Most people have heard of the term bitcoin, but have no idea what it is. Simply put, Bitcoin is a decentralized peer-to-peer digital currency system designed to enable online users to process transactions through a digital unit of exchange called Bitcoin. In other words, it is a virtual currency.
The Bitcoin system was created in 2009 by an undisclosed programmer. Since then, Bitcoin has attracted a lot of attention and controversy as an alternative to the dollar, euro and commodity currencies such as gold and silver.
A dedicated network of computers connected by a shared program is used to conduct transactions and process payments in Bitcoin. The creation of Bitcoin is based on increasingly sophisticated mathematical algorithms, and its purchases are made in standard national currencies. Bitcoin users can access their coins through their smartphones or computers.
As an emerging and evolving virtual currency, Bitcoin has certain distinct advantages over the traditional government unified currency.Here are 5 benefits you will enjoy when using Bitcoin
1) No tax
When you make a purchase in USD, EUR or any other government fixed currency, you must pay an additional tax to the government. Each purchasable item has its own designated tax rate. However, when you make a purchase through Bitcoin, sales tax is not added to your purchase. This is seen as a legitimate form of tax evasion and one of the main advantages for Bitcoin users.
With zero taxation, Bitcoin can come in handy, especially when buying luxury items that are exclusive to foreign countries. Such items are often heavily taxed by the government.
2) Flexible online payment
Bitcoin is an online payment system, just like any other such system, users of Bitcoin can pay their coins from any corner of the world with an internet connection. This means you can buy coins while lying in bed instead of going to a specific bank or store to get work done.
Additionally, online payments via Bitcoin do not require you to fill in details about your personal information. Therefore, Bitcoin processing Bitcoin transactions is much simpler than transactions made through U.S. bank accounts and credit cards.
3) Minimum transaction fee
Fees and exchange costs are an important part of standard wire transfers and international purchases. Bitcoin is not monitored or regulated by any intermediary or government agency. Therefore, unlike international transactions through traditional currencies, transaction costs are kept very low.
Apart from that, Bitcoin transactions are known to be not time-consuming as it does not involve the complexities of typical authorization requirements and waiting periods.
4) Hide user identity
All Bitcoin transactions are discrete, or in other words, Bitcoin gives you the option of user anonymity. Bitcoin is similar to cash-only purchases in that your transactions can never be traced to you, and those purchases are never tied to your personal identity. In fact, the Bitcoin address created for a user’s purchase will never be the same for two different transactions.
You can choose to voluntarily disclose and publish your Bitcoin transactions if you wish, but in most cases users will keep their identities private.
5) No external intervention
One of Bitcoin’s greatest strengths is that it eliminates third-party interference. This means that governments, banks and other financial intermediaries have no right to disrupt user transactions or freeze bitcoin accounts. As mentioned earlier, Bitcoin is strictly based on a peer-to-peer system. Therefore, Bitcoin users enjoy greater freedom when shopping with Bitcoin compared to using traditional national currencies.
Digital currencies such as Bitcoin are relatively new and have not been significantly tested. Therefore, many people believe that there are certain risks in using Bitcoin. Regardless of Bitcoin’s potential disadvantages, it’s clear that its advantages are enough to make it a legitimate contender to challenge traditional currencies in the near future.