As the world continues to usher in the advent and constant evolution of technology, trade and business industry are also largely affected in the process. Currency no longer takes a physical form as digital currency has managed to turn the lives of so many people into a fast-paced and easily accessed buying trend. Purchasing power is more strongly tied to consumers; a fact that reflects the efficiency of using digital money. This phenomenon was also brought forth more prominently through the use of bitcoin, which is the currency for various sales that are available on the World Wide Web and encompasses a wide variety of uses.
Invented by Satoshi Nakamoto who published this invention in 2008, bitcoin is a payment system that diminishes the need for an intermediary when making or receiving payments. As such, a bank or its similar organizations are not required as all transactions can be made in a peer-to-peer fashion. Through the use of a block chain, transactions are recorded in a public distributed ledger after being verified by a network node. The term bitcoin can also cover the use of the public ledger which also uses its own unit of account. There are many reasons why its use is considered the first ever cryptocurrency.
Due to its working without a central repository or administrator, bitcoin is categorized as a decentralized virtual currency by the US Treasury. Even though similar payment systems have existed prior to bitcoin, its large market value has made this digital currency the largest of its kind. The use of bitcoins in purchasing is favored because it is treated as a reward for processing work payment which allows users to verify and record payments using their computing power. This is called mining, a process in which miners are rewarded with transaction fees as well as newly created bitcoins.
When purchasing products, services or even other currencies online, using bitcoins is relatively more preferred, since its fees are lower than that of credit card processors by 2 to 3%. It also imposes the fees on the buyer instead of the vendor, unlike with credit card payments. Despite its users not entailed to rights of refund or chargebacks, bitcoins continue to be used increasingly among merchants. As an acknowledged forced in the area of cryptocurrency, bitcoins can also be used for harmful purposes, where criminal activities involving bitcoins are often centered around black markets where almost everything is available. However, the fact that this virtual currency can provide legitimate financial services cannot be overlooked.