With the advent of the Internet, various efforts have been made to take the physical exchange of currency into electronic format. However, these efforts have recorded a significant progress and now over 95% of the entire cash in the world is in digital or electronic form, leaving the physical cash to be at a mere 5% of the entire money in the world!
Over the past few days, if you’ve been very active on cashrange, we have been discussing on some ways of sending and receiving money electronically, using some various payment platforms. However, we will also be looking at that briefly, but from a different point of view.
Ever since the trade by barter system was originally introduced by Mesopotamia around 6000BC, we have
witnessed different types of goods/currency exchange. But in the 18th Century Paper Cash was introduced.
Many payment platforms like paypal and perfectmoney have tried their hands at developing a new source of the digital or electronic currency exchange system. However, one of the recent additions to these platforms in digital currency exchange
It’s the first example of a growing category of money known as cryptocurrency.
A software developer called Satoshi Nakamoto proposed bitcoin. It is an open-source payment service that has been in operations since 2009. You can make use of these Bitcoins to buy anything online and many merchants are beginning to accept this new form of digital currency.
Many networks like Amazon, eBay, Zappos, Microsoft, Dell, Shopify and more already accept Bitcoins as a form of payment. You can as well buy a hosting plan with Bitcoin.
In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to
regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value.
How is Bitcoin Different From Other Currencies?
If you are familiar with the use of digital online currency exchange, you must be aware of the transaction fees charged by these payment platforms like the ones listed above. The most important aspect of Bitcoins that differentiates it from other digital currency exchange services is that it does not charge any kind of transaction fees. Moreover, one most important factor of the Bitcoin system that differentiates it from others is that using Bitcoin allows users to handle their payments completely anonymously.
How Does Bitcoin Work
Bitcoin does not base upon a central
authority or a bank and instead is carried out by the network of its entire community.
These networks allow users to buy and sell Bitcoins from their chosen form of currency including USD, Euros and more.
These newly bought Bitcoins are now stored in your digital wallet, and could be accessed over mobile or desktop devices. You can also send or receive Bitcoins from other users with a simple tap of the button.
There is no fee charged for receiving or sending these Bitcoins. The accrued Bitcoins could also be used to make purchases online at outlets which currentlyaccept them. This is a simple explanation of how the Bitcoin works .
How To Get or Acquire Bitcoins
There are different ways through which you can acquire or get Bitcoins, some of these ways include:
1. Mining: People compete to “mine” bitcoins using computers to solve complex math puzzles. This is how bitcoins are created.
This mining is done by “Miners”. They are individual groups of people who lend their computing power and capacity to the community and to keep the integrity of transactions on the network in check. These Miners verify the transactions on the network and are rewarded with the newly generated Bitcoins for their efforts.
A transparent publicly maintained ledger is then updated with transactions on the Bitcoin network.
2. Exchange: Several marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies. Like I have mentioned earlier, there is no extra charge or hidden charge attached to the exchange of Bitcoin. This is one of the primary ways people are making use of Bitcoins
Some of the places to exchange, or buy Bitcoins are; Coinbase (You will also get additional $10 when you buy Bitcoin worth $100), Unocoin (Free bitcoin on signup & verification) also Purse.io is a great peer-to-peer bitcoin exchange service that offers discounts for purchases using Bitcoins.
Although there are many upsides to Bitcoin, there is also a dark side to it. Because of the anonymity in using Bitcoin, through the Bitcoin service, it is also used across the Dark Web to buy illegal stuff on the market.
What do you make of this new form of Digital currency exchange without any intervention from a central system or banks? Feel free to share your thoughts and comments below.