Bitcoin banking- A comprehensive guide to Bitcoin

Bitcoin, or cryptocurrency, is a digital currency introduced to the world in 2009 by a developer named  Satoshi Nakamoto. It operates digitally without the influence of any third party and is considered the safest transaction method for businesses. People can trade bitcoin conveniently through software specially designed for its trading. 

As stated by Research Prospect, the value of bitcoin has doubled since its inception. Similar to gold, it is a great way to keep your assets secure. Moreover, it is the most accessible currency, as anyone can buy or sell Bitcoin with a secure internet connection. ‘Satoshi’ is the smallest denomination of Bitcoin, named after its creator. 

How do Bitcoin transactions work?

This Bitcoin transaction is commonly known as the blockchain. There is a nominal fee from Bitcoin whenever any person buys or sells any amount of bitcoin. There are three main kinds of transaction fees in cryptocurrency: 

Wallet Fee

Exchange Fee

Network Fee 

The wallet fee is deducted whenever a person sends money from his wallet to another. The exchange fee is the one which is deducted after the completion of any order of transaction. The network fee is paid to the minors who provide these services to you. 

Coding plays a vital role in storing and transferring cryptocurrency to other users. This fee is Bitcoin’s primary revenue source, just like any other business. 

Are Bitcoin transactions secure?

Bitcoin uses hash algorithms to transfer any amount by providing a unique code that is hard to hack. It is the most secure method for currency exchange until now. However, many cyber-attacks have been made to disrupt the security wall of cryptocurrency. 

All the bitcoin transactions are saved in the network. It is advisable that you use different wallets for various types of transactions to keep a proper record. By doing so, others cannot access your other codes stored in the application. 

Always research the software or service you plan on using either for bitcoin mining or savings. 

How accessible is Bitcoin?

Cryptocurrency is expanding globally. Everyone has the accessibility to bitcoin. Bitcoin is considered the most accessible currency globally as anyone with an astable internet connection and a cellular device can access it without discrimination of race, region, or gender. 

Cryptocurrency is redefining the role of banks by providing the lowest exchange rates, security, and accessibility worldwide. 

How to cash your Bitcoin

You cannot cash bitcoin directly. For that, you will need to find a purchaser on the application that will buy your cryptocurrency and pay in the currency of your choice. By doing so, you can easily withdraw that amount. There can be restrictions, but such a transaction is generally completed within three days. 

If you do not want to sell your bitcoin, keep it in a USB drive wallet as it is the safest form of wallet from cyber-attacks or theft. 

How Bitcoin’s decentralised system works?

According to an article published by Essays UK, a decentralised system doesn’t work with any third party. It has its users and their cellular devices as key players. Hence, bitcoin’s decentralised system gives each user autonomy. 

Unlike traditional banking systems, a decentralised system is excellent for the users’ autonomy as it ensures privacy and transactions can be carried out virtually. Making it hard for hackers to manipulate their systems. 

Moreover, a con that must be discussed here is that such decentralised systems are time-consuming. The user will have to wait a certain period to get the cash.  

What are some pros of cryptocurrency?

There are so many benefits of cryptocurrency compared to the traditional banking system. The following are some of the advantages of using cryptocurrency:

Autonomy: 

It is the topmost principle of cryptocurrency. As mentioned earlier, the decentralised system of bitcoin regulates independently. 

Across-Border Transactions: 

With a few clicks, any user can make peer-to-peer transactions that can be used globally. However, only a few businesses use crypto as a currency for now. 

Transparency: 

All the information about the transactions is stored in the blockchain, making it transparent for users worldwide.  

Security: 

Security is paramount for any banking system. Cryptocurrency offers excellent security measures by using hash algorithms for its users. Hence, making it hard to invade the privacy of users.  

Low Transaction Rates:

The transaction rates of bitcoin are comparatively lower than traditional banking. Some cryptocurrencies have lower transaction fees than others, as their mining has become simpler over the years. 

What are some cons of cryptocurrency?

The following are some of the disadvantages of cryptocurrency: 

Lack Of Regulation:

Since there is no centralised system of cryptocurrency, there is a high chance of ill-legal activities by a specific group of people, such as money laundering. 

Vulnerability:

Since cryptocurrency is a digital currency kept in digital wallets, there’s a high chance of cyberattacks and hackers invading users’ privacy. 

Lack Of Understanding: 

Generally, there is a lack of understanding of cryptocurrency.  People are unaware of the regulation and workings of bitcoin, leading to doubt and confusion. 

Energy Consumption:

Bitcoin minings need a significant amount of energy which negatively affects the environment. 

Legal Issues:

There can be several legal issues regarding cryptocurrency, as there are no legal regulations. Therefore, some countries have banned cryptocurrency. 

Conclusion 

Undoubtedly, cryptocurrency is emerging as a  more legalised form of banking. Several factors may influence the future and trading of cryptocurrency. However, there is much to be done yet to make the general population aware of its exceptional advantages.

The post Bitcoin banking- A comprehensive guide to Bitcoin appeared first on CoinJournal.