Is Bitcoin Fully Virtual & Immaterial?
Bitcoin has become increasingly accepted by the general public and part of mainstream culture. Many new or potential users have questions about how it works and the security of this digital currency.
Many people do not understand exactly how a completely digital currency can be a viable banking and payment method. Although it is almost completely virtual, it functions similarly to other forms of online banking or payment.
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Bitcoin network was first introduced by Satoshi Nakamoto in 2008. However, it is still not widespread. But gained a significant popularity over time and even got registered under the European law. So, Bitcoin-Central can now receive and send transfers to and from traditional banks and also can issue debit cards to its users.
The fear that may arise in bitcoin users’ minds that it may be dangerous to transact using bitcoins could be caused by the 2011 bitcoin hack when the biggest online bitcoin transaction was hacked and theft of 400,000 bitcoins took place. Later the thief filled the market with those stolen bitcoins and the value of a single Bitcoin’s dropped to $0.01. But ironically, it proves that bitcoins are neither unreal nor immaterial. They can only be considered as non-physical. But they have a value and it’s actually a really great value, as the price of a single coin goes up to $700 nowadays.
Bitcoin mining doesn’t involve physical labor and the coins can’t be felt. However, the software of bitcoin has a real and material impact. This shows that bitcoin is both material, as well, as immaterial.
Why Virtual Currency Is Beneficial
Technology is currently growing at an exponential rate. With that comes changes to the way consumers approach daily activities. It once made sense to have physical coins and bills as the most commonly accepted form of payment.
However, this is no longer convenient with the advent of smartphones and credit cards. The global economy has also struggled to remain stable. Consumers have desired a way to manage their money without it being tied to the government or big business.
After its creation in 2009, consumers instantly became intrigued by the concept of a currency that was controlled by their peers. The concept of being able to pay for anything virtually through a quick mobile transaction also captivated consumers, themselves fed up with the inconvenience of material credit and debit cards. They could easily be lost or stolen, and were prone to fraud.
Bitcoins and Virtual Wallets
Bitcoins are sent and received to secure, virtual Bitcoin wallets. They are completely protected by digital signatures. This makes the transactions extremely secure. In fact, Bitcoin transactions are far more secure than many traditional forms of banking.
There is no exchange of material currency. Each Bitcoin has its own digital code. Each transaction is processed through a Bitcoin mobile app or computer program. There are many advantages to a fully digital currency. There is no risk of losing your money or having it stolen from you, especially with Bitcoin’s high-strength security features.
Transactions are processed extremely quickly through the digital network. There is also no need to carry around physical forms of payment, allowing you to travel lighter. Society, as a whole, also saves valuable time, money, and resources that would typically be used to create physical currency.
In a way, Bitcoins are similar to credit cards or online banking in their level of virtualization. Just because you do not physically have access to your money does not mean that it is not there. Bitcoins cannot just disappear. Once they are in your virtual wallet, they will stay there until you choose to make a transaction and send them to someone else.
Even though this concept may seem strange to those who have only ever used physical forms of payment, after a few uses, it becomes apparent that Bitcoin is very safe and convenient.
Are There Physical Bitcoins?
Although Bitcoin is intended to be completely digital, there is a form of physical currency associated with it, called the Casascius coin. These coins are embedded with digital bitcoins and a ‘key’ that enables the user to send them directly to their wallet.
However, these coins have proved to be inconvenient. Most users prefer to use the Bitcoin mobile app or online computer program, the way the currency was intended to be used.
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