Bitcoin—the Digital Asset: But What Is It?

Posted May 21, 2022 by in Lifestyle
Crop of hand holding a gold Bitcoin in front of a desktop computer showing a stock graph

There is nothing much to the history of Bitcoin Use apart from in 2008 a was brought, and a single white paper with the name Bitcoin: A Peer-to-Peer Electronic Cash System got uploaded on the domain. This paper talked about, in theory, the practice of a digital currency which is free from any governmental or organizational control. 

What is Bitcoin all about?

The writer of this paper goes by the name Satoshi Nakamoto and also talked about how the entire value of fiat currency depends on the central bank and government and our faith and trust in these systems. Following this paper, the software of the Bitcoin network was introduced on 9 January 2009. If you stack and hold your Bitcoins, studies have shown that you can get at least 5-7% return from it. 

Can Bitcoin be converted into fiat currency?

The main purpose of introducing Bitcoins was to provide an alternative to fiat currency which is away from any organizational control. As it is a digital currency, it works mostly in the virtual world, and with high-speed internet and technology, you can mine a few Bitcoins for yourself.

As of current, you can also convert your Bitcoin into fiat currency or your fiat currency to Bitcoin through any trustworthy cryptocurrency exchange platform. One can use Bitcoins in a similar way to fiat currency,

Advantages or benefits of using Bitcoins

1. Transactions are peer-to-peer

It is noteworthy to mention here that every transaction of Bitcoin is a peer-to-peer, meaning you can send money to anyone on the network and receive money from anyone on the network. This demands the use of a safe and secure platform, for the transaction, so you do not lose any precious Bitcoin. 

In most cases, the transaction does not require approval from any third-party source, which can be a bonus. Apart from this, Bitcoin transactions are also pseudonymous. This implies that they are only partly anonymous and can be tracked through Blockchain addresses. But there is one other part of this. One account can have multiple addresses, passwords and usernames.

2. No or minimum banking fee

Another advantage of using Bitcoin is that it allows transfers on a national level with no banking fees, while the sometimes very minimum fee is incurred on international transfers. 

Another example would be when we transfer money internationally, we need to pay a hefty sum of money to the banks for the transfer, but with Bitcoin or cryptocurrency, this amount is either reduced to none or a minimum. Also, the transfer of Bitcoins is much faster and easier as no authentication is required. You can use the simple crypto trading bots to deal with Bitcoins. 

3. Bitcoins are secure, accessible and mobile

Theoretically, Bitcoins are hard to lose to theft as much as fiat currency. Bitcoins are a digital currency, so the chances of theft are minimum or low. Although we do have occasional hacking and loss of cryptocurrency, to a comparative degree, Bitcoins are quite safe and secure from fiat currency. You can simply arrange to go for Daytrade watching of Bitcoins, to know about how they perform. 

The best part is no personal information is required when you are doing the transactions through Bitcoins. Also, unlike traditional fiat currency, you do not have to visit the bank or any organization when you are doing the transaction only through Bitcoin or any other currency, as it does not require authorization or approval.

The most amazing part of a Bitcoin transaction is it is tax-free. Bitcoin is a decentralized system, so one can never implement proper taxation on the Bitcoin exchange. All the Bitcoin transactions are peer to peer, and hence unless someone voluntarily gives a certain percentage of Bitcoin money as tax, it is a near-impossible tax to introduce a tax system in Bitcoin transactions. 

The Bitcoin algorithm is based on the SHA-256 algorithm, which was introduced by the US National Security Agency. In simple terms, it is near impossible to break this code. Although there have been incidents of Bitcoin data being stolen from organizations, keep in mind this was not a break of the Bitcoin algorithm but the organization holding the Bitcoin information of customers.