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Finance

Bitcoins, should you use them?

Bitcoin was launched as a private initiative in 2009. Unlike traditional currencies, such as the Euro, law and the dollar, it is not controlled by a central monetary authority. Instead, it is backed by a network equal to the computers of its users. This is similar to how Skype, a video chat service, operates.

The basic value unit is Bitcoin. However, each Bitcoin can be subdivided into Sanoshies. A Satoshi is equal to one hundred million a bitcoin (ie, a bitcoin divided to eight decimal places).

Bitcoins and Sanoshies can be transferred from one Internet user to another to pay goods or services at a virtually zero cost. This allows you to make international transfers without having to be lost with the exchange rates and the onerous bank charges. Bitcoins can be purchased and sold by traditional cash in special exchanges.

Bitcoin Wallets

To use Bitcoin, you need a wallet, a special piece of software in which you store, send and receive Bitcoins. There are three types of wallets, software wallets, mobile wallets and web wallets.

The software portfolios are installed on your computer and give you full control over your wallet. Mobile portfolios are installed on your smartphone or tablet and allow you to use Bitcoin for daily transactions in stores and supermarkets by scanning a rapid response code (QR). Web portfolios are located on the World Wide Web, that is, they are a form of storage in the cloud.

Payments that Bitcoins use are super easy. You can make wallets on your computer or smartphone, simply by entering the address of the receiver, the amount and then pressing Send. Smartphones can also get the address of a receiver by scanning a QR code or by bringing two phones that contain almost field communication technology (NFC), a radio communication form, close to each other.

Receiving payments is so easy … All you have to do is give the payer your Bitcoin address.

Protecting your wallet

A Bitcoin wallet is like a cash wallet. To reduce the risk of loss, you must keep only small quantities of bitcoins on your computer or smartphone and maintain most of your bitcoins in a safer environment, such as a wallet without connection. Whenever your wallet has been encrypted, an offline backup will allow you to recover your wallet, your computer or smartphone should be stolen.

Encrying your wallet allows you to establish a password that must be entered before the funds can be withdrawn. However, the recovery of a Bitcoin password is impossible if it is lost. That’s why you need to be absolutely sure you can remember your password. If the value of your bitcoins is significant, you can store the password in a bank dome or wherever you store important roles.

To be as safe as possible, you must store offline backup copies in several locations using various media, such as USB flash drives and CDs.

Because Bitcoin runs on the software that downloads your computer (PC or laptop) or smartphone, you must update this software regularly to keep your wallets and transactions safely.

Advantages of Bitcoins

Bitcoins have several significant advantages:

1-You can send and receive unlimited amounts of money instantly at any time towards and from anywhere in the world.

2-Processing does not cost any fees or only very small rates.

3-Bitcoin transactions are irreversible, which protects sellers from fraudulent charge returns that are becoming more common with credit cards.

The 4 payments are made without the exchange of personal information, which provides a strong protection against identity theft.

5-The process of receipt and payment is completely neutral, transparent and predictable.

Disadvantages of Bitcoins.

However, the use of Bitcoins has several disadvantages:

1-They are not yet universally accepted and, therefore, can not be used everywhere.

2-Its value is volatile because the number of bitcoins in circulation is quite small, so that relatively small transactions can affect their price significantly.

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