What is Bitcoin?
Bitcoin is a form of digital currency which removes the need to print paper money or mint coins. It is decentralised, meaning that there is no government or organisation that holds any power over it.
The creators of bitcoin are anonymous as buyers and sellers are connected by encryption keys rather than anything more identifiable such as names or IDs. Bitcoin also differs from traditional currencies in that it is not created ‘from the top down’ and is instead ‘mined’ by computers.
In other words, bitcoin is a digital currency that is decentralised and allows both buyers and sellers to remain anonymous.
How to get Bitcoin
There are numerous digital currency exchanges that allow you to purchase, sell, and save bitcoins, such as Coinbase and FTX.
Setting up a Paypal account is the most difficult part of getting started, meaning that it is actually quite simple. Using Coinbase, for example, you may use your bank or Paypal account to put funds into one of the several virtual wallets available. You can then trade conventional currency for bitcoin once your account has been credited, which normally takes a few days.
There are a host of other ways to set up your own crypto wallet, but going through PayPal or Metamask is generally more accessible to most of us looking to get a foot in the door.
What are the risks?
Bitcoin, as an investment and currency, can be extremely hazardous. You know exactly how much a dollar, pound sterling, euro etc. can purchase on a day-to-day basis, but the monetary worth of a bitcoin is more volatile and may vary from day to day and sometimes minute to minute.
Whilst bitcoin transactions are challenging to track back to individuals, it is not entirely impossible. Despite a significant rise in the overall quantity of crypto traders, forensic technologies have enabled the monitoring of transactions and the identification of individuals’ virtual traces across several blockchains. The government has made it clear that it intends to come down hard on crypto-related criminality, and as a result, it is more realistic to conceive of cryptocurrencies as pseudonymous rather than anonymous.
Nonetheless, obscurity can be enticing, especially because firms and marketers are constantly tracking our every transaction, but it has risks. You never know who is selling or purchasing bitcoin from you. Theft is another risk, and there are very few options for obtaining refunds, contesting transactions, or recovering similar losses. Once a transaction is recorded on the blockchain, it is irreversible.
Bitcoin and Business
The primary factor in bitcoin’s success is its independence from governmental regulation. Due to this independence from traditional currencies and the regulations that come with it, digital currencies are immune to bank collapses, hyperinflation, and other economic catastrophes. Yet there is a drawback to this as an absence of regulation can draw criminal and malicious individuals.
Cryptocurrency hacks have increased in frequency recently, but they are not as damaging as financial schemes that syphon off a company’s assets. However, stealing a coin from a decentralised exchange has multiple challenges that many hackers will avoid. Yet, there are instances where hackers have been successful in accessing wallets and exchanges.
Cost of Transactions
Companies that take cryptocurrencies may deal with customers directly or through a broker. Without an intermediary, a transaction’s cost is extremely minimal.
Curiously, transaction charges are only applicable to payments made by other third-party management services. In all other circumstances, accepting money from the applicable cryptocurrency system is possible.
Small businesses, which are very vulnerable to even slight cost variances, may utilise this information to adjust product prices and enhance market competition.
Cryptocurrencies facilitate both local and international business. Many of the restrictions and constraints of international business are gone with crypto, and accepting payments in other currencies is easier.
Whether the transaction takes place inside or out of the country’s borders, it is handled and carried out securely. Because of this, businesses can avoid the challenges of conventional financing while still accepting bitcoin payments from overseas clientele.
Businesses can grow their revenue while simultaneously entering new worldwide markets. It also enables you to trade globally without foregoing a percentage of your revenue or overcharging your items.
The internet is rapidly evolving and it can be easy to feel overwhelmed. Maximist specialises in preparing companies and individuals to make the shift to Web 3.0. If you would like to learn more about what Web 3.0 is and how to get involved, contact Maximist on 0800 059 0116 or by using our contact form.