BitTrader

Bitcoin may be the single most important invention of the lifetime, and that’s saying something. It has opened the doors to so many possibilities that otherwise would have been inaccessible and changed the course of human history. Not once since the creation of centralized currency have the people seen the banking conglomerate be challenged until now.

But again, first things first. To understand how important Bitcoin is, you have to understand what it is. First and foremost, Bitcoin is a currency. It’s like dollars and euros in that way. That’s about the only thing in common between the two. Traditional currency has physical denominations of value. You can reach into your pocket and pull out a dollar bill and a dime. You can’t do that with Bitcoin. Instead, Bitcoin is a completely digital currency that does not have any physical representation. There are several reasons for this, but the one you need to concern yourself with is the fact that Bitcoin is decentralized.

What does that mean? Well, let’s make some comparisons.

When the Federal government decides it needs more money in the economy, it can simply head to the treasury department and print more. It really is that simple. This is what is called a centralized currency. There is a clear central power that has full control over the currency. This power decides when and where money is printed, as well as how much. It’s a level of control that scares people, and rightfully so. There are countless examples throughout history of this backfiring. Bitcoin is the solution to that fear. There is no single entity responsible for the maintenance and production of Bitcoin. Sure, there was the original creator, but that creation was built to be entirely self-sufficient. Bitcoin is produced on a needs-based basis by the Bitcoin system. It’s all done automatically according to certain criteria. There is no man in an expensive suit sitting at a desk, deciding to make Bitcoin.

This is a decentralized currency. There is no power center.

Decentralized currencies are relatively new to the mainstream and might be going to change the banking landscape as people know it. All of the power that banks and banking dynasties have come from the control of money. They have a hand in its creation, how it moves and circulates, and who has how much. With a currency like Bitcoin stripping away that power, the banks are being challenged in a way that hasn’t been seen in human history. There is now a viable alternative currency that is completely separate from the banking system. Put it this way; if everyone with the Bank of America decided to withdraw their money and invest in Bitcoin, it wouldn’t be long before the bank lost all of its influence. That would also lead to a catastrophic recession with unforeseen consequences, but it’s an interesting scenario to think about nonetheless. The fact that, for the first time in history, people have the power to begin dismantling the banking monopoly is incredibly exciting and the very essence of what Bitcoin is.

Bitcoin is a currency, meaning you can buy things with it as well as receive them as a form of payment. There are a few caveats to that, though. Primarily, you can’t use Bitcoin to purchase something at every marketplace. It’s a technology that is slowly being integrated into everyday life. As a result, there are retailers out there that don’t accept Cryptocurrency as payment yet. There is also no physical way to trade Bitcoin, meaning you’re not going to have much luck using it to purchase anything in a store. Shopping online with it isn’t nearly as big of an issue, and more and more stores are accepting Bitcoin every day.

If your buying options are limited, then why would you bother using them in the first place? The answer fits into one word. Anonymity. When you buy something with your Visa card, Mastercard, or Credit card, the bank can see that transaction. It can see how much you spent, when you spent it, where you spent it, and where the money went. There is no privacy. This becomes a significant problem when you consider how much of that information typically gets shared with the government. With the two cooperating, the banks can completely freeze your assets, and the government can even seize your money if it deems it appropriate. Regardless of anything else, that’s your money, not the government. You are entitled to the fruits of your labor. The fact that there is a big bad bully that can take all of that away from you on a whim is exactly the reason people should consider transitioning into crypto. Bitcoin transactions come with none of that police-state behavior. All the transactions you make are secure, anonymous, and encrypted. The bank doesn’t have access to your Bitcoin account, meaning it can’t see every little detail of how you spend your life. As a result of the bank not controlling your account, the government can’t freeze or seize it. This is one of the biggest selling points of Bitcoin and a major factor as to why people are using it.

When a Bitcoin account is mentioned, it isn’t exactly that. There isn’t some Bitcoin website that controls everything that you log onto. Remember, it’s decentralized. When you hear about setting up a Bitcoin account, what you’re looking at is creating a Bitcoin wallet. Your Bitcoin wallet effectively acts as your account. It lets you store, send, and receive Bitcoin. Some even let you purchase or sell it. A Bitcoin wallet isn’t like the leather pouch you have in your pocket. Bitcoin is digital, so naturally, a Bitcoin wallet needs to be a device that can hold that digital information. Things like USB sticks, SSDs, phones, laptops, and more can all be considered wallets with the right setup. There is a bit more to Bitcoin wallets than that. Specifically, there are two different types that you should be aware of moving forward.