Bitcoin, the digital currency was not too long ago a matter associated with computer geeks and speculators, in the last few months has broken into the general public, gaining more press coverage and popularity worldwide. But what is Bitcoin, how it can be used and how can you buy and sell the digital currency.
What is Bitcoin:
Bitcoin is a Digital Currency, which was created as an alternative to the currency we are familiar with. Basically it is a currency which is not managed by a central bank, so no central bank/Government controls or regulates the currency, it is controlled and regulated by the owners of the currency itself. As the currency is based on an open-source code which can be reviewed by anyone.
Here is a great video from the official bitcoin website which summarizes it quite well:
What are the benefits of bitcoin?
Low transaction fees, no charge-backs, no intermediary, anonymity- on every transaction you do not need to transfer personal information or identification details.
How can you pay with bitcoins?
Just as you do with your current paper money, you will need to store your coins in a wallet. As the currency is digital so is the wallet, you will need to chose an electronic wallet of your choice to store your bitcoins. You can have a wallet which is a software installed on your computer. If you use this system it is very important that you keep your computer safe and backed up, if you lose your computer you lose your coins. A better option is to have your wallet stored online, with access from you mobile. In this case, your funds won’t be lost, unless you lose your password, so make sure you don’t forget it.
Paying with your mobile is the most practical way- you can pay in physical stores simply by scanning a QR code or using your NFC compatible device.
Where can you pay with bitcoins?
When it was first launched not many place accepted bitcoins. The places that did accept at the beginning made incredible profits, for example a pizza bought 3 years ago for 10,000 BTC would be now worth close to $9 million, at the time 10,000 BTC were worth only $25. Now days more and more places are accepting bitcoins, from local bars where you can buy a beer in BTC to larger websites which offers services like – wordpress and reddit.
Why is there so much buzz about this lately?
The chart below explains most of the hype, as you can see in the chart, since the beginning of the year the value of the currency has increased (against the USD) by 6,000% and the peak it was more than 9,000%. And not only that the value of the currency has gone up substantially, more and more businesses are now accepting bitcoins in return for its services and goods.
Many argue that Bitcoin is the future of currency and that we are on a verge of a revolution. But keep in mind that the governments still control most of the funds in the world and they’re not about to let go the potential taxes that they can generate from the transaction. Furthermore the current lack of regulation, which is seen as a benefit for most Bitcoin enthusiast, is also the Achilles heel – the lack of paternalism and regulation makes it easier to be a victim of frauds and scams, and it also makes it easier to pay for illegal practices.
The question that should be ask now is – will the governments embrace the new trend and adapt the current regulation, or will they fight against (as China was the first one to do so).
Personally I do believe that we are on a verge of a revolution, and that the world of finance is about to be change drastically, will bitcion be the one that will revolutionize the world of finance remains to be seen.
No comments:
Post a Comment