Various questions come up in the mind of new traders who decided to give prominent cryptocurrency exchanges and digital currencies such as Litecoin, Ethereum, and Bitcoin a go.
Follow along as we take a closer look at the questions asked and how regular monies compare against crypto coins.
What backs it up?
Standard currencies – The products and services associated with known currencies as well as the institutions who issue the currencies
Digital currencies – Products and services and the consensus of all users.
Who governs it?
Traditional currencies – Central banks
Crypto coins – Computers and mathematics around the world.
What is the cost to initiate an international transfer?
Regular monies – As much as 2 to 3 percent of the cost of the total transfer.
Digital monies – Just over a dollar.
How long does an international transfer take?
The traditional way involves several days.
Bitcoin transfers happen in a matter of minutes.
Can it be charged back?
Traditionally a reversal gets made once someone disputes a payment
Using Ethos and other such currencies, once you completed the transaction, it may not be edited or reversed in any way as every part is recorded securely.
Is it a physical commodity in that you can touch it?
Traditionally as the currency is in a printed form, you can have it in your hands and touch it. If you want more, then the banks will just print more notes.
Ethereum and Bitcoin are digital in nature and is limited to a specific amount so no more can be made.
More Info on Bitcoin
Blockchain ensures that various transactions conducted are safer. However, limits placed on traditional currencies like pounds and dollars would slow down the process of selling and buying. What is more, it costs to transfer regular, and it involves a lot of time for it to be approved, which equates to wasted time and money. Businesses are not keen on losing money. But, who is?
Bitcoin is not the same as in traditional currencies. They are not controlled by a central authority such as the banks. Instead, powerful PC get to solve complex math puzzles and mine coins over time.
Unlike traditional coins for which banks can just print more, there are a limited number of Bitcoin produced. Apparently, only around 21 million will exist, and a small number of new coins get mined every hour.
Also, the rate at which they appear will slowly be reduced until there are no more of this left to be mined. All this is made possible thanks to the blockchain. The Bitcoin chain would keep a record of how much each person who decided to trade with this commodity has left. This information is securely shared around the world.
It is not possible to alter your records and state that you have more Bitcoins that you actually have on hand as the blockchain cannot be fooled. It keeps an accurate record of what you possess due to regular updates.
What makes it secure is that only the folks who joined the chain would have access to the available blocks and able to see the data. Some would just be given permission to view a limited amount of info within the chain.
The integrity of any particular transaction can be monitored as the Bitcoin network is open.
Transfers are more private as no identity checks are required. The moment someone submitted a transaction, the network protocol would go through the previous records of that currency to check if the sender had sufficient Bitcoin and permitted to send it.
For some of you, it might sound shady, but in actual fact, having a unique wallet serves to identify users so that law enforcement can use it to track users if so required.
Additionally, most transactions that take place need to have an identifier logged with the transfer as required by law. Furthermore, it is recorded on an open network, which makes it less ideal for potential hackers.
It involves quite a process to undo a transaction as these cannot be reversed. The only way to pull it off is to fulfill the identical transaction in the opposite direction. In this case, both transactions can be fully tracked within the chain for everyone to see. Aspects like what we discussed over here make Bitcoin an extremely secure way to conduct trade.