Bitcoin is a common term, but most people do not have a clear idea of what it is. Bitcoin is a decentralized peer to peer, digital currency system. It is designed to give online users the ability to process transactions through digital units of exchange called Bitcoins. It is, in essence, a virtual currency. Bitcoin has gained huge attention as well as controversy as an alternative to euros, dollar, and commodity currency like gold.
As a new and growing virtual currency, it has some distinct merits over conventional currencies. Below are some benefits that you will get when using Bitcoin.
Flexible Online Payment
Bitcoin is an online payment, and like any other online payment system, its users have the luxury of paying their coins from any corner of the word as long as there is an internet connection. This implies that you can be lying on the bed and purchasing coins instead of traveling to a specific store or bank to get the work done. Besides, online payments via Bitcoin do not need you to fill in details about your personal information. Bitcoin transactions are therefore much simpler than those carried out through credit cards or bank accounts.
When making payments via euros, dollars and other conventional currencies, you must pay an additional sum of money as tax. Every purchasable item has it designated tax rate. When purchasing with Bitcoin, sales taxes are not added you the purchase. This is deemed a legal form of tax evasion, and this is the main advantage of using Bitcoin. With zero tax rates, it can come in handy especially when buying luxury items which are exclusive to a foreign land. Such items usually are heavily taxed by the government.
Concealed User Identity
All Bitcoin transactions are discrete, meaning Bitcoin gives you the option of user anonymity. Bitcoins are similar to cash only purchases as the transactions can never be traced back to you. These purchase are also never connected with your personal identity. The Bitcoin address created is usually not the same for two different transactions.
Minimal Transaction Fees
Fees and exchange costs are part of international purchases and wire transfers. Bitcoin is not moderated or monitored by any government agency or intermediary institution. The cost of transacting is therefore kept very low unlike international transactions made through conventional currencies. Additionally, transactions in Bitcoin are not time-consuming as it does not involve the complication of typical authorization and waiting periods.
No Outside Interventions
One of the most significant merits of Bitcoin is that it eliminates third-party interruptions. This implies that banks, governments, and other financial intermediaries have no authority to disrupt user transactions or freeze accounts. Bitcoin is based strictly on a peer to peer system. Users, therefore, enjoy greater liberty when making purchases with Bitcoin than when using conventional currencies.
Digital currencies like Bitcoin are comparatively new and have not yet been put through significant tests. Thus most people feel there are risks involved in the usage of Bitcoin. Irrespective of potential disadvantages, Bitcoin has a lot of merits that make it a legitimate contender to challenge currencies in the future.