Part One - by Ryan Pavlich
What is Bitcoin?
Bitcoin is the world's first decentralized digital currency. Unlike the US dollar, or any existing currency, Bitcoin is transferred directly from person to person via the internet without going through a bank or clearing house. In theory, bypassing banks gives maximum autonomy to Bitcoin users as this money can be sent regardless of borders, holidays or bureaucratic policies.
Bitcoin has the potential to reduce fraud risks for businesses and merchants.
Bitcoin transactions are secure, irreversible and do not contain customers’ secure or sensitive information. Not only does this reduce the risk of fraudulent chargebacks for businesses, it can reduce operating costs and there is no need for PCI compliance.
Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. Bitcoin users can also protect their money with backup and encryption.
An article published by Bloomberg states “[there are] 1,000 People who own 40 percent of the market.” In essence the current value of Bitcoin is heavily influenced by these individuals’ decisions to buy or sell Bitcoin.
Bitcoin is not as widespread or as liquid as other currencies. While there are Bitcoin ATM’s across the world (find a bitcoin ATM) that allow you to buy, sell and cash out Bitcoin, relatively few businesses are currently accepting Bitcoin as payment. (View a list of vendors accepting Bitcoin)
The concept of a decentralized currency, which is not subject to personal politics or borders has the potential to be revolutionary. Although the original Bitcoin controls the majority of the cryptocurrency market share it is not without faults. In addition to the disadvantages listed previously, the Bitcoin is unable to process transactions at the same speed and volume as Visa. In response to Bitcoins' design flaws, alternative cryptocurrencies have been formed and are now growing at a staggering rate.
Look for our second article where Ryan sits down with German Martinez, a bitcoin miner, and talks all things blockchain.