What is Bitcoin? Internet’s digital money explained

If you are a regular user of the internet who is not living under rock over the past few months than chances are that you have already heard of Bitcoin. The new online network that aims to become the digital currency of the Internet. So what exactly is Bitcoin and how is it relevant to you, your online presence or your business? If that’s the question you are wondering about then you have come to the right place as we are going to answer all those question and tell you what exactly it is about.

So the first question that needs to be answered is that what is Bitcoin?

According to the official website it is the first ever ‘decentralised’ peer-to-peer payment network. That means Bitcoin does not involve any central authority or middlemen and is controlled by the users of the Bitcoin network. In simple words it is the cash for the internet or virtual tokens that enable users to buy services and goods just like real money from places that are part of the Bitcoin network. While you can use Bitcoin like the real money online one thing that differentiates it from dollar or any other currency is that it is semi-anonymous. This means that there is no easy way of tracking it back to the buyer or the seller who accepted it. This particular characteristic of Bitcoin makes it popular among those who are pro-privacy and those who don’t want to be tracked by the authorities including drug dealers etc.

How much does a Bitcoin worth?

So if Bitcoin is the money of the Internet than how does it compares with the real money of today? To find that out we will need to use the Bitcoin calculator using which we can find out the Bitcoin exchange. As of right now the 1 Bitcoin or BTC as it is called in short is equivalent to 110.5 USD. The rates of this online currency just like any currency of the ‘real world’ keep on changing. Not too long ago 1 Bitcoin was worth $250 and before that it was even worth only $7.50, which makes it rise and fall unpredictable.

Below is a chart that shows the ups and downs of the Bitcoin exchange.

How to convert Bitcoins

There are money Bitcoin Calculator services that allow users to convert different real world currencies into Bitcoin and know the current Bitcoin exchange rate. Some of them include Preev, CoinMill and BitcoinExchangeRate.

Anonymity of the highest level…

In real life as well as on online payment services such as Paypal when you send or receive a payment to or from your friend or client it is traceable back to you because the bank or Paypal act as a middleman. Since there is no middlemen in the Bitcoin world it is very hard to track the transfer or money. Whenever you send someone money through Bitcoin it is sent through its P2P system that directly goes to the person without going through any other  agency.

How does one pays with Bitcoins?

Bitcoin payments are made through the wallet application that is available for both smartphones and computers. If you are a seller then you can receive payments in Bitcoins without even having a merchant account. To send anyone money through this service users just have to give recipient’s address and enter the amount he or she wants to send. That’s it. The Bitcoin wallet applications also support QR code scanning as well as NFC, which allows users to share their unique address with others simply by touching the two phones together.

As of now the Bitcoin currency is accepted by limited number of online businesses however that is changing rapidly as new businesses are supporting this service. The reason for its rapid growth is that there’s no transaction fee, which makes it free to use – something that makes Bitcoin attractive to small businesses.