EDUCBA

EDUCBA

MENUMENU
  • Explore
    • Lifetime Membership
    • All in One Bundles
    • Fresh Entries
    • Finance
    • Data Science
    • Programming and Dev
    • Excel
    • Marketing
    • HR
    • PDP
    • VFX and Design
    • Project Management
    • Exam Prep
    • All Courses
  • Blog
  • Enterprise
  • Free Courses
  • Login
Home Software Development Software Development Tutorials Software Development Basics Advantages of Bitcoin

Advantages of Bitcoin

Priyanka Banerjee
Article byPriyanka Banerjee
Priya Pedamkar
Reviewed byPriya Pedamkar

Updated March 23, 2023

Advantages of Bitcoin

Introduction to Advantages of Bitcoin

The following article provides an outline for Advantages of Bitcoin. Bitcoin is a kind of cryptocurrency (i.e., a virtually created currency) that allows peer-to-peer transactions. It was brought into existence in 2009 by Satoshi Nakamoto. The bitcoin aims to have control over the number of bitcoins generating and flowing, protecting the transactions and making the user’s identity anonymous.

Start Your Free Software Development Course

Web development, programming languages, Software testing & others

How does Bitcoin Works?

Given below shows the working of bitcoin:

  • The bitcoin uses public digital ledger creation to record and verify transactions in an encrypted manner.
  • This is done by generating complex computer algorithms that people mine in exchange for small bitcoin paid as fees.
  • There is verification on both ends of the validity and integrity of the receiver. Miners (algorithm creators and coders) who first verify this transaction get a small chunk as fees.
  • The updated transaction is spread across the entire blockchain network for future verification and added to the shared ledger.

Advantages of Bitcoin

Bitcoin has revolutionized the mode of payment in several ways, let’s look at the advantages one can benefit from:

  • The best feature of Bitcoin is that it is not under some centralized system like the government or banks. At un-stable times there is no fear of the money being seized or locked, which had happened in Greece where only the $67 per day limit of the transaction was limited by the government.
  • Bitcoin proves to be exceptionally useful in countries that have an unstable government or nationalized banks, due to to which there is ongoing or onset of hyperinflated economic crisis (E.g.: Venezuela or Poland). This causes prices to rise and fluctuate where bitcoin serves relatively fair rates of exchange.
  • Moreover, this also effectively reduces the transactional cost that is involved while making payments through a third party. Being a decentralized system where all the transactions are transparently done and controlled unanimously. Over time, there is constant appreciation and depreciation in the currency rate, which especially hampers the transaction fluctuation over boarding costs borne during cross-currency transactions.
  • Being encrypted having a Unique Identification for each and every cryptocurrency unit, there can be no counterfeiting of this currency, and it serves to be a more secure form of making monetary transactions. This also makes it difficult for people with malicious intentions who do not have the technical expertise to cause threats to the system.
  • As conventional money is made out of either paper or metal, it is contributing to the utilization of natural resources in its manufacturing process. Bitcoins are digitally signed and authenticated after digitally encrypting the transaction, which is sent by the blockchain or digital ledger. This way, only electronic data is being created, which is taking up space in the cloud network and not utilizing any raw material for making financial transactions. With the on growing pollution and degradation of the natural resources, they use Bitcoin to reduce the impact on the trees and Minerals, which are limited.
  • Compared to other modes of a transaction: its physical form of banking cards or debit cards, transactions made through Bitcoins prove to be much quicker. This proves to be essentially true for a higher amount of International transactions which involve a change in currency. As Bitcoins are limited in number and are not influenced by external factors such as the government’s stability.
  • A very important aspect that positively affects the users if they make purchases using bitcoin is that there are no taxable deductions made in terms of sales or service tax. Only a very small amount is credited to the “miners” as a fee for their role.
    Now making purchases through bitcoin has become really easy as large companies have started accepting it for payment. One of the prominent companies accepting bitcoins are:

