This form of payment, which was introduced in 2009, has a decentralized administration and is used all over the world. It is an online method of payment that was first introduced by Satoshi Nakamoto. The method is common among the younger generation and does not operate with any intermediary, like a bank. Therefore, the method used to verify the transactions is by the use of nodes that are noted down and distributed by a block chain. The fact that it does not need any intermediary has led to the treasury in the USA to classify it as a decentralized virtual currency. It is the first of this kind and the largest of its kind too in value.
They can be used to pay for both goods and services, and many business people are now accepting them as a form of payment. It is important to note that as long as you are using bitcoins for your transactions, you are not protected by the refund or change-back laws. Many criminals are also using them which has attracted attention from banks and law enforcers, as well as the media.
The unit used in the system is Bitcoin with the symbols BTC, XBT or B. There are also other smaller units such as milibitcoin (Mbtc), microbitcoin (µBTC) and Satoshi. The Satoshi is the smallest unit of transaction, named after the founder of these coins.
While transacting using this method, you can choose to pay the transaction fee or not, only that paying a small fee makes the transaction go faster. Paying the fee also means that the transaction will be listed on the block chain sooner than those who have not paid anything. The amount you pay will be determined by the number of units you are using for the transaction.
A wallet is a storage place for information that will be used in the transaction. Therefore, a wallet is a place that you store all the credentials for the bit coins, and it also gives you access to your coins and transact with them.
The method of payment is easy to follow as it is done online. It is also secure since it has been designed using complex encryption technologies. Moreover, it is open to anyone and at any time, and it is quite cheap since you will not need to pay any fee for the transaction.