This is a new currency that begins to hit the digital mainstream.
But not all people know or even understand much with Bitcoin and why they have to make use of it.
The first question is, why use this currency? If you don’t have any idea with the answer, consider yourself reading so that you will be enlightened with the pros and cons of using Bitcoin.
Advantages of Bitcoin
It is amazingly fast
Normally, when you pay cheque, the bank holds the money for days for common reason “they need to check if funds are there”. This system applies to all even on international transfer.
It can even take long time, but for Bitcoin, this one is amazingly faster, “it can be in seconds“. To be frank, transactions are instant for “zero-confirmation” transfer transactions, this mean that merchant takes the risk accepting transaction that has not been confirmed yet by “bitcoin or blockchain”.
Or some can take up to 10 minutes if the merchant requires transaction confirmation. In other words, this system is faster than your normal inter-bank money transfers.
Lower transaction fees
I can sense your question, “transactions on credit cards are instant too”. Well, you are 100% correct, but take a look at the fees for the privilege that you have.
Some even charge fees at double, or some includes “swipe fee”. Transactions done in Bitcoin are surely minimal, and there are even cases that it’s totally free in all transactions.
Funds cannot be taken by Government
March 2013 Cyprus, are you familiar with this? The Central bank want to take back all uninsured deposits that is larger than $100,000 in order to recapitalize the country, causing unrest in the population.
They want to get savings below the figure, eating directly all the family savings.
These can never happen with Bitcoin, why? Because Bitcoin is a decentralized currency, you own it. Meaning no certain authority can control and even bank can’t take it away from you.
Bitcoin has no chargeback
Once Bitcoins have been sent, they’re gone. A person who has sent bitcoins cannot try to retrieve them without the recipient’s consent.
This makes it difficult to commit the kind of fraud that we often see with credit cards, in which people make a purchase and then contact the credit card company to make a chargeback, effectively reversing the transaction.
Secure Payment Information
Most purchases made online are done thru credit cards, but in the earlier days when credit card first appeared, internet has not yet conceived. Credit cards should not be used online since it becomes insecure.
Forms online requires every credit card user to enter needed information like card number, CSV number and expiry date. So it is hard to think of less secure way transaction in online business. This is also the main reason why most credit card numbers are stolen frequently.
With transaction via Bitcoin, this won’t require any information from you. But instead, the system uses a two key security, “Public key and Private key”. Your Bitcoin address is the public key, but your private key is secret.
So when you do transaction and send funds, owner then authorized the transaction by combining both public and private keys, and then applying mathematical function. With this process it creates a unique certificate that proves it is you doing the transaction.
As long as you don’t do any silly things online, like publishing your keys, you are safe.
Bitcoin is not inflationary
This is a common problem with regular flat currency, government can do or print as they want, and honestly they are doing this one frequently.
If US dollars are not enough to pay its debt, Federal Reserve simply prints money, the government inject the new money in the economy, this technique is known as the “quantitative easing”. This decreases the currency value.
The concept is simple, if you double the dollar. This means that it is still equivalent to one. All will be affected, when a company sells milk for 1 dollar, it will be doubled but the same worth as the last, because the value of dollar has decreased to half, and it also decreases the people power to buy.
But for Bitcoin, this is designed to have its maximum number of Bitcoins.
Only 21 million, this is based from its original specification. This means that after that figure, Bitcoin won’t grow anymore, so this means that inflation is not a problem, in fact a deflation, where prices of the services and goods in the market falls, this is common on Bitcoin world.
It is purely private
Oftentimes, people want to keep secret and don’t want share what they purchased. Bitcoin is somewhat a private currency. Thanks to blockchain, we know that bitcoin address can do transactions.
They know where transaction originates and sent. In other words, no certain individual has information about the owner of the Bitcoin address. However owner can be traced from whom you have business with oftentimes. People can identify that the bitcoin is from someone but don’t have the specific information on the owner.
No need to trust anyone
Banking system requires you to trust people who handle your hard earned money. In short, you have to trust your bank. Example, if you have a payment processor, you have to trust the merchant. Normally, this type of organization requires you to provide sensitive information.
Since Bitcoin is decentralized, you don’t have to trust anyone when you make use of it.
So when doing transaction, it is then signed digitally at a secure system. Unknown miner then verifies it and boom, transaction complete. No more information needed, unless you tell them.
No other digital cash system operating today in which an account is not owned by a certain individual.
Let us take PayPal as our example, the company decides the status of your account, and if they decides that your account was misused, they have the power to impose freeze of all your funds in that account, without any word from you.
As owner, you have to decide how to do the needed resolution in order for your account to be cleared so you can then access back your hard earned money.
Bitcoin is totally different from that situation, you own certain private key and public key that makes your Bitcoin address. No government or certain authority can take it away from you, not unless you forget or lose it or the wallet service loses it.
Power to create own money
With Bitcoin, producing your own money is remarkable. Everyone has the opportunity to do it. You can purchase Bitcoin on market, but the one I loved most is “mine it”. You read it right, there are many people doing this, for those who have the computing power.
By just investing on powerful equipment and electricity, Bitcoin is coming in your wallet by just leaving your machines running 24/7 with the right set-up and software running.
We are sure everyone loves to set up something that will make their computer work for them and earn money while away or at sleep.
Not much understanding on Bitcoin
Many people today are still unaware of Bitcoin and other digital currencies (this is fact). Information should be disseminated. Therefore, people should be educated about this currency for them to use it on their daily living.
Because of the advantages of Bitcoins, online business starts accepting this currency. But, there are only few of them doing it, not like the physical currencies.
Risk and Volatility
Bitcoin is unpredictable. This is due to the limited amount and demand that might increases at anytime. Bitcoin currencies bounces almost every day due to events related to currencies digitally.
Still on development
Bitcoin is still on its infancy stage, it has incomplete features that are still in development. To make digital currency even more secure, new security features and tools are being developed.
Bitcoin currency is just starting out, and needs to work out problems just like any other currency in its early stages.
That’s it, and know you know how amazing to use Bitcoin, with the information given, you have now the power to decide to use it or not. To tell you, it is not yet perfect. Honestly it does have number of advantages than physical currencies. However like any other things, it has its disadvantages.
This is due to the infancy stage of Bitcoin. People start to become aware with it, for this currency to succeed people should understand it.
Advantages and disadvantages are always there and even to any situations. In order to make perfect decision, weighing the good and the bad result should be analyzed before you finalize your official decision.
Look for information and understand it, and decide what you actually want with this currency. We share you the facts that we think best for all, but in the end of this, you are the one making the decision for your own good.
Table of Contents
- 1 Advantages of Bitcoin
- 2 Bitcoin Disadvantages