I have seen a lot of people asking about Bitcoin lately. More and more sources are offering to accept it and many of us seem to be confounded by this new payment technology. In this article I will try to explain how Bitcoin works, how it may be useful in peer-to-peer and business transactions, and how to create an account.
What are the benefits of Bitcoin?
Anonymous: Unless users publicize their wallet addresses publicly, no one can trace transactions back to them. No one, other than the wallet owners, will know how many Bitcoins they have. Even if the wallet address was publicized, a new wallet address can be easily generated.
Untraceable: The source of funds for a Bitcoin transaction is not traceable to the owner of the funds.
Secure: Bitcoins cannot be stolen without physical access to a user’s computer. Only the owner of bitcoin can change its address by sending bitcoins to another account.
Immune to Seizure: There are redundancies built into the transactions database so that no one can seize bitcoins. This means that governments can’t freeze your account.
No Inflation Risk: With Bitcoin, there is no inflationary “printing” of money. There is a finite amount of Bitcoin that will ever be mined.
Tax Free: There is no way for a third party to intercept transactions of Bitcoins, and therefore there is no viable way to enforce taxation of payments made via Bitcoin.
Low Fees: Coinbase charges 1% to buy or sell Bitcoin.
Instantaneous: With Coinbase, if you add a credit card it allows for instant funding of your account. You don't even have to use the credit card to buy Bitcoin; it's just a backup in case your bank account has insufficient funds. This assures Coinbase that they can give you the funds immediately without the risk you have no money available in your bank account.
No Realistic Volatility Risk: You don't have to "store" any bitcoin to do a transaction. Just buy the bitcoin and transfer it to the seller. It's only in your account for the few seconds it takes to enter the recipient’s bitcoin address and hit send. Therefore, although the value of Bitcoin has fluctuated significantly on a few occasions in the past, these fluctuations did not occur in a matter of seconds. The chance of a major fluctuation in the time it takes you to complete a transaction is almost nil.
How do I buy and transfer Bitcoin?
Sign up for Coinbase, the world's largest, most secure, and most trusted Bitcoin exchange: https://www.coinbase.com/join/559d748531343900700000a8
You can use your bank account or a credit card to purchase Bitcoin. Do not be afraid. The purchase of Bitcoin is made with your account but the transfer is still untraceable. No one will be able to determine what you used the Bitcoin you purchased for or where you sent it.
If you add a credit card it to your Coinbase account it allows for instant funding of your account. You don't have to use the credit card to buy Bitcoin; it's just a backup in case your bank account has insufficient funds.
The usual protocol for a transaction is to agree on the price of the exchange at the time the deal is made (i.e. the Bitcoin/$ exchange rate) and stick to that amount regardless of minor fluctuations just like you would when purchasing something internationally.
The seller then provides his Bitcoin address to the buyer and the buyer transfers the agreed upon amount of Bitcoin to the seller’s address.
This transfer is instantaneous and completed without having to go to a physical location and fill out forms (i.e. WU, MG).
Ultimately, Bitcoin is not that complicated. However, do not just use some random Bitcoin site or App. Stick with a trusted Bitcoin exchange. Use this link to sign up for Coinbase, the world's largest, most secure, and most trusted Bitcoin exchange: https://www.coinbase.com/join/559d748531343900700000a8
What are the benefits of Bitcoin?
Anonymous: Unless users publicize their wallet addresses publicly, no one can trace transactions back to them. No one, other than the wallet owners, will know how many Bitcoins they have. Even if the wallet address was publicized, a new wallet address can be easily generated.
Untraceable: The source of funds for a Bitcoin transaction is not traceable to the owner of the funds.
Secure: Bitcoins cannot be stolen without physical access to a user’s computer. Only the owner of bitcoin can change its address by sending bitcoins to another account.
Immune to Seizure: There are redundancies built into the transactions database so that no one can seize bitcoins. This means that governments can’t freeze your account.
No Inflation Risk: With Bitcoin, there is no inflationary “printing” of money. There is a finite amount of Bitcoin that will ever be mined.
Tax Free: There is no way for a third party to intercept transactions of Bitcoins, and therefore there is no viable way to enforce taxation of payments made via Bitcoin.
Low Fees: Coinbase charges 1% to buy or sell Bitcoin.
Instantaneous: With Coinbase, if you add a credit card it allows for instant funding of your account. You don't even have to use the credit card to buy Bitcoin; it's just a backup in case your bank account has insufficient funds. This assures Coinbase that they can give you the funds immediately without the risk you have no money available in your bank account.
No Realistic Volatility Risk: You don't have to "store" any bitcoin to do a transaction. Just buy the bitcoin and transfer it to the seller. It's only in your account for the few seconds it takes to enter the recipient’s bitcoin address and hit send. Therefore, although the value of Bitcoin has fluctuated significantly on a few occasions in the past, these fluctuations did not occur in a matter of seconds. The chance of a major fluctuation in the time it takes you to complete a transaction is almost nil.
How do I buy and transfer Bitcoin?
Sign up for Coinbase, the world's largest, most secure, and most trusted Bitcoin exchange: https://www.coinbase.com/join/559d748531343900700000a8
You can use your bank account or a credit card to purchase Bitcoin. Do not be afraid. The purchase of Bitcoin is made with your account but the transfer is still untraceable. No one will be able to determine what you used the Bitcoin you purchased for or where you sent it.
If you add a credit card it to your Coinbase account it allows for instant funding of your account. You don't have to use the credit card to buy Bitcoin; it's just a backup in case your bank account has insufficient funds.
The usual protocol for a transaction is to agree on the price of the exchange at the time the deal is made (i.e. the Bitcoin/$ exchange rate) and stick to that amount regardless of minor fluctuations just like you would when purchasing something internationally.
The seller then provides his Bitcoin address to the buyer and the buyer transfers the agreed upon amount of Bitcoin to the seller’s address.
This transfer is instantaneous and completed without having to go to a physical location and fill out forms (i.e. WU, MG).
Ultimately, Bitcoin is not that complicated. However, do not just use some random Bitcoin site or App. Stick with a trusted Bitcoin exchange. Use this link to sign up for Coinbase, the world's largest, most secure, and most trusted Bitcoin exchange: https://www.coinbase.com/join/559d748531343900700000a8
