Bitcoin is a peer-to-peer electronic cash system that is decentralized in nature. No central authority issues govern or control the bitcoin currency. The bitcoin network is entirely based on blockchain technology that uses cryptographic protocols to make the bitcoin network fault-tolerant data. The value and user adoption of bitcoin have grown tremendously in the past few years. Many websites and retailers have started accepting bitcoin payments. But in reality, there are two sides to a thing. If there are merits, there must be demerits as well. You can get more information from here aboutmanchester.co.uk and can become a champion of bitcoin currency.
Let us gain about the merits and demerits of bitcoin in this article.
The best thing about bitcoin currency is that it doesn’t involve intermediaries to govern or control the network. No governments or financial institutions are required to complete or approve the transactions. The deal is done between only two parties, that is, sender and receiver. This is why funds settlement is done immediately between the users as the transactions are irreversible, and once a transaction is initiated, it can never be refunded.
Fewer Chances of Identity Theft
The most imperative feature of the bitcoin network is that it is anonymous. All the transactions that are carried out are entirely anonymous. No personal details or information of bitcoin users are required to complete the transaction. Many people required user anonymity to carry out safe transactions, and users who want to initiate transactions under the government’s eye are benefitted from this feature.
This is also helpful in preventing identity theft. Unlike debit/credit cards, bitcoin uses a push mechanism in which a sender can initiate a transaction and send bitcoins to the receiver.
Protection From Fraud
Bitcoin is a digital currency that is designed and based on blockchain technology. To get the transactions verified, there are special individuals known as miners that solve complicated algorithms to verify the transaction and record it on the blockchain ledger. Bitcoin is a currency that uses cryptographic principles and complex algorithms to complete the process of transactions. This makes it impossible for hackers or scammers to counterfeit the transactions or data.
People were quite disappointed by using fiat currencies to make international transactions because transactions took several days to complete. The creation of bitcoin has provided people an easy way to initiate and get international transactions completed at the earliest. Another best thing is that users aren’t required to pay any additional fee to complete the transaction. It takes few hours to complete the international transactions. With this advantage of bitcoin, international trade has increased.
Bitcoin is based on blockchain technology, and blockchain uses cryptography to secure the bitcoin network and avoid counterfeiting. Strong security is provided to the bitcoin network, and no fraudster can attack or manipulate the blockchain’s ledger. Unlike fiat currencies, only a limited number of bitcoin could ever exist, i.e., 21 million. Bitcoin currency was created to promise to provide a high-security payment method compared to traditional currencies.
Scams and frauds
Bitcoin is a digital currency, there are more chances of cyber-attacks, and it is technically difficult for new issues to understand about bitcoin’s security concerns. The increased popularity and value of bitcoin have encouraged scammers and fraudsters to develop fake apps and websites to take control over bitcoin users’ money. In the last decade, thousands of reports have registered scams of frauds related to bitcoin currency.
The main demerit of bitcoin currency is that its market is highly volatile, and there are wild fluctuations that take place in the value of bitcoin. After the FBI declared bitcoin as a legitimate currency, its value reached its peak, and when a security breach took place in Mt. Gox exchange, there will be a high fall in the value of bitcoin. Because of its price volatility, people think of it as a scary investment.
Miners verify the bitcoin transactions. Once a bitcoin transaction is initiated, and completely, it is impossible to refund or revert back the transaction. Bitcoin is a computer code, and no intermediary is involved, and this led to irreversible transactions.