A purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution. – Satoshi Nakamoto
How Does Bitcoin Work?
The blockchain is a public ledger that records and publically displays all Digital Currency transactions that are executed within the Bitcoin system. A block is a permanent record of recent transactions. The blocks of recorded information build upon each other to form the blockchain that dates all the means back to the primary bitcoin transaction.
The transparency established by the blockchain is important in securing the validation method because it allows the community to monitor and self-police transaction activity. It also permits for verification of each the spender and therefore the recipient and ensures that double-spending a bitcoin is not possible. We will discuss the blockchain in larger detail in future guides. – Bitcoin Tutorial
Five Benefits of Bitcoin
1 – Faster, Cheaper Payment Solution
Bitcoin transactions can occur at any time, are fast and have lower fees. the typical Bitcoin transaction is executed in ten minutes with fees for easy P2P transfers of remittances returning in at under a hundred and twenty fifths. This is due in large part to the very fact that traditional third-party financial institutions like banks are removed from the transaction process. Merchants and people using bitcoins are not restrained by set banking hours, withdrawal limits or long transaction execution periods before funds become available.
2 – Safeguards Against Currency Manipulation
Bitcoin is not owned or controlled by a country or governing body. Additionally, unlike many other forms of currency, the number of bitcoins that will be issued is finite, exactly 21 million. The benefit of this lack of ownership and the finite amount is that the bitcoin supply cannot be artificially manipulated. When it comes to fiat currency, governments can easily print additional paper or mint coins, devaluing existing money in circulation and causing inflation. The decentralized nature of bitcoin decreases monetary concerns and largely leaves fluctuations in value up to natural supply and demand economics.
3 – Greater Consumer Protections
The use of bitcoin as an alternative to fiat currency provides protection against the downside that can occur with traditional bank accounts. This includes the threat of bank failure or skimming. In the event of a bank failure, a customer can face frozen bank accounts while liquidation plans or bailouts are hashed out. In some countries, traditional bank customers may even find that banks will skim money off of customer’s accounts in order to to remain solvent. This occurred during the banking crisis faced by Cyprus in 2013. With bitcoin, individuals remain in full control of when and how their assets are retrieved, transferred and spent. Essentially, digital currency users become their own bank.
4 – Greater Transparency
Because all bitcoin transactions are permanently recorded on the blockchain, all transactions are public and traceable. The balance associated with each address is also part of the public record. The blockchain makes bitcoin much more transparent than many other monetary systems.
5 – Private and Secure
Although all bitcoin transaction details are stored publicly on the blockchain, the identities of the users involved remain relatively anonymous. Because payments can be made without including personal identification information, Bitcoin provides inherent security against identity theft. Additionally, there is no risk of being charged twice or of fraudulent charges being assessed to your wallet thanks to the blockchain, which monitors unique coin addresses and eliminates the possibility of paying multiple people with the same bitcoin. Bitcoin doesn’t offer the complete anonymity of cash but is certainly a far more private experience than making online payments or transactions using debit or credit cards.
Satoshi Global is holding a seminar in London Heathrow on Friday 5 January, 7:00 pm – 8:30 pm to explain all!
Tel: 020 3488 9300
Bitcoin For Beginners explores the most common questions that beginners want to know.
We take you through the basics in this 1&a-half-hour workshop in a great London location.