Cryptocurrency is becoming more and more integrated into everyday life: using it, you may pay a bill in a cafe or buy goods in an online store.
We have gathered comprehensive information about the difference between bitcoin and traditional currency, the reasons why a casual person needs it and the first steps in the field of digital currency. If you are just looking to buy bitcoin and don't know how to use it — this article is for you.
Bitcoin: what is it?
Bitcoin is the decentralized system based on the principle of direct exchange between users, as well as the first and the most popular cryptocurrency.
The bitcoin system is designed in such a way that there can be no more than 21 million units in it, also called "bitcoin". One bitcoin is divided into 100 million parts called "satoshi" (after the creator of bitcoin Satoshi Nakamoto).
The decentralized blockchain system underlying bitcoin provides users with a completely clear and secure register of all transactions in the system. Thanks to this, you can track the history of any payment, it will never be deleted from the database.
Other advantages of bitcoin:
- It has no control center that can freeze an account, block or cancel a payment;
- It is anonymous as the address and account number in the system are not linked to the account holder, and no documentation is required to open an account.
At the same time, bitcoin as a currency unit has all the properties of regular money: it is divisible, reliable, limited in supply and liquid.
The importance of bitcoin in today’s world
Today, bitcoin has proven itself as a competitive alternative to regular currencies and traditional financial instruments. Major companies like MicroStrategy and Tesla intensively invest billions of dollars into bitcoin. And in several countries such as El Salvador and the Central African Republic bitcoin was made their national currency.
Why do different countries use bitcoin?
The reason why the aforementioned countries have adopted bitcoin as an official currency is simple — they are aspiring to become more independent of foreign national currencies, such as the US dollar. It is especially relevant for developing countries that are more vulnerable to market changes and inflation risks.
By adopting bitcoin as an official means of payment, these countries become part of the global economy and are less affected by local market conditions or economies of other countries. In addition, bitcoin allows businesses and individuals to participate in the financial life of the country without relying on traditional banks and financial service providers.
Why do companies use bitcoin?
More and more companies are using bitcoin as support for a diversification strategy.
For instance, MicroStrategy, which provides business analytics, has the largest investment volume in bitcoin — the company has approximately 125,051 BTC on its balance sheet. According to MicroStrategy’s CEO Michael Saylor, bitcoin provides reliable storage and money growth in the long-term better than any other asset, including gold, and it will actively resist the negative effects of the inflation.
However, there are other reasons why companies are accepting bitcoin payments more often. These reasons are:
- Opportunity to receive instant payments from any point of the world;
- No middle-men in the payment process;
- Companies collect and share fewer data about their customers;
- Saving money on transaction and banking fees;
- No chargebacks;
- Attracting a broader range of customers and gaining an advantage over competitors.
Benefits of bitcoin for a casual person
Like companies that utilize bitcoin as a countermeasure to inflation, regular people can do the same thing — accumulate cryptocurrency and increase their savings more efficiently.
Furthermore, the utilization of bitcoin, especially as a payment currency, gives other benefits as well:
- Using bitcoin to buy goods and services will allow you to stay anonymous when paying: bitcoin transactions do not contain any personal data and do not require 3rd party services to execute the payment.
- Paying for goods and services with bitcoins is much faster and cheaper than wiring money internationally through a bank or money transfer services. Bitcoin transactions are instant and cost close to nothing to execute.
- Bitcoin enables you to own a permanent, unseizable asset and allows you to be personally responsible for your own money without depending on banks or other financial institutions.
What do you need to get involved in bitcoin?
Becoming part of the bitcoin community is simple: all you need to do is create a wallet, buy bitcoin and start storing it.
1) Creating a wallet
To create a wallet, you need to register on Green Crypto Pay service and get Merchant ID as well as private key: they are necessary for authorization.
After creating the wallet you may start generating payment addresses for your customers. To do this, you need to specify: your Merchant ID, currency and URL for sending notifications about the status of transactions.
You may generate new payment addresses for each order and transfer them for payment — Green Crypto Pay service will track receipts to payment addresses for an unlimited time.
2) Replenishing the wallet
You may send the required amount of cryptocurrency to the necessary GCP wallet address to replenish it, as well as receive payments in cryptocurrency directly to your payment addresses by connecting the GCP API.
3) Storing and securing bitcoin
It’s important to remember that the Merchant ID and private key (which is the only thing that can allow access to bitcoin that the wallet stores) are necessary for authorization, so their safety is extremely important. Do not forget to keep backup copies of credentials in several places, never share this data with anyone and beware of phishing.
4) Withdrawal of funds
Once the cryptocurrency is in your wallet, it's up to you what to do next. You can spend it to buy various goods and services since bitcoin is accepted by many vendors, shops and services. Thanks to Green Crypto Pay, any online business will be able to connect crypto payments as well as withdraw bitcoins from the GCP wallet in full or in part to any other wallet.
Today, using bitcoin, you can purchase goods and services in many parts of the world and even buy real estate and pay taxes in some countries. The undeniable benefits of bitcoin make it a reliable and extremely prospective currency which you should definitely pay attention to.