Most people have heard of the term Bitcoin, but have no clear idea of what it actually is. Simply defined, Bitcoin is a decentralized, peer-to-peer, digital currency system, designed to provide Internet users with the ability to process transactions through a digital exchange unit known as Bitcoins. In other words, it is a virtual currency.
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The Bitcoin system was created in 2009 by an undiscovered developer (s). Since then, Bitcoin has garnered a great deal of attention, as well as controversy, as an alternative to the U.S. dollar, the euro, and commodity currencies like gold and silver.
A private network of computers connected by a common program is used to perform transactions and process payments in Bitcoin. The creation of Bitcoin is based on increasingly complex mathematical algorithms, and purchases are made using standard national monetary currencies. Bitcoin users can access their coins via smartphones or computers.
As a new and growing virtual currency, Bitcoin has certain distinct advantages over conventional government flat currencies. Here are 5 benefits you will enjoy when using Bitcoin
1) No taxation
When you buy in dollars, euros or any other national currency, you have to pay the state an extra amount of money as a tax. Each item that can be purchased has its own tax rate. However, when you shop via Bitcoin, sales tax is not added to your purchase. This is considered a legal form of tax evasion and is one of the main advantages of the existence of Bitcoin users.
With zero tax rates, Bitcoin can come in handy, especially when buying luxury items that are exclusive to a foreign country. Such items are often taxed by the state.
2) Flexible online payments
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Bitcoin is an online payment system and like any other such system, Bitcoin users have the luxury of paying for their coins from any corner of the world that has an internet connection. That means you could lie on the bed and buy coins, instead of bothering to travel to a particular bank or store to get the job done.
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Moreover, online payment via Bitcoin does not require you to fill in details about your personal information. Therefore, Bitcoin processing Bitcoin transactions is much simpler than transactions made through US bank accounts and credit cards.
3) Minimum transaction fees
Replacement fees and charges are an integral part of standard foreign exchange transfers and international purchases. Bitcoin is not monitored or moderated by any intermediary institution or government agency. Therefore, transaction costs are very low, unlike international transactions executed through conventional currencies.
In addition, it is not known that transactions in Bitcoin are time consuming as it does not involve the complications of typical authorization requirements and waiting periods.
4) Hidden identity of the user
All Bitcoin transactions are discrete, or in other words Bitcoin gives you the option of user anonymity. Bitcoins are similar only to cash purchases in the sense that your transactions can never be tracked and those purchases are never linked to your personal identity. In fact, the Bitcoin address created to purchase a user is never the same for two different transactions.
If you want, you have the option of voluntarily discovering and publishing your Bitcoin transactions, but in most cases, users keep their identity secret.
5) No external interventions
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One of the biggest advantages of Bitcoin is that it removes third-party interruptions. This means that governments, banks and other financial intermediaries have no authority at all to disrupt user transactions or freeze a Bitcoin account. As already mentioned, Bitcoin is based solely on the peer to peer system. Therefore, Bitcoin users enjoy more freedom when shopping with Bitcoins than they use conventional national currencies.
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Digital currencies like Bitcoin are relatively new and have not yet undergone major tests. As a result, many believe that there are certain risks associated with the use of Bitcoin. Despite the potential shortcomings of Bitcoin, it is obvious that its merits are strong enough to make it a legitimate candidate to challenge conventional currencies in the not-so-distant future.