Bitcoin is a digital form of making payments and falls into the category of ‘cryptocurrency’. It has been practised at several countries where some nations have banned it. The main reason behind its growing importance is that it is too cost effective as all the transactions are done through a peer-to-peer platform.
Satoshi Nakamoto, a software developer, introduced the concept of Bitcoin after doing marathon research into cryptography. He also framed the algorithm but his real identity is still a mystery for the world.
The currency is mostly used in online trade that eventually becomes a product. However, a tangible commodity, for instance, gold or silver, does not back it up. Anyone can access this currency as it has become an open-source product and you need only these things to avail it:
- Email ID
- Internet connectivity
- Most importantly, Money
Despite banned in many nations, Bitcoin Market is still flourishing in some places. China and Japan are particularly the best examples and in fact, they have used mostly than any other country in Asia. Although, these countries too want to hold back the usage of this cryptocurrency and as a consequence, its value has been reduced significantly.
How does the currency work?
People transfer digital assets through the internet, but not through the online bank. They buy the currency through cash or selling the product or service for it. So now the next question arises where the currency stores? The users keep the currency at the Bitcoin wallet and from where they make a purchase or sell. However, they have the choice of selling out their virtual ledger through trade with another Bitcoin user, who wants it from you. This practice is applicable all over the world. To make it more precise, let’s take an example of the online lending where the borrower applies for loans only through online and get the transfer on the same platform. In such a process, it makes easier for the borrowers to opt for the options like loans without guarantor or collateral, and thus, less costly.
In the last few years, the currency has gained maximum presence into the Smartphone world, as several apps have been introduced to do the mobile Bitcoin transactions and exchanges.
Know How is Bitcoin valued?
No financial institution has the authority on Bitcoin currency because it is entirely decentralised. Government and banks generally cannot devalue the currency, as it happened with other currencies all over the world.
The actual value is determined according to the level of acceptance among the two parties in the form of payment. As its supply is limited, the real value is largely depended upon the global currency values. The more Bitcoin wallets created by the users, the more businesses take hold of it to transfer or exchange the currency. Automatically, as more businesses accept Bitcoin, the more its value will increase. For the last few years, it has been found that the banks are making efforts to value the Bitcoin but they have different come outs according to their research.
Advantages for a Business
If accepted as the payment option, many businesses can use Bitcoin to their favour as they get following advantages:
Transactions are done instantly: This is the biggest benefit of this currency where transactions are done through the internet and users can exchange on a fast basis. All can be completed within a single day.
Less fee transaction: In comparison to the credit cards, Bitcoin conceives less fee transaction because there is no broker required and everything can be processed only through online.
Looks More Secured: Bitcoin seems more secure than any other currency. If we take apart the hacking issue, the transaction is completely between the two real users. The currency clearly eliminates fraud risk.
There will be many other reasons to use Bitcoin for your business but since this currency is not centralised, it may look risky for you. And, you never know when the government will plan to hold it back.
Author Bio:-Ellawatson is a financial blogger she has done a research on the businesses technicalities. She suggest the readers to avail loans without guarantor whenever dealt in financial crisis in the progress of business.
Description: Bitcoin may have been restricted in many places but from time to time, it has gained importance among the businesses. However, it has pros and cons but what matter is its true use. Businesses should not use it for fraud purposes, as only the right purposes can make it more worthy.