The local currency of each country is controlled by a central government, that essentially decides when and when not to print money. Values of currency are slowly turned in to fiat currency or “faith” currency since it is no longer based on gold standards. Global debt values more than double the actual total currency in circulation. These scenarios points to a global economic catastrophe where the only solution is a digital decentralized net based currency or an E-currency. The concept of an E-currency is immune to inflation and national economic maneuvers. These gave rise to the first decentralized currency system called “Bitcoin”.
How does Bitcoin work ?
Bitcoin is an e-currency which could be acquired through actual purchase through PayPal or secured credit card facilities with minimal fees. This will represent the first exchange which involves a third party client like PayPal and the credit card bank that accepts some fees for the service. The Bitcoins can now be used to purchase online products like games, e-books, products, membership etc, in over a million Bitcoin accepting stores and merchants. Bitcoins gained by the merchants may be used in turn to purchase from their suppliers and pay their talents for services rendered. In the real world, the transfer of currency will entail several fees and taxes in the process. The use of Bitcoin as a decentralized currency is not governed by any tax laws in the world. Massive cash transfers may be subject to bank account freezing for investigation but Bitcoin wallets are immune to freezing. Payments from one person to another especially if drawn to pay for services and labor is heavily taxed in normal currency, paying Bitcoin to a recipient is tax free and safe.
The Bitcoin industry and its cyber-economy are continually monitored and innovated. Attacks on the integrity of the system is continually being experienced thus algorithm software is developed to protect the Bitcoin economy using mathematical statements and algorithm plugged in each Bitcoin user CPU. To make use of these useful information, a third party program is used known as a Bitcoin miner which passively earns Bitcoins from the data mining explorations done in one’s PC. Concerted Bitcoin mining pools may be used by a group of Bitcoin users to mine faster but with lesser payout values. Know more about Bitcoins from this site: Idiotsguidetobitcoin.