We have always used the dollar bill and other types of currencies as a medium of exchange for buying and selling products and services. These formal currencies are controlled by the respective central banks and other regulatory and monitoring authorities. So in the case of cryptocurrencies, the medium of exchange is done through an electronic form. There is no physical movement of paper currencies as it happens in the case of dollar bills and other conventional forms of receipts and payments. There are some unique features and differences when it comes to cryptocurrencies. This is a recent addition to payments and receipts. It’s still in its evolving stage and not many people are aware of the finer points of this medium of exchange for commercial transactions. We will try and gain some basic knowledge about crypto currencies because experts believe that it might become a major form of exchange medium in the years and decades to come.
What Are Bitcoins
Before getting into some basic information about bitcoins,we need to understand that crypto currency is the generic name for this form of exchange. Bitcoin is the brand name of a cryptocurrency and over the years, it has become the most powerful form of unconventional currency. There are a few salient features that make bitcoin different from dollar bills and other types of localized currencies. First and foremost, those who use bitcoins are the ones who create it. It’s created using some complex computer language and is stored in a digital form in the computers. This digital currency is used to make payments andto receive payments when a purchase or sale happens between two entities.
What Makes It Different
There are some unique differences when we compare bitcoins with other classical forms of currencies. The biggest difference is that there are no monitoring agencies like central banks. Therefore, many people wonder whether this is a legal form of currency and whether the loss of land will be applicable for any transaction done using this form of currency. Another unique feature is that it’s used digitally for transactions. There is no physical movement of money as we know yet. The users keep a record of their payment and receipts in a centralized database and the same is available to the buyers and sellers for verification and other purposes.