We have come far in the world of technology and have reached a new level. Financial world is no exception to this. Our monetary field is coupled with unheard terms, unfamiliar currencies, odd policies and many alien things. When technology upgrades our monetary field, we must get acquainted with it.
We spend money, we exchange money worldwide. But do you know which currency has become the buzzword?
“Bitcoin” is the latest currency fetching attention. It is in the headlines, among media, on internet and everywhere. Is this crypto- currency real or fiction? Is it a ponzi scheme or truthful proposal?
Quench your thirst with our Top 15 things you should know about Bitcoins!
15. Who created what?
It is primary to know what exactly a Bitcoin is. “Bitcoin” is a digitized form of currency, a currency without notes/coins.
Satoshi Nakamoto is the mastermind behind this and said to be residing in Japan but having a mail ID from Germany; his existence is a mystery. People take his name as intermingle of famed Japanese companies- SAmsung TOSHIba NAKAmichi MOTOrola.
Having developed Bitcoins in 2009, he vanished into thin air in 2010.
14. Number of Bitcoins is inflexible
Since it is a currency, it must be endless in number? Also, there are neither physical bills nor minting of coins, it has to be immeasurable? Well, no!! Having countless number of Bitcoins would devalue the currency. There is instead a hard limit for its numbers. There are 20999999.9769 BTC. The difference of 3 BTC is trivial. So, they are 21 million in counting.
13. Bitcoins have no intrinsic value
The dollar or rupee note marked as $100 or Rs. 100 has a known value. But is it the same with Bitcoin? It is an undecided question. Some say it has an inherent value when used outside as medium of exchange. Opponents say that value is determined by supply and demand. If Bitcoins fetch demand and become a mainstay, its value will escalate. The economy and novelty may even drop its value. Bitcoin is much volatile.
12. Buying with Bitcoins is possible
Bitcoins may appear to be vague, absurd and imaginary. But it is a real currency used to purchase things. Many sellers nod to this currency. Renowned companies who now accept Bitcoins are Dell, Wikipedia, Expedia, Microsoft and thousands more. Even many eatery joints like Subway, jewelry points and inns consent this payment option.
11. Pay petty or zilch fees to send money
Let us think you are in Berlin and you need to be sending money to somebody in Paris. Through usual bank transfers you would have to pay bank fee, currency conversion fees and lots more to be added. Moreover, it will cost you in terms of time, too. But with Bitcoins, there is insignificant or even no fees needed to pay. Also, the money is accessible almost instantly!
10. Transparency in transactions
The specialty of Bitcoin is that it gives crystal clear information of transactions. It is immensely translucent as far as amounts and dealings are concerned. Every transaction done is a see-through event on the block chain. This unique feature lodges trust and security among the users. So if you have a Bitcoin address you can see the balance anytime.
9. Reversing a transaction is not happening
Another chief attribute of Bitcoins is that you can neither be strained to pay nor can you annul a transaction. For e.g. if you sent some Bitcoins for a product, you are disallowed to revoke that transaction. Only refunding by the person getting the coins is possible.
It is capable of detecting typos and usually prevents you from sending money to an invalid address. But since Bitcoin payments are irretrievable, so deal carefully!
8. Unverified transactions are unsheltered
Transactions are not irreversible from its beginning. Each transaction made on Bitcoins, gets a verification score which determines how hard it is to revoke the dealing. The verification time ranges from a couple of seconds to 90 minutes, 10 minutes being the ordinary time. Much low paid fee or other nonconforming things can delay the confirmation. An unconfirmed transaction means it is not a secured one!
7. Anonymity of personal details
Only transactions are revealed in Bitcoin and not the person behind them. While using other payment options furnishing your personal niceties is a must. But Bitcoin defies this concept. Unless you voluntarily disclose your information, nobody can trace you. With Bitcoin, you are free from the hassle of giving in the mandatory info like name, address, email, phone number, etc.
6. You can mine Bitcoins
Wondering how to acquire Bitcoins? The usual mode is minting them by using a special software under the name of Bitcoin Miner that tries to locate a new block in the chain of Bitcoin network. Whenever a new block is hit upon, the owner is gifted with 50 Bitcoins. Technically, a computer has to perform lengthy, jumbled and stern calculations to discover a new block.
5. It is taxable!
This being another ground of debate argues that it is an aid in tax evasion. But the cohorts of Bitcoin contest that all the transactions are taxed properly. You are obligated to pay tax of all sorts on Bitcoins. From income tax to sales tax, from payroll to capital gains taxes, it is all taxable. In short, anything that has monetary worth is to be put on tax.
4. Bitcoins are stored in digital wallets!
Have you seen your bank balance online? That is the same way your Bitcoin wallet looks like. You store it in your computer, sign up at the website and have it all in front of you. The website where you keep your digitized wallet manages and secures it very well. So digital wallet is the place for our Bitcoins.
3. Wallet gone! Bitcoins Gone!
Once you lose the digital wallet, your Bitcoins are also lost. Forever! Yes, there might be Bitcoins in the wallet as they were kept as a note on the block chain but you will never be able to spend them. It is simply like your wallet being robbed and you being able to do nothing with the money in it. Bitcoins have unique keys attached so if lost with a wallet, then they are detached from circulation everlastingly.
2. It is not controlled by a single entity
We have banks as common controllers of money and currency. Our money sees rise and fall in its value at the direction of banks with respect to the global market. But Bitcoin flouts this general concept of being controlled by banks. Strange as it sounds true it is. It is not managed by one entity but by everyone. Yes, all the users of Bitcoin across the world are in the charge of controlling it.
1. It is still a tentative idea
Bitcoin is still in its novel and experimental stage of life. It is like a see-saw currently. It has both challenges and innovations. There are developments that trigger the excitement but then there are hitches that make us to drive off. The foreseeable drawbacks are hike in fees, decelerated confirmations, timely issues or more rigorous obstructions. It holds a dicey future!
So will technology take up to new heights? It is to be seen in near future if Bitcoins will be a boon or bane! Be Diligent! Be Safe! It is your hard-earned money!