What Is Bitcoin?

In a data-driven world, digital payment methods have become commonplace.

Credit cards, debit cards, PayPal, and other payment systems provide us with an unprecedented variety of choices when paying for goods and services on the Internet.

Most digital payment methods have a common flaw.

They leave traces by which governments and banks can easily find you.

Even if you pay for something through PayPal, any payment can easily be traced back to the person who made it.

If you are serious about anonymity and the protection of personal data, there is still good news for you since you can pay with bitcoins.

How did bitcoin come about, and how do they work?

Bitcoin considered a cryptocurrency, is a currency protected by encryption.

The project was first released in 2008.

The blockchain is the main technology behind Bitcoin, as it makes it possible to send the coin.

It is similar to an accounting book in which all transactions made with Bitcoin have been recorded since the beginning of its history.

Bitcoins are a kind of cryptocurrency and are not dependent on any central bank.

Bitcoins exist regardless of traditional currencies such as the British pound, the US dollar, or the euro. In this regard, bitcoins resemble gold and other precious metals that paper money was once backed with.

Bitcoins are mined.

Only instead of brandishing a pickaxe does a person extracting bitcoins force the processor of his computer to solve incredibly complex mathematical problems. In exchange for the spent processor time, he receives bitcoins.

This process is called mining. The process of exchanging bitcoins passes through the P2P system, that is, directly between users. You do not need intermediaries

However, payments and mutual settlements are still recorded in a special registry, which exists in a distributed form among numerous nodes. Today, bitcoins are the main anonymous digital payment tool in terms of the number of users and the total value of the currency.

Each bitcoin user in the system has his own unique address, which consists of a very long and complex sequence of characters and numbers.

Bitcoin main features

1) Decentralized network.

Through the blockchain, you can send Bitcoins to anywhere in the world without the intermediation of any company or institution. From your computer, you can send money without depending on the bank.

2) High speed.

When we make bank transfers within the country, transactions are usually instantaneous. And to ship abroad? It’s a big bureaucracy!

You need to fill in specific documents that give a lot of headaches. After all the paperwork is done, it takes a few days (or even weeks) to reach your destination. With Bitcoin, you can send abroad in a matter of hours or even minutes.

3) Lower costs.

In the beginning, Bitcoin was able to perform very fast transactions at virtually irrelevant costs. As their adoption has grown, transactions have jammed the blockchain and made costs soar for those who want a faster transaction.

It is still possible to pay pennies for Bitcoin transactions, but this may slightly compromise the speed of your transaction.

4) 24-hour operation.

Unlike banks and businesses in general, the blockchain operates 24 hours a day, every day of the week. If you would like to submit funds, you will be able to send it in the same way as during business hours.

In conclusion,

Bitcoins are best-used for the currency to purchase digital services online.

The use of VPNs, cloud storage systems, software, and other digital services, do not require the disclosure of personal information, thus maintaining personal anonymity.

Author:

MagForex has been actively trading Forex since 2008 and up until today, he is still very active in Forex and added Bitcoin and other Cryptocurrency pairs in his trading portfolio.