Bitcoin is a growing sensation everyone wants to be a part of. This fresh idea is a system which comes with its own currency. Bitcoin is a payment system and bitcoins are the cryptocurrency used within the system. Bitcoin was invented by an unknown group of people and is not owned by anyone. Anyone can use it and everyone ‘plays’ by the same rules. There is no head company which is in control of everything. It is fair to say that this is a non-restrictive system.
It works as a payment system on a global scale. The currency is earned through the so-called ‘mining’ process. First, you mine the bitcoins and then you can exchange them for other currencies or products.
It is famous for being the first example of a decentralized digital currency. When we say decentralized we mean that it works outside of the jurisdiction of a bank or any sort of administrator. It works on a peer-to-peer network and this way completely omits the middleman. Financial transactions are done directly between users. This has been seen as very practical and cost-effective way to transact. No one can stop or restrict your transactions. It is a global market sending bitcoins back and forth without any constraints. No bank or government is included.
This freedom is a double-edged sword. Since you do not have any supervision and there are no available authorities, you have nobody to file a complaint to. In regards to this, the only rule you need to follow is to only work with people who are trustworthy.
Everything is recorded in the blockchain which is a publicly distributed ledger. This means that it cannot remain anonymous. Anybody can trace your actions and find out your identity inside the system. There are different approaches to hiding your identity. There are even companies which offer a variety of tools to help you conceal yourself in the Bitcoin world. If you need your privacy you will surely be able to obtain it. It will not be an easy task but it is sometimes better to secure yourself early on.
New Wave Banking
For a lot of people, the Bitcoin system seems like a new approach to banking. This efficient payment network seems to be getting a lot of attention and praise for being so forward-thinking and innovative. It leaves out the middleman and leaves the transactions to the users. This breaks the banking tradition and poses the inevitable question: Is this the future?
Arguably there is a belief that this is just at rending sensation which will disappear as easily as it arrived. However many innovations were met which such skepticism at the early stages of their development. Bitcoin can be the future simply because it is already the present. People are making payments with bitcoins regularly. Those who don’t own any are buying them eagerly. Everyday transactions are being made via Bitcoin and this cryptocurrency has become a leading success. Bitcoin has proven that monetary value can successfully be transferred online and more importantly without any authoritative control.