What is Bitcoin – An Introduction

Bitcoin LogoWhat is Bitcoin?

Bitcoin refers to a new currency created in the year 2009 by an anonymous party with the alias Satoshi Nakamoto.  Bitcoin transactions are executed without any middle men and as such no banks are required. Moreover, you don’t have to pay any transaction fees or offer your real name.  Millions of merchants all over the world today have started to accept Bitcoins since they can use them for purchasing pizza, web hosting services and even manicures.

As a form of electronic money, bitcoins are definitely independent of traditional banking systems.  Ever since these coins started circulating in the year 2009, they have grown to become one of the most prominent elements even rising above a couple of fledging currencies.  This virtual currency mainly relies on computer networks that help in solving complex problems as a means of keeping track of every bitcoin that is used in a transaction.  Unlike the case is for traditional currency where the central bank might limit the amount of money printed, there is no known authority which governs bitcoin supply today.

Why Make Use Of Bitcoins?

Bitcoins can be used to purchase lots of merchandise anonymously. In addition, it helps to ensure ease and effectiveness of international payments since bitcoins are never tied to any regulations or the laws of the land.  Many small businesses today prefer them since they do not incorporate credit card fees.  Some people are even opting to buy bitcoins as an investment with the hope that they might grow in value.

How to Acquire Bitcoins

When you want to acquire bitcoins, there are three main approaches which you can employ. You can either:
  • Buy on an exchange
  • Request transfers
  • Do bitcoin mining
A number of marketplaces which are referred to as bitcoin exchanges allow you to conveniently buy and sell bitcoins through the use of a myriad currencies.  Today, Mt. Gox is known to be the largest exchange for Bitcoins.  Secondly, bitcoins can be transferred from one person to another through the use of computers or mobile applications. This is similar to the aspect of sending money digitally. Last but not least, people also compete in bitcoin mining through the use of computers. This is the main means through which bitcoins are created.

How Volatile Are Bitcoins?

The dollar value of bitcoins has been rising exponentially over the past couple of years.  Many people are becoming aware of this type of currency and as such many speculators have also decided to jump into the ever volatile market.  That is why there have been growing concerns from many quarters that bitcoins might actually be susceptible to fraud than the case was a few years ago. To compound this issue as well, the prices of bitcoins in various exchanges vary widely.

Where Can You Use Your Bitcoins?

Proponents of this form of currency argue that bitcoins can be used in a wide range of elements. For instance, they are widely used by consumers all over the world for electronic transactions such as online shopping.  A number of online retailers and physical stores today allow for operations using this currency even though its adoption has not yet hit the climax.  Many critics argue that bitcoins are too volatile and as such they cannot be widely adopted. 
Author Bio:
Agency Fusion is an ad agency focused on the intersection of design and technology. They specialize in web design, web development, branding and software development.

Share your comment

%d bloggers like this: