Bitcoin is a digital currency introduced in the year 2009 by an anonymous developer named Satoshi Nakamoto, whose identity till this date remains unidentified. Bitcoin is the world’s first decentralized currency, and it does not have any single administrator or central bank to monitor its activities. The transactions of Bitcoin takes place through peer to peer transactions. The operations take place directly through the use of cryptography without the need for involving an intermediary.
Bitcoins are in fact the reward a miner gets when they mine their computer for the cryptocurrency. The Bitcoins are slowly becoming popular as a payment option and now are currently trending in the securities market. The value of Bitcoin keeps fluctuating day to day, and the total worth of bitcoins in the world equals to $112 billion.
The transactions of the Bitcoins takes place in a public ledger called the Blockchain. The Blockchain records the transactions that happen between a buyer and seller. The maintenance of this chain is through a network of communicating nodes running the Bitcoin software.
Bitcoin does have its share of advantages and disadvantages.
Advantages:
- Bitcoin has far more liquidity than any other type of cryptocurrencies as Bitcoin has its value in physical cash and its most of worth stays intact.
- Merchants are increasingly accepting Bitcoin as a payment method all over the world.
- Bitcoin does do not involve the hassle of cross-border payments that are coupled with other charges when initiating a forex payment between two countries.
- It has lower transaction fees of 1% when compared to the 2% to 3% for most other digital payments.
Disadvantages:
- The Bitcoin like every other currency is susceptible to scams that range from medium to high risk. Such activity does not come under the purview of law like other physical currencies.
- Bitcoin has a high volatility rate, and it remains susceptible to wild price swings over short periods of time, and there are no specific trends to predict the behavior of Bitcoins.
- Bitcoin does not have the feature of chargeback or refund. If the transactions go haywire, the user cannot claim a refund for their lost Bitcoins.
- Bitcoin has paved the way for similar currencies, and they have built-in notable improvements in those currencies thereby making those coins a much safer option than Bitcoin.
Bitcoin has revolutionized the way of payments and currency transactions across the world and has paved the way for the future.