What Are Bitcoins?
According to Wikipedia Bitcoin is a cryptocurrency and an electronic payment system, invented by an unidentified programmer, or group of programmers, under the name of Satoshi Nakamoto. It was introduced on 31 October 2008 to a cryptography mailing list, and released as open-source software in 2009. The great thing about this system is that it is peer to peer, and transactions take place between users directly, without an intermediary such as banks, credit cards or Pay-Pal. So, no fees!
There is no Bitcoin company, no bitcoin building, not even a bitcoin server to shut down – it is completely distributed. That is why it is unique. It is the first time to you are able to exchange value online without the need of an intermediary and the need to pay fees.
For safety sake, these transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain, which uses bitcoin as its unit of account. Since the system works without a central repository or single administrator, the US Treasury categorizes bitcoin as a decentralized virtual currency. It is definitely a transactional currency. It is the payment system of the future.
Bitcoin is often called the first cryptocurrency, although prior systems existed. It is more correctly described as the first decentralized digital currency. Bitcoin is the largest of its kind in terms of total market value – currently it has a value of around Au $1650 (April 24 2017) and is growing fast. It is estimated by experts that it could grow in value - up to $10k in 3 years and even up to $1m and more.
There is a whole industry evolving around Bitcoin. People have made fortunes from Bitcoin. It is backed up by people such as Sir Richard Branson and Bill Gates. Bitcoin is the simplest way to exchange money at very low cost. It can safely be used by individuals, businesses and charities. The advantages of using Bitcoin are:
- Mobile payments made easy
- Security and control over your money
- Works everywhere, every time
- Choose your own fees
- Protect your identity
- Protection against fraud
- Fast International payments
- No PCI compliance required
- Free visibility
- Can be multi-signature
- Accounting transparency
Bitcoins continue to grow in value and since i joined up with this industry 2 months ago they have nearly doubled in value, from one bitcoin being worth Au$1800 to Au$ 3300. Many countries such as Japan and Australia now have approved of it as legal tender. To check out which countries have approved it as legal tender click on this article from Wikipedia, the free encyclopedia on the Legality Of Bitcoins By Country and Territory.
As you can see, the legal status of bitcoin varies substantially from country to country and is still undefined or changing in many of them. Whilst the majority of countries do not make the usage of bitcoin itself illegal (with the exceptions of: Bangladesh, Bolivia, Ecuador & Kyrgyzstan), its status as money (or a commodity) varies, with differing regulatory implications. While some countries have explicitly allowed its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency are likely extend to similar systems as well.
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