Peer to peer technology has evolved to accommodate payment systems, as demonstrated by Bitcoin. It is a digital currency that can be used for personal and business transactions at a reasonable cost. Sometimes called the currency of the internet, Bitcoin is not governed by any central authority. Created about five years ago, it has grown in leaps and bounds with many speculators stating that this increase will continue in the near future.
More about Bitcoins
Bitcoin describes the actual gaming technology. These coins represent the currency itself and are transacted. They are sent or received through wallet software running on a PC, web app or smartphone. It can be obtained by exchanging goods and services, or by mining.
What is Mining?
Mining is simply the process by which new bitcoins are created. For every transaction that takes place, records are stored sequentially in a public database called a block chain. Those who maintain this block chain are the miners, and their reward is the newly created bitcoins.
Use of Bitcoins
These coins are easily available for different currencies. The most painless way is to buy it for money. There are companies that extend exchange services to their customers with rates determined by factors such as volume.
There are people who invest in bitcoins, with expectations that their value will rise. Although this belief cannot be denied, it has some risks to it. There are weaknesses in these coins, and this factor makes large investments difficult. This along with some inherent limitations such as the immutability of transactions, the volatility of the Bitcoin exchange rate, and the limited discretion of the user make the investment a reserve only for sophisticated investors. However, Bitcoin can avoid inflation, making it ideal for areas where national currencies are problematic.
The Future of these coins
Bitcoins have received mixed reactions in the market. Some economists say this technology offers a long-desired digital currency. Others find it less appealing, arguing that its lack of reliability and variability are discouraging. Regardless, many merchants are warming to it, and its growing popularity means its success as a mainstream payment method is imminent.
If you are new to Bitcoin and you spend a lot of time online, you should try it. It offers a kind of unique flexibility and convenience that is missing from other available payment gateways.