Most people have heard of the term Bitcoin, but have no clear idea what it really is. Simply defined, Bitcoin is a decentralized, peer-to-peer, digital currency system, designed to provide online users with the ability to process transactions through a digital exchange unit known as Bitcoins. In other words, it is a virtual currency.
The Bitcoin system was created in 2009 by an undiscovered developer. Since then, Bitcoin has attracted huge attention as well as controversy as an alternative to the US dollar, euros and commodity currencies such as gold and silver.
A private network of computers connected by a common program is used to perform transactions and process payments in Bitcoin. The creation of bitcoin is based on increasingly complex mathematical algorithms and their purchase is done with standard national currency currencies. Bitcoin users can access their coins from their smartphones or computers.
As a new virtual currency that is growing, Bitcoin has certain advantages over conventional state currencies. Here are 5 benefits you will enjoy when using Bitcoin
1) No taxation
When you buy over the dollar, the euro, or any other national currency, you have to pay the government an extra amount of money as taxes. Each item that can be purchased has its own specific tax rate. However, when you buy via Bitcoin, sales tax is not added to your purchase. This is considered a legal form of tax evasion and is one of the main advantages of Bitcoin users.
With zero tax rates, Bitcoin can be useful especially when buying luxury items that are exclusive to a foreign country. Such items, more often than not, are highly taxed by the government.
2) Flexible online payment
Bitcoin is an online payment system and like any other such system, Bitcoin users have the luxury of paying for their coins from any part of the world that has an internet connection. This means that you could lie on your bed and buy coins instead of suffering the pain of traveling to a particular bank or store to do your job.
Moreover, online payment via Bitcoin does not require you to fill in details about your personal data. Therefore, processing Bitcoin bitcoin transactions is much simpler than those done through bank accounts and credit cards in the US.
3) Minimum transaction fees
Replacement fees and charges are an integral part of standard bank transfers and international purchases. Bitcoin is not monitored or moderated by any intermediary institution or government agency. As a result, transaction costs are kept at a very low level as opposed to international transactions executed through conventional currencies.
In addition, it is not known that transactions in Bitcoin are time consuming because they do not involve the complications of typical authorization requirements and waiting periods.
4) Hidden user identity
All Bitcoin transactions are discrete, or in other words Bitcoin gives you the ability to anonymize users. Bitcoins are similar to cash-only purchases in the sense that your transactions can never be tracked back to you and that those purchases are never linked to your personal identity. In fact, the Bitcoin address created for user purchases is never the same for two different transactions.
If you want, you have the opportunity to voluntarily discover and publish your Bitcoin transactions, but in most cases, users keep their identity secret.
5) No external interventions
One of the biggest advantages of Bitcoin is that it eliminates interruptions by third parties. This means that governments, banks and other financial intermediaries have no authority to disrupt user transactions or freeze a Bitcoin account. As already mentioned, Bitcoin is based strictly on the peer to peer system. Therefore, Bitcoin users enjoy more freedom when buying bitcoins than when using conventional national currencies.
Digital currencies such as Bitcoin are relatively new and have not yet passed major tests. As a result, many believe that there are certain risks associated with using Bitcoin. Despite the potential shortcomings of Bitcoin, it is evident that its merits are strong enough to make it a legitimate candidate to oppose conventional currencies in the not so distant future.