate as the user can transfer the bitcoins within a very short time. Since users can encrypt this kind of currency, all transactions that are conducted through bitcoins are safe. All transactions involving bitcoin are well documented since all transactions happen online.
Users of bitcoin enter into some kind of competition whereby they offer computing power to verify as well as record bitcoin transactions into the block chain. This process is called mining and users who prevail are awarded with new bitcoins and transaction fees. Other forms of currencies, products as well as services can be exchanged using bitcoins.