The creation of the crypto-currency called Bitcoin took the financial and monetary world by storm. It was a unique concept that made people seriously consider the game changing effect that a paperless and decentralized monetary system will have on the world economy.
Created by Satoshi Nakamoto, this is a pseudonym used by the Bitcoin creator, the true identity of the creator or group of creators is not publically known.
Bitcoins are digital, paperless currency. The paperless part is nothing new for the consumers and the industry since people have been long used to credit cards, debit cards, even completely online digital payments systems, such as Paypal. Payoneer, Stripe, etc. However, the advent of Bitcoins has a few unique aspects that set it apart from other methods. The main differentiating factors are the facts that it is a decentralized currency, there is no central authority overseeing or keeping track of transactions. The Bitcoin system is a pure peer-to-peer payment system.
Another factor is that it is completely anonymous; the transactions are not connected to your real-world identity. There is no way of tracing the source or destination of a transaction once it has been made, the parties involved in the transaction are only connected for a short time and they also do not know the trading partners. The transactions mechanisms are handled based on a set of unique numbers that are exchanged.
The Tumultuous Journey of the Bitcoin Value over Time
- The highest value was reached a historical high of high at $1,242 per coin on Nov. 29, 2010.
- The current value of 1 bitcoin is equivalent to U.S.$232.33.
- Current market capitalization is U.S.$3,398,353,003
Advantages of Using Bitcoin
The advantages have made this crypto-currency become more and more acceptable with industry giants like Microsoft now accepting Bitcoin payments for its products.
Transactions are public
This might not seem like a bad idea at first glance, but the Bitcoin system relies upon a block chain system, which has to verify all transactions before finalizing them. The peer-to-peer system needs data to be public to validate the transfer.
You remain anonymous
The Bitcoin system uses a pseudonym of sorts to represent you in the system. This is not linked to any personally identifiable information and makes transactions anonymous. The creator of the Bitcoin protocol however advises users to create a new address for each transaction in order to protect themselves.
Your address and the other party’s address are a string of alphanumeric characters, something like this:
12TBHJSqd1jgd9cpORSTm4VUYw3QDDWMoB
The amount specified is simply recorded as having been moved from one party’s Bitcoin wallet to the other’s after it has been verified by the block chain.
Transaction fee is 0
There are no transaction charges unlike regular payment sources. This means you actually get to save money when you use Bitcoin.
No middle-man needed
Traditional fiat currencies have to be created, maintained and overseen by a governing institution that verifies transactions. On the other hand, Bitcoin eliminates the need for a middle-man, the system is self-sustaining.
Quick Payments
Bitcoin payments are quickly verified and international payments are completed within one to six hours.
Helps Vendors save Money
Businesses only have to pay a 1 percent transaction fee on payment; this payment is made to a Bitcoin provider that manages your transactions. This is comparatively lower than the regular credit card transactions fees, which can range from 2 percent to 3 percent.
Highly Accessible
All you need is a working Internet connection and an account with a Bitcoin wallet, which is managed by a Bitcoin provider.
No Taxation
There is no third party involvement; therefore taxing the system is not possible.
Seizure of Currency is Impossible
There is no way to seize the Bitcoin amount held by a person. Authorities can’t freeze your Bitcoin assets.
Transactions are Untraceable
The transactions you make are untraceable, there is no data trail leading back to you, your financial data are secure from third-parties.
Non-Physical Entity
Bitcoins can not be stolen from you; the ownership can only be changed by the owner. Physical access to your system is required to use your Bitcoins.
Increasing Popularity among Merchants
Both online and brick-and-mortar businesses are accepting Bitcoins as payment due to the low transaction costs.
Highly Divisible
Due to the cryptographic algorithms used to generate Bitcoins, there is a limited supply that can be created. However, this limitation is addressed by the fact that Bitcoins are highly divisible, each Bitcoin can be divisible for up to eight decimal points.
Not Debt-based
The current monetary system of the world is termed a debt-based one by leading economic theorists. In stark contrast the bitcoin system is not debt-based.
From the facts stated above it is clear that Bitcoin has some amazing advantages which is why it has been accepted by a large number of individuals and companies. It is helping online marketing as well since making payments online has become easier with the help of BitCoin. If you love to trade online, then you too should consider this option.
This new currency system soon could affect how people pay for their digital marketing. Crawford and O’Brien continues to watch these trends and see how they might connect to their clients marketing needs.
References
Bitcoin Price Index – Real-time Bitcoin Price Charts. Retrieved Sept. 19, 2015.
2013: Year Of The Bitcoin. (2013, December 10). Retrieved September 19, 2015, from http://www.forbes.com/sites/kitconews/2013/12/10/2013-year-of-the-bitcoin/
“Crypto-Currency Market Capitalizations.” Crypto-Currency Market Capitalizations. Web. 19 Sept. 2015.
Russell, Jon. “Microsoft Begins Accepting Bitcoin For Windows, Windows Phone And Xbox Purchases.” TechCrunch. Dec. 10. 2014.