What are similarities and differences between bitcoin and conventional currency ?

Related image

Bitcoin is a cryptocurrency that works on peer-to-peer approach. Peer-to-peer exchanges allow individuals to transfer currencies from their accounts to the accounts of others without having to go through a financial institution. 



Elimination of a third party or a financial institution enables instant transactions without fees being charged on transactions taking place between two individuals. The record of transactions or transfer of assets is maintained in a decentralized ledger called Blockchain. Independent individuals and companies who own the governing computing power and participate in the Bitcoin network, also known as miners, act as decentralized authority enforcing the credibility of Bitcoin network.

This digital currency is created through a process called minning which involves using computer power to crunch transactions that creates Bitcoin units. Basically Bitcoins are created as reward to minning which is a recordkeeping service done through the use of computer processing power. It means one cannot touch or hold Bitcoins; they are created, accessed, stored and used electronically.
If we compare Bitcoins with conventional currency it holds some similarities with it. Such as economists define money as a store of value, a medium of exchange and a unit of account and they agree Bitcoin has some way to meet all these criteria. Moreover, like conventional currencies Bitcoin is hard to earn, limited in supply and easy to verify; the characteristics that further establish its authenticity as a digital cash. 



Though Bitcoin owes few similarities with conventional currencies, there exists a fundamental difference between both types of currency. Unlike conventional currencies which are regulated and governed by institutes and governments, Bitcoin is based on peer-to-peer cash system marked with absence of any third party’s involvement in cash transactions. It means it is free from government control and banks cannot charge you for using it to make transactions. 

The popularity of Betcoin is associated with a surge in its value which allows individuals to turn their investments into massive sums overnight. Many people warn investors to be cautious as it may deflate at any time.  

Post a Comment

4 Comments

  1. Bitcoin is a virtual currency. It doesn't exist in the kind of physical form that the currency and coin we're used to exist in. It doesn't even exist in a form as physical as Monopoly money. It's electrons - not molecules. eroiycoin.com

    ReplyDelete
  2. Even though modern medicine has come a long way, in today's world we are all coming to terms that natural treatments are much more beneficial for our bodies as there are no side effects. More and more natural treatments are being used to help patients with illnesses. Cannabis Seeds Canada

    ReplyDelete
  3. Bitcoin is a cryptocurrency, a form of electronic cash. It is a decentralized digital currency without a central bank or single administrator. However, you can also invest in commodity and stock market to earn a high profit with the help of tips of our advisory company. You can visit us at: http://commodityonlinetips.in/

    ReplyDelete
  4. Bitcoin is a digital currency is created through a process called mining which involves using computer power to crunch transactions that creates Bitcoin units. Bitcoin is based on peer-to-peer cash system marked with absence of any third party’s involvement in cash transactions. However, you can trade in commodity and stock market with the help of our advisory company tips that are highly profitable. You can visit us at: http://100mcxtips.in

    ReplyDelete