The Main Differences Between Bitcoins and Traditional Currencies

Bitcoins and Traditional Currencies

It’s perfectly true that Bitcoin is disrupting certain industries, including the banking industry. The only thing that slows the implementation of Bitcoin as a reliable and secure payment system is that it’s not regulated. This makes people skeptical about its long-term existence. That’s why people still prefer traditional currencies. But what are the differences between Bitcoin and traditional currencies: let check them out:

Bitcoin is more durable than traditional paper currencies

One characteristic of Bitcoin is that it doesn’t exist in its physical form. That means the bitcoins can’t be damaged in any way. Traditional currencies, such as paper money and coins can easily be damaged. Paper money can be damaged when exposed to high temperatures or when it comes into contact with water. Traditional coins can be damaged when exposed to high temperatures.

Bitcoins cannot be counterfeited

The design of Bitcoin means there is no possibility to counterfeit it. The blockchain technology and strong algorithms guarantee the legitimacy of Bitcoin. With these powerful security measures, even the savviest hackers can’t access and transfer your Bitcoins. Paper money can easily be counterfeited. We often see on TV and read newspapers about confiscation of counterfeit currencies. But it’s hard to come by news about counterfeit Bitcoins.

Bitcoin is decentralized

An authority administers traditional currencies.  That’s means each transaction passes through a traditional bank, where the sender is charged a hefty fee. On top of that, it takes days for the money to reflect on the recipient’s account. Bitcoin, on the flip side, is a decentralized digital currency, which means no third-party controls it. It’s built upon communication and cooperation of people partaking in it. Due to that, transactions will still go on, even if a glitch affects part of the network.

Unlike traditional currencies, Bitcoin transactions can’t be reversed

If you send money to the wrong Bitcoin wallet, there is no way you can reverse the transaction. You can only get your Bitcoins back if the recipient resends them back to you. This aspect was implemented to mitigate Bitcoin fraud. With traditional currencies, transactions can be reversed. The sender only needs to make a call.

Bitcoin is accepted worldwide

While popular currencies like the dollar, Euro and Pound are accepted worldwide, some currencies cannot be accepted beyond borders. Bitcoin, on the other hand, is accepted universally and you can easily buy something from another country using it.

Conclusion

With this rundown, it’s easy to see why Bitcoin can disrupt the financial industry if it’s accepted by most countries. But with Bitcoin owners hard at work to make the network secure, transparent and fast, it might defy the odds and become the new currency of the world.

5 Key Characteristics of Bitcoin

Characteristics of Bitcoin

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.

Conclusion

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.

3 Main Advantages of Bitcoin Regulation

Bitcoin Regulation

While Bitcoin Promises to be the solution to the international money transfer issue, people are still afraid to implement it because of one reason: It’s not regulated. Regulation is whereby a government or concerned authority makes rules to control how something is undertaken or the way that people behave. However, at the moment, Bitcoin is not regulated, and most governments across the world have not been able to control the acquisition and use of Bitcoin. That means any central bank can’t control the way Bitcoin is generated and used. But Bitcoin regulation can be a good thing for buyers, sellers and exchanges. Here are the advantages of regulating Bitcoin activities:

Regulation of Bitcoin will reduce scams

Bitcoin is a relatively new technology, which means few people know its dynamics. In other words, most people who are looking to invest in Bitcoin don’t know its roots and how it works. Such people can easily get scammed. Regulation means Bitcoin will be a legal system and so the government will dedicate a ton of money for its awareness. If any government spearheads anything, awareness can spread like wildfire. Part of the awareness effort will include educating people on how to spot scams, and this can help minimize scam statistics.

Bitcoin exchanges will be streamlined

Bitcoin exchanges are not regulated, which means they can charge any transaction fee they want without consequences. Bitcoin owners and investors bear the biggest brunt when Bitcoin exchanges impose hefty transaction fees. It negatively impacts their profit margins and can make the whole Bitcoin investment process worthless. With regulation, these exchanges will be closely monitored, and a cap will be placed on the highest percentage they can impose on transaction fees. And this can ensure Bitcoin owners and investors get decent profits.

Someone will be accountable in case of Bitcoin hack

Bitcoin is the safest cryptocurrency out there. But despite that, more Bitcoin exchanges are hacked each year. The sad part is that nobody takes responsibility whenever a hack occurs. The owners of the stolen Bitcoins have no choice but to suffer in silence. With regulation, the government will require that the Bitcoin owners be compensated if it was their fault. This will compel Bitcoin exchanges to fortify their platforms to prevent any hacks from occurring.

Conclusion

With regulation, people will not be skeptical about the safety of the network. This will allow Bitcoin to truly grow and become the currency of the future.