Most people have heard of the term Bitcoin but do not have a clear idea of ​​what it really is. Simply defined, Bitcoin is a decentralized, peer-to-peer digital currency system designed to give online users the ability to process transactions through a unit of digital exchange known as Bitcoins. In other words, it is a virtual currency.

The Bitcoin system was created in the year 2009 by undisclosed programmers. Since then, Bitcoin has attracted a great deal of attention and controversy as an alternative to the US dollar, the euro, and commodity currencies like gold and silver.

A private network of computers connected by a shared program is used to carry out transactions and process payments in Bitcoin. The creation of Bitcoins is based on increasingly complex mathematical algorithms and its purchase is made with standard currencies of national money. Bitcoin users can access their coins with their smartphones or computers.

As a new and growing virtual currency, Bitcoin has certain distinctive advantages over conventional government flat currencies. Here are 5 benefits you will enjoy when using Bitcoin

1) Tax number

When you make purchases using dollars, euros, or any other flat government currency, you must pay an additional sum of money to the government as tax. Each purchasable item has its own designated tax rate. However, when you make a purchase through Bitcoin, sales tax is not added to your purchase. This is considered a legal form of tax evasion and is one of the main advantages of being a Bitcoin user.

With zero tax rates, Bitcoin can come in handy, especially when buying luxury items that are unique to a foreign country. Such items, in most cases, are subject to heavy taxes by the government.

2) Flexible online payments

Bitcoin is an online payment system, and like any other system of its kind, Bitcoin users have the luxury of paying their coins from any corner of the world that has an Internet connection. This means that you could be lying on your bed and buying coins instead of having to travel to a specific bank or store to do your work.

Also, an online payment via Bitcoin does not require you to fill in details about your personal information. Therefore, processing Bitcoin transactions is much simpler than those made through US bank accounts and credit cards.

3) Minimum transaction fees

Exchange fees and costs are an integral part of standard wire transfers and international purchases. Bitcoin is not monitored or moderated by any intermediary institution or government agency. Therefore, transaction costs are kept very low unlike international transactions carried out through conventional currencies.

On top of this, Bitcoin transactions are not known to be very time consuming as it does not involve the complications of typical authorization requirements and waiting periods.

4) Hidden user identity

All Bitcoin transactions are discreet or in other words, Bitcoin gives you the option of user anonymity. Bitcoins are similar to cash-only purchases in that your transactions can never be traced back to you and these purchases are never connected to your personal identity. In fact, the Bitcoin address that is created for user purchases is never the same for two different transactions.

You have the option to voluntarily disclose and publish your Bitcoin transactions if you wish, but in most cases users keep their identities secret.

5) Without external interventions

One of the biggest advantages of Bitcoin is that it eliminates third party interruptions. This means that governments, banks and other financial intermediaries have no authority to stop user transactions or freeze a Bitcoin account. As mentioned above, Bitcoin is strictly based on a peer-to-peer system. Therefore, Bitcoin users enjoy greater freedom when making purchases with Bitcoins than when using conventional national currencies.

Digital currencies like Bitcoin are comparatively new and have yet to undergo any major testing. As a result, many feel that there are certain risks involved in using Bitcoin. Regardless of Bitcoin’s potential downsides, it is clear that its merits are strong enough to make it a legitimate competitor to challenge mainstream currencies in the not too distant future.