What Is Bitcoin? What Are Its Qualities? – Deltec Bank knowledge series.

September 05 19:16 2019
What Is Bitcoin? What Are Its Qualities? - Deltec Bank knowledge series.

Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.

Bitcoin is a decentralized digital currency. It operates without a central bank or a single administrator overseeing its functionality. Users can send information to others on its Blockchain network without engaging with an intermediary to complete a data transfer.

Each transaction on the Bitcoin network receives verification by network nodes using cryptography. Users can transfer these coins to each other as a transaction, or computer users can accept them as a reward for mining activities by verifying the peer-to-peer requests that come their way.

The Essential Characteristics of Bitcoin

The primary characteristic of Bitcoin that makes it a popular tool to use is the fact that it operates according to its own rules. No one, including the founders, can influence control over the system. Because it is decentralized, it can work all over the world free of the whims of others.

There are some additional characteristics of Bitcoin that make it the most popular cryptocurrency currently available.

1. It provides the foundation for secure transactions.

The encryption techniques used with Bitcoin combine with its decentralized design to create a highly secure platform for information transfer. It offers better security than cash for a financial transaction. This option is also free of political influence, such as demonetization policies.

2. Bitcoin is relatively anonymous.

The wallets that hold Bitcoins and other cryptocurrencies use a complex string of characters that require a private encryption key to access. That means operators can mine, send, or receive coins without revealing their identity. Third-party venues can facilitate an exchange as well, although users who use the latter option often require ID documents and credit card information to create an authentic profile.

3. There is an increased level of transparency.

The entire ledge is continuously checked and maintained for consistency by the whole mining network. There is no way for Bitcoins to disappear with this structure. Users have no way to double-spend their currency either, and this quality of the cryptocurrency also makes it impossible to make a false claim of non-payment. Anyone can check the records that the Blockchain maintains.

4. It operates on the principles of scarcity.

Bitcoins have value because they follow the basic marketplace principle of supply-and-demand. There are only 21 million coins that the network can ever create. The cryptocurrency cannot be printed or changed either, which means there is a specific guarantee of value for users. If more people want to start obtaining them, then the value of each token rises.

5. Information transfers happen rapidly with Bitcoin.

The network processes information transfers almost instantaneously. It usually takes less than a few minutes for someone to receive their cryptocurrency after the initiation of a transaction. It is possible to send a payment to someone anywhere in the world in this timeframe, whereas it could take several days for a regular bank transfer to complete.

Bitcoin is often looked at as the future of financial transactions because of its unique qualities. It is a borderless solution that anyone can access thanks to Blockchain technology.

Disclaimer:  The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.

About Deltec Bank

Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.

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