Businesses can benefit greatly from using Bitcoin. Bitcoin is a digitized form of currency as a modern way to process transactions online. There are four components that make up this network, one of them being its software. The software is an open-source project which means that it can be modified and changed for different purposes.This programming influenced different versions of Bitcoin to be made with similar software. Another element of Bitcoin is its accessibility. Anyone who has access to a computer is able to use it as it is recognized globally.
The network does not have anyone who is in charge and manages the website so users are free to use Bitcoin with no limitations which banks may have. Subsequently, Bitcoin is a secure way to make transactions. As this uses a private network when processing transactions which are known as a “blockchain”, this ensures that information cannot be altered without other blocks being altered as well, similar to an accounting ledger. This can be viewed at any time and is shared publicly. This automatic system establishes information correctly and is able to work without management. Finally, it uses a brand of digitalized coins. This showcases a unit of value as Bitcoin is used as a currency system.
Some benefits of using Bitcoin is that it is a safe and efficient way to make transactions with anyone around the globe. This currency has a low collapse risk as it operated online. Contrasted in governed currencies which can go through hyperinflation or entirely collapse, potentially damaging an individual’s savings. This network has a low inflation risk in comparison to other currencies. The rate of purchasing power decreases by a few percent per year due to the government printing out more money which lessens its value. Using Bitcoin eliminates the risk of fraud.
127 our experts are availableright now
This form of currency uses military grade cryptography for reliable transactions. This is significant to a business as it is almost impossible to defraud this network which means that there is no risk of losing money through fraudulence. According to Geoff Gordon, “in 2012, over $21-billion in payment fraud occurred in the U.S. alone” (G. Gordon). Additionally to this, Ivan Raszl states, “this is a clear benefit in many areas of the world because governments that are supposed to guard against fraud are actually defrauding people by taking their savings partially or fully” (I. Raszl).
Therefore when using this network, organizations are unable to trace where the funds an individual has comes from eliminating fraud deception. Using Bitcoin also helps to avoid unnecessary fees which are associated with credit cards and current banking systems. When transferring a large sum of money, there is no transaction fee that corresponds to both smaller and larger transactions. The current transaction fees in the conventional payment system is an issue as they could be of equivalence or of higher value than the amount being transferred. Transfers are also validated quickly which is vital for situations where a business needs to receive a payment before a due date. In Bitcoin, it is an individual process to take part in and do not need to go through approvals or restricted from certain transfers.
Some downfalls of using bitcoin are that once a transaction is made, it is irreversible. This is due to fraud associated with dispute mechanisms. This protects an individual’s savings in a bank but results in making fraud easier. Bitcoin is also easy to lose as which in the aforementioned, once something is lost in this network, it is gone for good.Unlike banks where if a credit card is stolen or one’s bank account is hacked, there is compensation which is able to be made by the bank. Using Bitcoin is not an effective payment method as of now as it is not accepted everywhere.It is mostly used as an investment instead of a way of purchasing items.
As this system is still new, there may be huge flaws in the network which are not visible yet, as other systems like banking have been around for decades and the benefits and risks are known. Using Bitcoin can jeopardize the relationship a business has with its bank. As this system is very private, a banker is unable to know businesses accurate financial statements. As they are not fully aware of who they are carrying out business with, they will not want to associate with that business in event of illegal activities.There is an increase of Bitcoin users and this network is continuing to pursue a popular payment system which businesses are investing in. Overall, there are fewer risks associated with using Bitcoin than conventional payment options.
