Most people have heard of the term Bitcoin but have no clear idea what it is. Simply put, Bitcoin is a decentralized, peer to peer, digital currency system, designed to give online users the ability to process transactions through a digital unit of exchange known as Bitcoins. In other words, it’s a virtual currency.
The Bitcoin system was created in 2009 by an undisclosed programmer (s). Since then, Bitcoin has gained a lot of 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 to a shared program is used to make transactions and process Bitcoin payments. The creation of Bitcoins is based on more complex mathematical algorithms and its purchase is made using the standard national currency. Bitcoin users can access their coins using their smart phones or computers.
As a new and growing virtual currency, Bitcoin has specific advantages over traditional government flat currencies. Here are 5 benefits you can enjoy when using Bitcoin
1) No Taxes
If you buy through dollars, euros or any other government flat currency, you will have to pay an additional amount of government money as tax. Each purchased item has its own designated tax rate. However, if you buy via Bitcoin, sales taxes are not added to your purchase. It is considered a legal form of tax avoidance and one of the major advantages of being a Bitcoin user.
With zero tax fees, Bitcoin can be used primarily to purchase luxury items exclusively in foreign lands. Such things are, more often than not, heavily taxed by the government.
2) Flexible Online Payment
Bitcoin is an online payment system and like any system, Bitcoin users have the luxury of paying for their coins from any corner of the world with an internet connection. This means you can lie down in your bed and buy coins instead of having to struggle to travel to a particular bank or store to get your work done.
In addition, paying online via Bitcoin does not require you to fill in details about your personal information. Therefore, Bitcoin processing of Bitcoin transactions is simpler than what is done through US Bank accounts and credit cards.
3) Minimum Transaction Fee
Exchange fees and costs for a part and parcel of standard wire transfers and international purchases. Bitcoin is not monitored or moderated by any intermediary institution or government agency. Therefore, transaction costs are kept very low unlike international transactions made through conventional currencies.
In addition to this, Bitcoin transactions are not known to be time-wasting because they do not include the complications of common authorization requirements and waiting times.
4) Hidden User Identity
All Bitcoin transactions are discrete, or in other words Bitcoin gives you the option of User anonymity. Bitcoins are similar to purchased currencies only in the sense that your transactions can no longer be traced back to you and these purchases are never connected to your personal identity. In fact, the Bitcoin address generated for user purchases is not the same for two different transactions.
If you prefer, you have the option to voluntarily disclose and publish your Bitcoin transactions but in most cases users hide their identities.
5) No outside intervention
One of the biggest advantages of Bitcoin is that it eliminates third party interruptions. This means that governments, banks and other financial intermediaries have no authority whatsoever to disrupt user transactions or freeze a Bitcoin account. As mentioned earlier, Bitcoin is strictly based on a peer to peer system. Therefore, Bitcoin users enjoy greater freedom when making purchases with Bitcoins than they do using conventional national currencies.
Digital currencies like Bitcoin are relatively new and have yet to be put to major tests. As a result, many feel that there are some risks associated with using Bitcoin. Regardless of the potential disadvantages of Bitcoin, it is clear that its merits are strong enough to make it a legitimate competitor to challenge conventional currencies in the not too distant future.