In today’s modern and fast-moving times, payments without cash are indispensable. You have probably already made one or two purchases with a credit card or online banking. Since 2009 there has been a new currency called Bitcoins.
What are bitcoins?
Bitcoins are a virtual currency that consists of calculated and encrypted data blocks. The name is made up of “Bit” (smallest storage unit on the computer) and “Coin” (English for coin). Unlike currencies such as euros or dollars, there is no state behind bitcoins.
They are also not subordinate to any credit institution. It only consists of a network of computers and users. Initially, the value of bitcoins was only a few cents. Due to the increasing demand, the value of the Bitcoin exchange has increased in recent years.
Pay with bitcoins
More and more companies are accepting payment through bitcoins. This is not only possible on the Internet. Many shops and restaurants offer this payment option.
To pay outside the internet, you need a smartphone to install a Bitcoin wallet. There is a QR code at the checkout at acceptance points. Now there are two options. For a QR code without a coded amount, the QR code is scanned in with the app. The recipient’s address will then be displayed. Now the amount must be entered either in bitcoins or in euros and can then be sent.
With a QR code with a coded amount, the payment is basically identical with the only difference that you no longer have to enter the amount here, but it is already included in the QR code. Since a specially created QR code is necessary for this variant, it is usually scanned from a tablet or cell phone of the retailer.
Payment with Bitcoins on the Internet can be available in three ways. Either you will be shown a Bitcoin address at the online checkout, which must be copied and pasted into your wallet. Or you will be shown a clickable Bitcoin address that opens your Bitcoin wallet automatically when you click. The third option is that a QR code is displayed at the online cash register, which you can scan again with your mobile phone.
Where can you buy bitcoins?
Bitcoins can be bought at Bitcoin machines or in many eCommerce online. For this, the app must already be installed on your smartphone in order to be able to load the bitcoins onto your wallet. Bitcoins can also be purchased on CFD Trader website.
You can also do bitcoin mining. This means that everyone who uses Bitcoin is also part of the Bitcoin bank. Mining uses certain software to solve complex mathematical tasks. Bitcoin miners receive a certain proportion of bitcoins. In this way, a well-thought-out issue of bitcoins can be guaranteed.
The more miners participate, the more secure the network is because they are responsible for approving Bitcoin transactions. The mining difficulty is automatically adjusted by the network. This depends on the speed of solving these mathematical formulas. Mining is a very lengthy and complex process and also consumes a lot of energy. The high power consumption makes mining on the home computer no longer profitable. Computer networks with computers in which special graphics processors are integrated are often used for this.
Opinions about bitcoins split. While the Bundesbank regards the virtual currency as highly speculative, Bitcoin users praise independence.
Advantages of bitcoins
- The currency is independent of banks and is not influenced by any country.
- It is very easy to use and the network is accessible worldwide.
- Bitcoins are counterfeit-proof because every transaction is verified. Duplicate bitcoins are also prevented.
- The system is protected against inflation because bitcoins cannot be increased at will, but are limited to a maximum of approximately 21 million.
Neither the recipient nor the sender transmits sensitive data. The sender can only be identified if you know the public key. On the other hand, since any number of Bitcoin accounts can be created, anonymous payments can be made
Furthermore, outdated fee systems, such as account management fees, transfer fees, etc. is replaced by minimal fees from which the users benefit.