Bitcoin is a digital currency which was created and held electronically, nothing is printed or carried physically. Plus, uniquely in this world of ownership, no one controls it, in fact we don’t know for certain who was inspired to invent it, although we have the name Satoshi Nakamoto recent claims from Australian Craig Wright led many to consider that he was Bitcoin’s founder but so far there’s been no confirmation. Bitcoin’s own vision sees them transforming the financial landscape, for them their payment system is just the tip of the iceberg.
Since its 2009 release Bitcoin is proving ever more popular with businesses running a peer to peer payment system with computing software that solves mathematical issues, uses algorithms and encryption. It is a universal currency so the calculations are correct whether the business is in London, Tokyo or New York.
All transactions are irreversible and verified in a public distributed “block chain” ledger. This means that you are not wholly protected from someone identifying a transaction as by a particular user but there are effective encryption tools and mixers and using a separate Bitcoin address with each payment will reduce the risk of identity discovery.
There are around four hundred digital currencies in the world but Bitcoin is the best known and we know exactly how many Bitcoins are in existence at a variable value, at the time of writing $600 or £417.50 each but divisible, and when they reach twenty one million Bitcoins in the system it ceases. The more popular Bitcoin is, the higher the value per Bitcoin.
Payment is incredibly fast globally and the technology is consistently improving. Hundreds of millions are making Bitcoin transactions every month.
Bitcoin offers the advantage of no chargebacks for merchants.
- Transaction fees are highly competitive against card transactions.
- All Bitcoin transactions are over $5/£3.50 value.
- Contactless payment is possible with Bitcoin.
The system monitors activity for counterfeit “double spend” attempts to use the same coin twice. So, one transaction, one Bitcoin, one secure limit for all.
Wallets can be held, some take control of the account – avoid these if possible – but many wallets are secure and only the Bitcoin user can access them but the flipside is that should a password be forgotten and never remembered the funds in the wallet will be lost. It’s recommended that Bitcoin users have several accounts to safeguard against great loss.
The only deterrents are that some may find the lack of someone to raise issues with a problem, as no one controls the payment system there is no one to complain to, and if demand peaks and one Bitcoin is worth thousands, this could deter small business users, making it a tool for global corporations.
So, we have a technological payment system that is wholly electronic, fast, secure, the same coins can’t be used fraudulently; sole control multiple wallet facilities, competitive transaction rates and global acceptance plus integrity, Bitcoin should be able to compete fantastically in the future.