Bitcoin is a form of digital money or virtual currency. It was introduced in 2009 and has gained a lot of popularity.
You can store bitcoins in your digital wallet on your computer or mobile and send them through the internet to any other person and he can use it to purchase any commodity. There has been a gradual increase in the list of commodities available to purchase by bitcoin.
The transfer occurs between two individuals without passing through any bank or ACH(Automated Clearing House). Currency exchanges let you exchange bitcoins for standard local currency. Depending on the market the value of bitcoin keeps fluctuating.
Accepting credit cards online typically requires long procedures of security checks to ensure and guarantee compliance to the PCI Standards. Bitcoin security is built in such a way that makes this method obsolete. This E-commerce technique does not uses any kind card or account rather it makes use of NFC code or QR Code of your wallet.
The generation of bitcoins is called mining by solving a mathematical problem. The bitcoin network is secured by individuals called miners and they verify transactions using an algorithm. The bitcoin is encrypted in a way that prevents it from being copied(Cryptocurrency). Every bitcoin transaction is recorded using a Block Chain. This is one sort of a ledger and is encoded on the bitcoin itself preventing to use the same bitcoin more than once.
To become completely dependent on something so unpredictable is perhaps not the wisest option but using cryptography provides a high level of security.
Interestingly, the real identity of Satoshi Nakamoto, the creator of bitcoin is still unknown. Bitcoin not being tied to any political/financial system or any government makes in invulnerable to any economic collapse.
How does bitcoin mining works?
Mining is the process of offering your computer system’s power to process bitcoin transactions and also secure the bitcoin network.It is also a method to generate new bitcoins. Bitcoin mining provides the miners with a reward of some bitcoins in exchange to the work done by them to maintain a secure payment network. The mining software “senses” for initiated transactions and performs required tasks to process, confirm and secure these transactions. For confirming new transactions they need to be included in a block i.e. the ledger along with the solution of the mathematical problem. Such solutions are very hard to generate because they are to be solved hit and trial method trying thousands of calculations per second. Miners are required to perform these calculations which causes a delay of around 10 minutes for the transaction to complete. In exchange the miners are given a share of newly created bitcoins.
Advantages of using Bitcoin:
- Freedom to carry out transaction everywhere, anytime - One can send any amount of money to long geographical distances in no time on all days of the year. The Bitcoin network does not even shuts down on holidays.
- Minimal fees - Bitcoin cryptographic security allows transactions to be processed with no fees. Even if the users are charged, the amount is very low. Users may have to pay slightly higher amount for carrying out faster confirmation of your transaction.
- Control over your money/Protection against fraud - Bitcoin users are imparted with full control over their transactions. Until you are going by the steps to protect your wallet, Bitcoin renders control over your money and a strong level of protection against fraud. No annoying charges can be applied as occurs in case of other payment methods. Bitcoin payments are made without asking for the user to enter any personal information like credit card or account number. Bitcoin transactions are secured by high level cryptography offering guard against repudiation or spoofing. In fact, it is even possible to complete a transaction successfully without even revealing your identity. Bitcoin also includes a multi-signature feature which allows bitcoins to be spent only if a group of people agree and authorize the transaction.
- Transparent and neutral - Many organizations require you to keep a record of the accounting documents corresponding to all transactions. However, all information about the Bitcoin network transaction is readily available on the block chain to verify and use.
We know very well how Bitcoin works and our team have integrated bitcoin payment on multiple websites. It really make sense to integrate bitcoin as a payment method in your website as it is emerging as a future online payment standard globally.