Bitcoin is a form of digital currency that’s electronically created and held. There’s not a single person, government body or organization that has the power to control it. Bitcoin isn’t printed like traditional currency such as dollars and euros. This virtual currency is produced by people. One of the primary differences between bitcoin and other traditional forms of currency is that bitcoin can be used to buy goods and services electronically. In this regard, it functions in a similar manner as conventional currencies like dollars, euros and yen which can also be electronically traded.
However, one thing that really sets bitcoin apart from all other forms of currencies is that it’s decentralized, unlike traditional currencies. You won’t find any institution in the world that controls and manipulates the bitcoin network. This puts a lot of investors at ease because they can rest assured that their assets won’t get influenced by a large bank or any other financial institution. Coinbox however facilitates easy exchange of bitcoin online.
Satoshi Nakamoto, a software developer, is a man behind this revolutionary digital currency. He created bitcoin with the goal of using it as an electronic payment based on mathematical proof. Satoshi wanted to create a virtual currency that can be transferred electronically, works independently from a central authority, and has low transaction fees.
Most other forms of traditional currency are primarily based on gold or silver. Theoretically, a person who gives a dollar to a bank receives gold in return even though this isn’t practically the case in the real world. Bitcoin isn’t influenced in any way by gold or silver. The entire network is purely based on mathematical concepts.
In all corners of the globe, people use different software programs that follow mathematical formula that creates bitcoins. The formula is available to the public, allowing anyone to access it freely. The software is also open source, which means that anyone can look at the codes to ensure that the program does what it’s supposed to do.
There are numerous characteristics that distinguish bitcoin from other currency forms. Firstly, the bitcoin network is decentralized. There’s no central authority that controls it, unlike traditional currencies which are controlled by the central bank. Every single machine that handles bitcoin transactions belongs to the entire network, and all of them work in a cohesive manner. This ensures that that no central authority can interfere with the system and manipulate monetary policies that can possibly lead to a meltdown.
It’s also very easy and convenient to get started with bitcoin. As you may very well know, simply opening a bank account entails a lot of paperwork and different banks look for different requirements. Setting up a merchant account is another problem altogether, requiring you to undergo a tedious process for such a simple task. But with bitcoin, you can set up your account within just a few seconds, eliminating the need to answer multiple questions and on top of all this, you don’t need to shell out any money.
Another essential feature of bitcoin is that it’s completely anonymous and transparent. One user can manage multiple bitcoin addresses, and these cannot be in any way associated to physical addresses, names or any kind of personal information that may be used to identify the holder. Every transaction done using bitcoins are detailed in a ledger referred to as the blockchain. Due to this, there’s no way for a user to hide his or her transactions because everything can be seen in the ledger.