Bitcoin is a form of digital currency – a new form of money, essentially – that is tradable throughout the world. It is not an official currency, however, which means that it operates without the involvement of banks or clearinghouse.
Bitcoins can be transferred between individuals or between businesses to pay for goods and services, all without the use of a bank, so the fees for that exchange are lower. Bitcoins have all the desirable properties of a money-like good. They are portable, durable, divisible, recognizable, fungible, scarce and difficult to counterfeit.
Advantages of Using Bitcoin:
Some of the advantages of using Bitcoin over another online payment network, such as PayPal, or even your bank, are:
- It can be used in any country without the need for currency conversion
- Sending money to a business or individual costs less per transaction
- There are no limits to the number of transactions you can initiate each month
- Your account cannot be frozen or suspended
- Transactions are irreversible, unlike PayPal payments
- You can keep Bitcoins in a digital wallet that is accessible from your phone, tablet, or computer
Several of these advantages exist because there is no central governing authority, as there is with a bank. Of course, that may also be a disadvantage. Bitcoin is still considered “experimental,” even by the organization itself, so be aware that there are also risks involved in accepting Bitcoins in place of cash.
Where to Get Bitcoins:
There are only a few ways to obtain Bitcoins:
- You can purchase Bitcoins at an online exchange
- You can obtain them from an individual who has them
- You can accept Bitcoins as payment
- You can earn them by supporting the process of verifying transactions in the Bitcoin system, called mining.