Without a doubt, Bitcoin is the most popular cryptocurrency out there. However, even with its popularity, many people know little about it. They watch and listen to talk shows about it and read it on print and websites, but they have never grasped how it works. If you’re thinking of investing in Bitcoins, extensive knowledge of Bitcoin will help you succeed quickly. But first, you must know its characteristics before going deeper. Here are the characteristics of Bitcoin you should know:
Bitcoin is an anonymous cryptocurrency
With advancements in technology these days, banks can easily acquire their client information, such as phone numbers, addresses, spending habits, credit history and much more. With Bitcoin, it’s completely different. The wallet, which stores your Bitcoins, doesn’t have to contain your personal information. Although Bitcoin allows you to transact anonymously, governments and other authorities don’t like the anonymity. They argue that anonymity allows drug traffickers and terrorists to conduct their businesses under the radar.
Bitcoin is a decentralized system
Satoshi Nakamoto’s main aim of creating Bitcoin was to ensure it runs independently from any government interference. It’s also a peer-to-peer network, which means transactions occur between two parties without the involvement of a third party.
Bitcoin is a transparent system
Each transaction that takes place on the Bitcoin network is stored in the blockchain. For instance, if you used your wallet address publicly, just about anyone can figure out how much Bitcoin is in it by simply looking at the blockchain ledger. But linking a wallet address to a specific person is still not possible. Still, if you want to stay anonymous while making Bitcoin transactions, you can do so. There are specific wallets that are designed to conceal your wallet address. However, the most effective method to hide your wallet address is to use multiple addresses and to desist from transferring a lot of money to a single wallet.
Bitcoin is a quick method to transact
Payments are processed almost instant with the Bitcoin network. If you are sending money to someone on the other side of the world, it will only take a few minutes for the payment to reflect in their account. On the other hand, traditional bank transfers take days to reflect.
Bitcoin transactions can’t be reversed
Once you affect a transaction, it can’t be reversed. Only the recipient can send the coins back to you. That’s why it’s advisable to double check the wallet address you’re sending money to before you send the coins.
It’s a good idea to know these characteristics so that you venture into Bitcoin with the best foot forward. Knowing these characteristics will also help you avoid making grave mistakes like sending Bitcoins to the wrong address and exposing your private keys to scammers.