Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoin does not have physical existence as other currency. Bitcoin are produced by the so called” mining” process. There are more and more people and businesses, running computers all around the world, mining bitcoin.
Bitcoin is often called the first cryptocurrency, although prior systems existed. Bitcoin is more correctly described as the first decentralized digital currency. It is the largest of its kind in terms of total market value. As of today, the market capitalization of Bitcoin is almost $5 billion.
What characteristics make bitcoin so special?
Fast Transaction Speed:
When you deposit a personal check into your own bank account, the bank usually holds some of the deposit for few business days for security purposes so it could take days before you can really use the entire deposit. If you have inter-bank oversea wire transfer the holding period could be even longer. However, bitcoin transaction is far fast than a bank transaction; usually take less than 30 seconds to close a transaction. The difference between transaction speeds is obvious.
Bitcoin network is a decentralized network that means no bank or institution has the power to control it. Every machine which involves in the bitcoin mining and transactions process makes up a part of the network, and all machines work together makes up the bitcoin network. There is no possible way for any institution to control all the machines in the network and even if some part of the network goes offline for some reason, the money keeps on flowing.
The bitcoin system is peer-to-peer which means users can trade without the help of an intermediary. Users can hold multiple accounts and none of accounts link to any names. If you want you can use fake IP address so nobody can track your IP address. You can be as anonymous as you want if you are careful enough.
Cheap Transaction Fees:
Banks could charge a lot for international transfer but as for Bitcoin transaction fee is way cheaper, usually a 0.2% commission.
This is the first of several articles on Bitcoin, stay tune for more next week.