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What is Bitcoin?
Bitcoin is talk of town these days. To cut through some of the confusion encompassing bitcoin, in simple words, Bitcoin is a cryptocurrency or a digital currency that uses cryptography for regulation and generation of units of currency. No single institution or person controls it meaning it is decentralized. Since Bitcoin was the first cryptocurrency, all digital currency created thereafter are called Altcoin or Alternative Coins.
How is Bitcoin different from traditional currency?
Bitcoin is entirely virtual currency. It doesn’t need any bank to store money. There are various reasons why it secludes itself from traditional currency, some are stated below:
- Decentralized– The most important characteristics of a bitcoin is that it is entirely decentralized. No single institution or person can manipulate or control it. It is run by a group of volunteer coders on an open network. Bitcoin makes it easy for small players to make a move as no one can corner them in the market. They have the freedom to act at their will.
- Limited supply– The supply is tightly controlled by the underlying algorithm. Only a small amount of bitcoin are realized every hour till they reach 21 million. This makes bitcoin more amusing as the supply remains constant but demand keeps on increasing, thus the value also increases.
- Pseudonymity- Since there is no validator, the users can operate in semi anonymity. They don’t have to identify themselves when sending bitcoins to someone else. The system does not need to know your identity.
- Non- Repudiable– Once you send Bitcoin to someone, there is no way of getting it back unless the recipient wants to send them back. This ensures safety as no one can claim that they never got the money.
What are the benefits of Bitcoin?
- Freedom of payment- It is possible to send and receive bitcoins anywhere in the world. There are no problems like bank holidays, or any such event. You are in possession of your money, there is no central authority in Bitcoin network.
- High portability- One of the distinct feature of Bitcoins are that they are easy to carry and use. Since Bitcoin is entirely digital it is very easy to carry any sum of money on a flash drive or stored online. Unlike hard cash which is risky to carry and there is always a chance of theft.
- Safety and control- Allowing users to take control of their transactions helps you keep bitcoin safe. It is impossible for merchants to force unwanted charges without being noticed. Bitcoin payments can be made without personal information being attached with the transaction. This also offers as a strong protection against identity theft.
- Lower fees-There are usually no fees charged for any transaction or payment as bitcoin is compensated by the network with newly issued bitcoin. And in case there is a fees charged then it is of a very minimal cost unlike other mode of payments.
There you have it folks. In a short time, bitcoin have captured the market and attention of financial speculators. With time we will know whether bitcoin is the money of new era. Now for those who are keen to start trading then come choose the best from the market and develop your skills as a trader with our guidance and tools. Open your trading account and check out Red Star Forex www.redstarfx.com.