OK, so what is Bitcoin?
It’s not a coin, it’s ‘cryptocurrency‘, a digital payment method produced by many people worldwide (\\\\\\\\ disguised \\\\\\\\). It offers direct, global, free or very cheap peer-to-peer transactions.
Bitcoin was invented after decades of cryptography research by software developer Satoshi Nakamoto (believed a pseudonym), who designed the algorithm and introduced in 2009. His true identity remains a mystery.
This currency is not supported by tangible raw materials (such as gold or silver); Bitcoins are traded online, making them a commodity in itself.
Bitcoin is an open source product, accessible to anyone who is a user. All you need is an email address, internet access and money to get started.
Where does it come from?
Bitcoin is operated on a distributed computer network of users who perform specialized software; The network solves certain mathematical evidence and searches for a particular data sequence (\\\\\\\\ block \\\\\\\\) that produces a particular pattern when the BTC algorithm is applied to it. A contest produces a bitcoin. It is complex and time and energy.
Only 21 million bitcoins are ever extracted (about 11 million are currently in circulation). The math problems that solve the network computers are becoming increasingly difficult to control mining and supply.
This network also applies to all transactions via cryptography.
How does Bitcoin work?
Internet users transfer digital assets (bits) to another on a network. There is no online bank; Better, Bitcoin is described as an internet scattered ledger. Users buy Bitcoin with money or by selling a product or service for Bitcoin. Save Bitcoin Portfolios and use this digital currency. Users can sell from this virtual ledger by distributing their Bitcoin to anyone who wants to. Everyone can do this anywhere in the world.
There are smartphone apps for performing mobile Bitcoin transactions and Bitcoin exchanges are on the Internet.
How is Bitcoin appreciated?
Bitcoin is not held or controlled by a financial institution; It is fully decentralized. Unlike real money, it can not be treated by governments or banks.
Instead, Bitcoin’s value is simply in acceptance between users as a means of payment and because delivery expires. Global currency values fluctuate according to supply and market specification; When more people make portfolios and own and spend bitcoins, and accept more companies, Bitcoin’s value will increase. Banks are now trying to appreciate Bitcoin and for some investment sites to predict that the price of a bitcoin will be in 2014 a thousand dollars.
What are its benefits?
There are benefits to consumers and traders who want to use this payment option.
1. Fast transactions – Bitcoin is transferred directly over the internet.
2. No cost / low cost – Unlike credit cards, Bitcoin can use free or very low costs. Without the centralized institution as an intermediary, no licenses (and charges) are required. This improves profit margins sales.
3. Eliminates fraud risk. Only the Bitcoin owner can send the payment to the intended recipient, who is the only one that can receive it. The network knows that the transfer has taken place and transactions are validated; They can not be challenged or taken back. This is ideal for online sellers who are often subject to credit card processor reviews or whether a transaction is fraudulent or companies paying the HIVh Credit card refund.
4. Data is safe – as we have seen in the recent hacks on national payment payment systems, the Internet is not always a safe place for private data. Bitcoin does not give users personal information.
a. They have two keys: a public key that serves as the bitcoin address and a private key with personal information.
b. Transactions are digitally signed by combining public and private keys; A mathematical function is applied and a certificate is generated that proves that the user has initiated the transaction. Digital signatures are unique to each transaction and can not be reused.
c. The merchant / recipient never sees your secret information (name, number, physical address) so it’s a little anonymous but it’s traceable (to the bitcoin address on the public key).
5. Useful payment system – Traders can use Bitcoin as a payment system completely; They do not need to maintain the Bitcoin currency, as Bitcoin can be converted into dollars. Consumers or traders can trade in and out of Bitcoin and other currencies at any time.
6. International payments – Bitcoin is used worldwide; E-commerce merchants and service providers can easily accept international payments, opening new potential markets to them.
7. Easy to follow – The network follows and logs each transaction permanently in the Bitcoin Block Chain (the database). In case of unlawfulness, it is easier for officials who trace these transactions.
8. Micropayments are possible – Bitcoins can be divided into one hundred millionth, so performing small payments of one dollar or less will be a free or almost free transaction. This can be a real boost for convenience stores, coffee shops and subscription-based websites (videos, publications).
A little confused? Here are some examples of transactions:
Bitcoin in the retail environment
At the checkout, the payer uses a smartphone app to scan a QR code with all transaction data needed to transfer the bitcoin to the retailer. Pressing the \\\\ Confirm \\\\ button will complete the transaction. If the user does not own Bitcoin, the network converts dollars into his account into the digital currency.
The retailer can convert that bitcoin into dollars as desired, there were no or very low processing costs (instead of 2 to 3 percent), no hackers can steal personal consumer information and there is no risk of fraud. Very smooth.
Bitcoins in hospitality
Hotels can accept Bitcoin for room and food payments on site for those who want to pay Bitcoin with their mobile wallet, or via the PC to the website to pay online. A third-party BTC merchant processor can assist in processing the transactions it removes over the Bitcoin network. These processing clients are installed on tablets in the device or in the restaurants for users with BTC smartphone apps. (These payment processors are also available for desktops, in POS systems for retail, and integrated into foodservice POS systems.) No credit cards or money need to change hands.
These cashless transactions are fast and the processor can convert bitcoins into currency and make a daily direct deposit on the company’s bank account. In January 2014, it was announced that two Las Vegas casinos pay Bitcoin at the reception in their restaurantts and accept at the gift shop.
It sounds good – so what’s the catch?
Business owners must consider issues of participation, security and costs.\\ A relatively small number of ordinary consumers and sellers use or understand Bitcoin right now. Nevertheless, adoption takes place worldwide and tools and technologies are developed to make participation easier.
It’s internet, so hackers are threats to the exchanges. The Economist reported that a Bitcoin Exchange took place in September 2013 and was stolen in the $ 250,000 in bitcoins of online safes. Bitcoins can be stolen as another currency, so alert network, server, and database security is paramount.
Users must carefully protect their bitcoin portfolios, which contain their own keys. Secure backups or prints are crucial.
Bitcoin is not regulated or insured by the US government, so there is no insurance on your account if the exchange is unlimited or robbed by hackers.
Bitcoins are relatively expensive. Current prices and sales prices are available on the online exchanges.
The virtual currency is not universal yet, but market awareness and acceptance. A company can decide to try Bitcoin to save on credit card and bank charges, as a customer convenience, or to see if it helps or hinders sales and profitability.
Do you think you accept Bitcoin? Do you already use it? Share your thoughts and experiences with us.