What is Bitcoin?
It is probably clear to everyone that bitcoin is a kind of crypto-currency, but hardly anyone knows about its main features:
No centralized command
There is no one who owns the currency. Being an average customer you are able to compare it with email. Email can be received or used by anyone, but there is no a central company that commits control over the process. The transactions made in bitcoins are irreversible. The fact implies that no other structure starting from the government officials and ending with banks is able to control the process of sending or receiving the currency. On the one side, the mechanism of bitcoin operation is well-set and gives a huge freedom to its users. On the other side, there is no a representative to whom you can send a complaint about your money loss or transfer delay. The situation seems to be similar to cash money, which you shouldnâ€™t give away to the first got passer. Moreover, the situation is more complicated than it goes with cash, as bitcoin is dependent on the internet.
As soon as the currency is out of central control it becomes submitted to you and companies collecting private keys and offering bitcoin wallets for spending the money. As soon as private keys are required for spending bitcoin, you need to choose the most reliable wallet ever for escaping undesired consequences related to money losses. In case with bitcoin the wallets act like banks that undertake to store your confidential data while holding your keys â€˜in their pocketsâ€™. Having decided to get one of the wallets, donâ€™t forget that you shift the responsibility for your money to a third party. That is why there are wallets that give the clients an opportunity to keep the keys themselves. Moreover, for those bitcoin owners who have already achieved a great amount of currency will be more reasonable to divide the sum of money between several wallets to insure against additional risks.
Supply and demand are the main features used for determining the price of everything in the material world. Being an advanced customer or bitcoin miner you know that the amount of bitcoin is limited and makes 21 million. It follows that the bigger amount of bitcoins is demanded the pricier it will become, as the total amount is limited. As soon as the number of people using the currency grows faster, the price will increase as well.
Inasmuch as the currency is related to dollars it can be easily exchanged by any owner. Actually, there are several ways you are able to make it when there are only a few tested and verified possibilities. Different banks can present light prices differences, as the policies of the banks are varied. Also it is not recommended to make an exchange through a wallet and to make it through your personal as you should have a total control over your funds.
It isnâ€™t 100% anonymous
Although the currency is stated by many security experts as the best way to pay for outputs anonymously, the statement has been already argued. As soon as all the bitcoin transactions are saved on the blockchain, your identity can be clarified through the time of the transaction, which is registered there. Different companies offer special mixers for enhancing privacy level, but it requires a huge amount of additional time and effort. Therefore, computer professionals suggest running a VPN service for bitcoin. The service is known for the ability to hide an authentic address and to use a VPN serverâ€™s address instead. This gives any client a chance to shift a virtual location also. For example, while being on a business trip you are able to transfer or exchange bitcoins through a public hotel Wi-Fi absolutely secured, because all your data is routed through a secure tunneling and is thoroughly encrypted. The tunneling is created with the help of up-to-date protocols such as OpenVPN, L2TP, PPTP and etc. Experts consider L2TP and OpenVPN as the most reliable protocols, but while applying them your internet speed can be vividly reduced, which can disturb your network operation. The most important fact about VPN service providers is that the staunchest of them assure the clients to store no logging or metadata and accept payments in bitcoins, which enhances your chances to stay anonymous online.
Transactions without substantiation
The thing is that any of bitcoin transactions is opened to the entire internet for a few seconds and after registered on the blockchain. There is a possibility that the transaction wonâ€™t be accepted by the next block. Also the fact that the process is super fast and canâ€™t be compared with any other transactions can cause some fundamental troubles to your wallet. Fortunately, specialists assure that the technology is to become more and more reliable with each day while gaining a greater extent of popularity.