Due to the unique nature of virtual currencies, there are some advantages in dealing with Bitcoin, which users of other currencies cannot get. Digital currencies are a relatively new and untested exchange tool and users need to be careful in measuring their benefits and risks. Nevertheless, Bitcoin seems to offer some unique possibilities.
What is Bitcoin?
Bitcoin is a decentralized, peer-to-peer, ins cryptocurrency system designed to allow online users to process transactions through digital currency units called Bitcoin. Launched in 2009 by a mysterious programmer, Bitcoin created great interest and controversy as an alternative to state flat currencies such as US and US dollar or euro or gold or silver coins as well as pure commodity currencies as a currency type.
Bitcoin payments are made over a private computer network connected to a shared program. Each process is saved to a “block chain” on every computer that updates and informs all accounts at the same time.
User Anonymity and Privacy
Bitcoin purchases discrete. If a user does not publish Bitcoin transactions voluntarily, their purchases are never associated with their personal identity, such as purchases with cash only, and cannot be withdrawn. In fact, the anonymous Bitcoin address generated for user purchases varies in each process.
No Third Party Deductions
One of the other benefits of Bitcoin is that governments, banks and other financial intermediaries are not allowed to halt user transactions or to freeze their Bitcoin accounts. The system is completely peer-to-peer; users have more degrees of freedom than national currencies.
Purchases Not Taxed
One of the biggest advantages of Bitcoin is that sales taxes are not included in any purchase, since third parties are not able to identify, track or stop operations specified in Bitcoins.
Very Low Transaction Fees
Standard bank transfers and foreign purchases usually include costs and exchange costs. The transaction costs are kept very low since there is no brokerage or government participation in bitcoin transactions. This can be a great advantage for travelers. In addition, any transfer in Bitcoins takes place very quickly and eliminates the inconvenience of typical authorization requirements and waiting times.
As with many online payment systems, Bitcoin users can also pay their money anywhere with Internet access. This means that buyers never need to go to a bank or store to buy a product. However, unlike online payments made with US bank accounts or credit cards, personal information is not required to complete any action.
- There is no time limit for the person who wants to perform a bitcoin transfer, he can transfer at any point from the internet via online wallets at any time. Thus, time is very important for today’s world. For example, EFT / SWIFT , one of the traditional payment systems, cannot be sent out during working hours.
- In traditional systems, money is sent to the bank or ATM to send or receive money (except via internet). For example, in transfer systems such as mail order and Western Union, the transfer of the person to such centers must be carried out. If to perform Bitcoin transfer; there is no need for a person to go physically and to be there.
- Transfers are very fast. It responds to natural human weaknesses such as impatience and money transfers are very fast.
- It is very easy to store and carry. You can carry thousands of dollars worth of Bitcoin with a virtual wallet that you can download to your smartphone.
- It is not affected by the economic or socio-political situation of the countries. It is not subject to the intervention or pressure of the central bank of any country; therefore it is not affected by the economic or socio-political upsurge of the countries.
- There are no lower limits on payments. In Bitcoin, even very low amounts of payments cannot be made with payment systems such as credit cards or wire transfers. Because in traditional payment systems there is always a lower limit.
- Fees and commissions are not applicable. In Bitcoin, transfers take place directly from one address to another without networks, without central authority. Therefore, there are no fees or commissions received in traditional transfers.
- It eliminates transaction costs related to payments of companies. There are many charges for the companies that make e-commerce and therefore receive credit card payments, such as authorization, commission, security, transaction and account fees applied by banks. It is foreseen that the companies will use this bitcoin to reduce the costs.