what is a bitcoin

What is bitcoin payment? The Internet era has changed lives of many and has brought novelties as well. The development of the World Wide Web and Internet-related businesses made people think about the virtual transactions. Money transfer and exchange systems turned to have a lot of limitations and inconvenience, such as high expenses, time delays, security risks.

The Idea

That is why the bitcoin payment system was designed. People needed a kind of the international cash which can be used on the Internet and which does not depend on a country or national bank and at the same time provides anonymity to its owners, protects from inflation, and grants protection against virtual defraudation.

This digital currency first appeared in 2009 and CEO of Bitpay payment processor, Anthony Gallippi, has described it as “a more secure, faster, and more affordable option for transferring funds.” The developers of bitcoins claim that this payment system is instant and available everywhere and all over the world, it does not require third parties and these are only the most evident benefits of bitcoin.

Do you want to learn about bitcoin advantages and disadvantages? Let us talk about the benefits and drawbacks on a standalone basis.

The Pros of Bitcoins

Payment autonomy. This is an opportunity to send or get any quantity of money instantly – worldwide and at any time. There are no bank holidays, no limits, no restrictions. Bitcoin system offers complete money control.

No taxes. When you use bitcoins, you do not pay taxes, because bitcoin is not a currency officially. It provides with an opportunity to make some purchases a bit cheaper.

Very low fees or no fee at all. For this moment Bitcoin Wallet owners do not pay fee to get bitcoins, moreover, fees do not depend on the amount of transferred money: one can send 10,000 bitcoins or 1 bitcoin at the same fee.  By the way, check these cool apps to send money to friends.

Safety and protection against frauds. Bitcoin transaction does not contain personal or sensitive information about the customers. Bitcoin users have full control of the monetary operations. There is a way to get extra protection (backup and encryption).

Transparent and neutral system. There is no need to worry “How safe is bitcoin?” All details about the bitcoin money supply are always available for everybody on the chain – one can check and make use of it in real-time. Bitcoin protocol are 100% secure because of the cryptography techniques.

FYI: UK Paypal promotes option to get payments in bitcoins!

The Cons of Bitcoins

A chance for illegal and immoral financial schemes (because of its security system). In 2013 the FBI closed the website, which used virtual money to assist “illegal drug sales, stolen identities, child pornography, prostitution, human trafficking, and illegal weapons sales.” Bitcoin payment system may be also actively used by cyber criminals to pay for specific services.

One of the biggest disadvantages of bitcoins is that the bitcoin technology limits the speed and quantity of monetary processes, not to mention that bitcoin drifts lower after technical milestone.

Too many risks. Bitcoins are in high demand, but if the level of demand goes down, bitcoins may be on the chopping bloc. Besides, there is still a lack of security. There is no guarantee that your virtual wallet is protected from human error (passwords), certain technical bugs (hard drive failures, malware), etc.

Currency fluctuations. Even small business activities may substantially affect the price of bitcoins. Consequently, nobody guarantees that you won’t lose money you have once invested in bitcoin.

This payment system is not so popular. Despite the fact the bitcoin payment system has appeared several years ago, many people do not know about it and do not trust it. Some countries may even put under a ban. It is unlikely that bitcoins will substitute traditional credit card transactions, but it is up to you to accept a decision.