Everything You Need To Know About BitCoin And Other Crypto-Currencies
Bitcoin represents an innovative type of digital currency that lacks a physical form. It exists only in the electronic realm, where it's both generated and held. The BitCoin network doesn't have a centralized control system either. No one issues this currency; it's created by a worldwide network of computers, the processing resources of which are devoted to solving math problems with the use of specialized software. BitCoin is the first, pioneer crypto-currency that has given rise to a wide range of other digital coins.
What Other Popular Crypto-Currencies Are There?
As of mid-2017, there are over 700 different crypto-currencies collectively referred to as altcoins. Their creators tried to modify and improve the BitCoin algorithms, while retaining the industry-standard P2P network. Although some of the news coins are very easy to mine, many of them lack high liquidity or fail to retain value. As of today, the most trusted and promising alternatives to BTC are:
- LTC (LiteCoin). One of the first altcoins to emerge after the success of BitCoin. It's distinguished by a faster rate of block generation, which results in faster confirmation of transactions.
- ETH (Ethereum). Often referred to as a game changer, this crypto-currency can boast of the highest market capitalization after BTC: almost $4.5 million.
- XMR (Monero). This crypto-currency is focused on absolute privacy of transactions, decentralization and scalability.
- XRP (Ripple). A worldwide network for low-cost payments conducted instantly on the international scale. This digital coin doesn't require mining and has a market capitalization of almost $1.3 million.
- DASH (Digital Cash; known as DarkCoin until spring 2015). In comparison with BTC, this currency offers enhanced anonymity.
Keep in mind that no altcoin can compete with BitCoin in terms of trust, popularity, user base and market capitalization. However, some of the alternatives are tailored to cater to specific needs of their users, providing a few advanced features and solutions that are superior to what BTC can offer.
What Are The Advantages Of Using BTC And Other Crypto-Currencies?
Both BitCoin and alternative coins offer unique opportunities as compared to the traditional forms of money. However, they represent a recently created and relatively untested means of payment, so new BTC users are recommended to carefully consider both risks and benefits. The later include:
- Full anonymity for users;
- No intermediary third-parties;
- No taxes on the purchases you make online;
- Transaction fees are super-low or even zero;
- Availability to any person that has Internet access.
Illegal Uses Of Bitcoin: Are The Rumors True?
BitCoin is a form of money, and money has always been used for both legal and illegal purposes. In fact, cash, credit cards and the modern banking system are utilized for financing crimes much more often than BitCoins. The digital currency can introduce major innovations into the payment systems, and the benefits from these innovations are believed to be much more significant than any possible shortcomings.
The nature of BTC suggests it's a big step forward in terms of ensuring security of funds. The digital coin can actually be used as a decent protection against a range of financial crimes. For instance, it is absolutely impossible to counterfeit BitCoins. In addition, the user has full control over his payments and cannot accept unconfirmed bills, as it happens in credit card schemes. BTC transactions are irreversible; therefore, it's impossible for scammers to demand their money back. The BitCoin system protects its users from thefts and losses with the help of powerful mechanisms, such as encryption and multiple signatures.
How Do I Spend BitCoins?
One could say that sending a payment with BitCoin is very similar to sending an electronic mail. You send the required amount of the digital coins to a BTC address in a similar way to sending messages to business partners. What customers like about paying with their BTC wallets is that you don't need to provide a ton of personal information to the merchant, unlike other payment methods require. If you order physical goods, you only need to indicate your name and address for delivery purposes. Even less information is necessary when your purchase is digital goods: as a rule, an email address will suffice. The BTC payment information may vary a bit, depending on the type of your wallet. Typically it includes a BTC address or a QR code.
What Can You Buy With BitCoin?
In the past several years, an enormous number of merchants – from small enterprises to retail giants – have demonstrated progressive thinking by starting to accept BTC as a means of payment. Although about five years ago it was a tricky challenge to find a non-shady BTC-accepting store, today new options are literally mushrooming. The quickest and most convenient way to find a seller of the necessary type of goods that supports BitCoin payments is to visit a dedicated marketplace or aggregator website.
Some of the popular purchase categories include:
- Internet and/or mobile services: telephony, hosting, web development;
- A vast range of physical products: from pizza and wine to clothing, jewelry and art objects;
- Online goods: music, games, gambling, all kinds of software products;
- Traveling and leisure: train and plane tickets, hotels and other accommodations, restaurants and cafes;
- Professional services: from legal consultations to home repairs and maintenance.
As you can see, the range of goods and services available to those who own a crypto-wallet with a decent amount of BTC in it is virtually no different from what other forms of money can buy. And as the value and popularity of crypto-currencies grow, it's going not to shrink but to further expand over the next several years.