Bitcoin is a payment processor like PayPal where you can send and receive digital money called Bitcoins. The protocol and software of this cryptocurrency were developed on open source platform. Many people around the world might have heard of Bitcoin but still they are unaware of its usage. I’m not here to make this article more complicated. I’ll try to make it simple for you.
How Bitcoin Works?
To send and receive Bitcoins you need to have a Bitcoin payment (wallet) address. You can use either PC or mobile app for transactions. Remember that this address is unique. Before that you need to know about “Block Chain”. Block chain is something like ledger or database where every Bitcoin transaction gets recorded. Here every transaction get checked for its authentication. Many people think that Bitcoin transactions are anonymous but your identity naturally gets protected. The best thing is Bitcoin works without middle men. You don’t need to worry about commissions. All you need to have Bitcoin address to receive and send Bitcoins. Later you can sell bitcoins for money. You can also buy bitcoins for the future use.
In the recent years many businesses and individuals have opted for Bitcoin for their digital transactions. But, still some people get confused with the system.
Note : The advanced users can use specialized hardware to process Bitcoin transactions called mining.
How To Get Started With Bitcoins?
You might be an individual or a business you can receive bitcoins for your service. In the same way you can pay others for their services. For instance you are a freelance content writer from India and you had worked for a renowned company in Europe. If they insist you to pay via Bitcoins, then you need to register on third-party exchange like Unocoin to receive funds. Remember that this exchange works only for Indians. Although local bitcoin exchanges varies from country to country but the process is same. Once you get registered, you will have a personal wallet address. The senders need to have wallet just like you. All they need is your wallet address.
Remember that the rates keep on changing from second to second. So once you receive bitcoins try to sell them instantly. It is a bad idea to keep them for longer time as the exchange rate may decline at any time. Once sold, many bitcoin exchanges convert bitcoins into your local currency and transfer into your bank accounts. The procedures may vary from country to country.
To send Bitcoins to someone you need to have them in the wallet. Many exchanges may allow you to use Internet banking, debit cards or third-party payment processors to add real money. Later it get converted into Bitcoins. However the rules of exchanges may vary from country to country. Apart from it you can always buy Bitcoins which shows in wallet instantly. You can use the above methods to buy Bitcoins.
There are 3 ways to make Bitcoin payment :
- Scanning of QR code : If your wallet is on other device then you can scan the QR code to make payment.
- Wallet : If your device has wallet option you can directly make payment.
- Manual payment : If any of the above methods fail for any reason, you can copy the bitcoin address and send it manually.
Again these features may vary from exchange to exchange.
Advantages of Bitcoins
- Hassle free transactions : Anyone from any part of the world can send or receive Bitcoins instantly. Unlike other payment processors you can make Bitcoin transactions 365 days a year.
- Low fees compared to all payment processors including PayPal.
- The merchants would not experience any disputes.
- Secured transactions
Disadvantages of Bitcoins
- Despite the global coverage of Bitcoins still there is a lack of awareness in people and businesses.
- Irreversible payments : Once you pay Bitcoins to any person then the payment is absolutely irreversible. So it is better to deal with known or reputed people/business. You can only get the money back when the other person gets convinced and transfer them.
- Bitcoin technology is still experimental
Bitcoin is a wonderful payment system and it is the best alternative to PayPal and Payoneer. The transaction is very minimal compared to all payment processors. The market fluctuates depending on the demand of Bitcoins. The people who have used or using it can share their experiences below. Hope you all like this article.