“What is bitcoins?” that is a commonly asked question these days. The name itself defines it – the digital currency made available by bitcoins. A quick search on the net shows that many people are starting to learn more about this interesting but revolutionary form of money transfer. There are a lot of advantages that come with using this type of payment system.
Before we get into its details, it would be good if we first explain how it works. It is a digital form of currency that was created out of computer technology. Bitcoins has no physical commodity, such as gold or silver, that can be easily substituted. It cannot be destroyed like a common coin.
Transactions are usually done between individuals through the use of computers. The software used for doing so is called the “bitcoins”. It is created in the form of a password that is only accessible by the owner of the “bitcoins”. This is done to ensure that unauthorized access to the password would be impossible. In order for a payment to be processed, one needs to have a verified account. This verification process is called “proof of address”.
This type of payment is available for anyone from anywhere in the world. Transactions are generally free of charge and are usually much faster than traditional means of payments. There is no need to use bank transfers or other financial institutions. There is also no need for one to hold a physical asset in order to be able to purchase something online.
In some places around the world, there may be a minimal service charge or a transaction fee depending on the country’s requirements. In other countries, one may just have to pay a handling fee which is also not much. In fact, the fees are usually lower than those of credit cards. One can also receive multiple transactions from different locations around the world which is otherwise impossible to do with conventional money transfer services.
Many developers have come up with different ways of using the network. One method is called “peer to peer lending” which allows one to make use of his computer to accept and send payments. There are no risks involved, since there is no investment. However, it does not provide global access. It is also limited to a small number of computers at a time.
The second option is “miner centralization”. This is done by pooling the work out in the form of high quality hardware. This is similar to how a bank makes transactions with large amounts of cash. This would allow for better security as the risk of hacking is greatly reduced.
One final way to use this technology is called “decentralized exchanger”. This would allow users to trade currency by buying or selling from any part of the world. This works around the world without needing to have physical addresses in every place that one travels to. This is perhaps the best use of the global network. This would also enable one to have access to the entire market without much effort. Even though this is possible now, it is still in its early days and there are many more improvements that would make it even easier to go around the world and make payments in the most convenient way possible.
This brings us to “Bitcoin ATMs“. With these ATM machines one can exchange money even while traveling. These ATM’s have locations almost anywhere in the world. They can offer the best rates on the most widely used financial exchanges. This would include places like New York, Tokyo, and other major financial centers.
Finally, there is the use of online wallets. They can be used by anyone around the world for the purpose of making payments. A variety of providers support this service. Some focus on storing one’s money on their own server, while others use external services. Either way, the owner can use their own login information to make purchases.
These are just a few ways in which people use this technology today. It has come a long way since it first became popular. As a result, competition has grown among providers to offer better deals and more security to consumers. Fees are still being seen as a good way to keep costs down. As more people learn about it, adoption will likely grow. In fact, in many areas already, it is becoming the standard form of payment.