What is a Bitcoin?
Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence. Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can’t force a change in the Bitcoin protocol because all users are free to choose what software and version they use.
How does it work…?
From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive Bitcoins with them. This is how Bitcoin works for most users.Behind the scenes, the Bitcoin network is sharing a public ledger called the “block chain”.This ledger contains every transaction ever processed, allowing a user’s computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending Bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in Bitcoins for this service. This is often called “mining”.
Why the world needs Bitcoin?
Payment freedom – It gives an absolute freedom to send or receive money any where in the world in just minutes. Nothing to worry about holidays or borders and no imposed limitations. Bitcoin gives you an absolute grip on your own money.
Very low fees – Bitcoin payments are currently processed either by no fees or extremely small fee. Users have option to include fee in transactions to receive additional properties,which helps in fast and confirmed transactions by the network. More over, merchant processors exist there to assist in processing transactions and converting Bitcoins into fiat currency and depositing them directly into merchants bank account daily. As these services are offered for much lower fees than paypal or credit card networks.
Fewer risks for merchants – Bitcoins transactions are absolutely secure, irreversible, and do not contain any of the personal or important information of customers. Thus it prevent merchants to become prey of frauds or fraudulent charge back, and the is no need for PCI compilation. By this way merchants can explore new markets where either credit cards service is not available or fraud rates are exceptionally much higher. As a result fees are lower, market is large, and administrative costs are much lower.
Security and control – Bitcoins users have full control on their transactions, Its impossible to impose unwanted charges which is quite common in banking via fiat currency. Bitcoin payment can be made with out adding your personal information with it. This gives an extreme power to the user from theft. Bitcoins can also be protected with the help of backup and encryption.
Transparent and neutral- All the information concerning Bitcoin money itself is readily on the block chain every user to verify and use in real time. No one in person or organization can manipulate the Bitcoin protocol as it is cryptographically secure. This gives a boost to Bitcoin to be trusted for being completely neutral, transparent and predictable.