Why should I use Bitcoin?
As there are no banks or governments involved, below are some of the reasons using Bitcoin is an excellent way to perform certain activities, such as money transfers.
Transfers are directly from person to person - there is no intermediary involved
Fees are nearly zero
There is no monitoring performed or limits imposed by any third party
1) Transfers are directly from person to person - there is no intermediary involved
Normally, to send money to a person you are not physically near, you need to use a bank or other money remittance service to facilitate the transfer. Using Bitcoin to send funds, however, is the same as passing somebody cash from your own wallet.
2) Fees are nearly zero
With Bitcoin, there are no middlemen. This means fees paid to send and receive Bitcoin funds are basically zero, or extremely small. This is a key advantage of Bitcoin, particularly for tiny payments. Bank transfers and credit card payments carry significant fees, making it difficult to effectively send small amounts of money. This limitation can easily affect a business' bottom line.
Due to its ingenious and advantageous structure, settlement fees approaching zero are readily achieved with Bitcoin!
3) There is no monitoring performed or limits imposed by any third party
As Bitcoin does not require banks or third parties to settle payments, the process is faster, paperwork is not needed, and funds can flow freely.
Further, Bitcoin is global - there is no difference in the unit of currency between countries. There are already many stores and websites around the world that accept Bitcoin today, and as Bitcoin increases in popularity, this number will only grow!
Where is Bitcoin stored?
Bitcoin is stored in a digital "wallet". This is similar to your bank account, where you store your yen or dollars.
Anybody wanting to use Bitcoin simply needs to create a digital wallet. That wallet can then be used to store Bitcoin, send, and receive payments.
The identifier for a Bitcoin wallet is similar to an email address. The wallet ID is a long string of characters.
Due to its length, a wallet ID is very difficult to memorize. Therefore, to perform transactions, a shortened ID or a QR code is typically used.
What are the challenges?
Similar to yen or dollars, settling payment in Bitcoin requires both parties to accept Bitcoin. If one or both parties cannot accept Bitcoin, a payment cannot be made.
As Bitcoin is still in the early stages of development and adoption, this is currently a significant challenge to overcome.