Understanding the Pros and Cons of Bitcoin

 

Over the past few months, Bitcoin along with other types of cryptocurrency have dominated news headlines. But last week it stirred mixed reactions when Bitcoin passed the $11,000 threshold.

What’s bitcoin?

Bitcoin is a form of digital currency that’s not linked to any banking institution or government administration and allows a user to spend his/her money incognito. These coins are produced by users who actually “mine” them when they lend computing power to validate transactions made by other users. In return, they receive more bitcoins. You can store your Bitcoins in a digital wallet that’s accessible using your smartphone or computer.

One can also buy and sell bitcoins in exchange for U.S. dollars as well as other currencies. They have significantly fluctuated in value over time.

How it works

Think of Bitcoins as your personal debit card— which is a good way to electronically pay for items and services whether on- or offline. Now, what if your debit card strictly stored its unique form of sophistically encrypted digital currency? That’s exactly how Bitcoin works.

Just like traditional money, you earn bitcoins by trading an items or service. Only that it can’t be touched as with cash or physically handed to a vendor.

Bitcoins are kept in digital wallets accessible by computer and smartphones, and can be spent at the holder’s own pleasure as long as the recipient agrees.

Where to use your bitcoin

2008 marked the rise of Bitcoin-friendly companies and since then, up to 11,000 businesses have emerged (as well as several ATMs) in the United States and Canada. To help better the situation, financial institutions like emerchantbroker.com are assisting more business owners with Bitcoin merchant accounts.

 But still, why are billions of people embracing a currency that’s limited to a few points of sale? For majority of bitcoin users, privacy is the main reason.

 Bitcoin’s Pros

 Privacy

 Unlike card payments that go via banks, bitcoins are directly transferred from one individual to another— without sharing personal info— which makes it a virtually anonymous method.

Transparency

In place of a bank, a network monitors all transactions on a mutual balance sheet, which ensures impartiality and answerability on all parties, ruling out the leeway for “cooking the books.”

A good Investment

 The ever-fluctuating exchange rate of the Bitcoin currency makes it a good way to invest. Actually, most individuals trading bitcoin are considering it an investment.

Bitcoin’s Cons

No formal Regulations

Lack of formal regulations makes this cryptocurrency somehow fuzzy.

Difficult to trace

Moreover, its difficulty to trace has made it a favorite for cybercriminals seeking ransom and drug dealers in the online black market (like the famous Silk Road scandal).

Author Bio

 Electronic payments expert, Blair Thomas, co-founded eMerchantBroker in 2010. His passions include writing/producing music, and travel. eMerchantBroker is America’s No.1 Bitcoin Merchant Account company, serving both traditional and high-risk merchants.