    • Microsoft is for its Online X-Box Store.
    • Namecheap and Go Daddy – online domain name provider.
    • Overstock is for an online retailer that allows multiple cryptocurrencies.
    • Hotel chains such as Hilton and Marriott Bonvoy.
    • Walmart and Macy’s have bitcoin payment options available in both store locations and online mode.
    • Fashion and personal aesthetics brands like GAP and Sephora allow purchases through bitcoin.
  • Using bitcoin increases the ease of doing transactions. There is no necessity of identity verification and providing various personal details such as address proof, age proof, and other material facts related to the individual’s financial status. All one needs to do is download a digital wallet that aids bitcoin transaction (like Coinbase, Trezor or Robinhood) and make or receive payments. However, there is a possibility of this mode being utilized for the illicit transaction which is illegal or fraudulent in nature. But at the same time, with the numerous data breaches happening at a financial institution, you have a chance at protecting your personal data from being mishandled.
  • Vendors with unscrupulous intentions cannot cheat the other party by saying that the payments have not been made or received and the transactions made not only appear in all the blocks in the network but also are not changeable by anyone in the blockchain.
  • Similar to the stock market, bitcoin and other cryptocurrencies can be traded. People who had initially invested in bitcoins and later sold them have gained huge benefits from their financial decisions. Taking the example of the famous millionaire Mr Erik Fineman who had made an investment of USD $1000 at the age of 11 years, borrowed from his grandmother. At that time, the cost of 1 unit for $12 and by 2013, it rose to $1200 per unit, which made Erik’s fortune, giving him 1000 times return on his investment. Many famous believe investing in the cryptocurrency market is a very wise decision as it is in its initial stage, especially the other cryptocurrencies like Etherium.

Conclusion

It can be understood that both corporate and retail customers can reap numerous benefits by embracing cryptocurrencies like bitcoin that use blockchain technology to give safer, faster, and more convenient as an alternative to conventional fast money, which will give consumers the power and freedom to access and control their finances in their own hands.

Recommended Articles

This is a guide to the Advantages of Bitcoin. Here we discuss the introduction and working of bitcoin along with its advantages in detail. You may also look at the following articles to learn more –

  1. Is Blockchain Safe?
  2. What is Blockchain?
  3. Ransomware decryption tools
  4. Bitonic Sort
ADVERTISEMENT
All in One Excel VBA Bundle
500+ Hours of HD Videos
15 Learning Paths
120+ Courses
Verifiable Certificate of Completion
Lifetime Access
ADVERTISEMENT
Financial Analyst Masters Training Program
2000+ Hours of HD Videos
43 Learning Paths
550+ Courses
Verifiable Certificate of Completion
Lifetime Access
ADVERTISEMENT
All in One Data Science Bundle
2000+ Hour of HD Videos
80 Learning Paths
400+ Courses
Verifiable Certificate of Completion
Lifetime Access
ADVERTISEMENT
All in One Software Development Bundle
5000+ Hours of HD Videos
149 Learning Paths
1050+ Courses
Verifiable Certificate of Completion
Lifetime Access
Primary Sidebar
Footer
About Us
  • Blog
  • Who is EDUCBA?
  • Sign Up
  • Live Classes
  • Certificate from Top Institutions
  • Contact Us
  • Verifiable Certificate
  • Reviews
  • Terms and Conditions
  • Privacy Policy
  •  
Apps
  • iPhone & iPad
  • Android
Resources
  • Free Courses
  • Java Tutorials
  • Python Tutorials
  • All Tutorials
Certification Courses
  • All Courses
  • Software Development Course - All in One Bundle
  • Become a Python Developer
  • Java Course
  • Become a Selenium Automation Tester
  • Become an IoT Developer
  • ASP.NET Course
  • VB.NET Course
  • PHP Course

ISO 10004:2018 & ISO 9001:2015 Certified

© 2023 - EDUCBA. ALL RIGHTS RESERVED. THE CERTIFICATION NAMES ARE THE TRADEMARKS OF THEIR RESPECTIVE OWNERS.

EDUCBA

*Please provide your correct email id. Login details for this Free course will be emailed to you

Let’s Get Started

By signing up, you agree to our Terms of Use and Privacy Policy.

EDUCBA
Free Software Development Course

Web development, programming languages, Software testing & others

By continuing above step, you agree to our Terms of Use and Privacy Policy.
*Please provide your correct email id. Login details for this Free course will be emailed to you

EDUCBA

*Please provide your correct email id. Login details for this Free course will be emailed to you
EDUCBA

*Please provide your correct email id. Login details for this Free course will be emailed to you
EDUCBA Login

Forgot Password?

By signing up, you agree to our Terms of Use and Privacy Policy.

This website or its third-party tools use cookies, which are necessary to its functioning and required to achieve the purposes illustrated in the cookie policy. By closing this banner, scrolling this page, clicking a link or continuing to browse otherwise, you agree to our Privacy Policy

Loading . . .
Quiz
Question:

Answer:

Quiz Result
Total QuestionsCorrect AnswersWrong AnswersPercentage

Explore 1000+ varieties of Mock tests View more

🚀 Extended Cyber Monday Price Drop! All in One Universal Bundle (3700+ Courses) @ 🎁 90% OFF - Ends in ENROLL NOW