What is the bitcoin Transaction Cost?
There are several misconceptions about what are bitcoins and why they are becoming so popular as time goes on. A person might hear about bitcoins and learn about how this virtual currency works and its benefits, but many people also have no idea what the value of this digital commodity is or where it comes from. bitcoins are the units of account that are used to trade throughout the world in exchange for United States Dollars.
The concept of using this digital commodity as a payment system started about four years ago. At that time, there were very few currencies available on the global marketplace and most countries were based on gold and silver. In terms of money, there were only two standardized currencies that worked across the globe, the U.S. dollar and the British pound. When the Internet became popular around the time of the dot-com boom, people wanted a way to exchange one currency for another, and the first way they thought of was through the use of gold and silver.
As the Internet grew, people also wanted a way to make secure transactions without having to wait on a bank to approve the transaction. At that point in time, the only way that people could transact with each other was through the traditional monetary system using checks or wire transfers. Block chain technology was also starting to become popular and was implemented into the electronic payment systems. Transactions were now sent via the block chain and this was how transactions were secured. Transactions were now sending information back and forth between computers instead of between individuals and institutions.
With this new technology in place, there was a need to find a way to pay transaction fees to the miners that would actually add the transaction into the block chain and further increase the number of transactions going through at any given time. Since there would be no central authority that controlled the process, there were going to be some problems that could arise. With that in mind, the idea was born of a way for users to spend their money online without having to pay transaction fees to the network. This is where the concept of an alternative form of payment came about.
The creation of the bitcoin protocol marked the beginning of what can be considered a financial revolution. All of the early adopters saw the potential to profit off of one of the most underutilized sources of energy. They saw a way for regular individuals to profit from the electric current that was being used to power the Internet. Even though the 21 million dollar figure has been cited in the past, this represents the total amount of all the transactions that have taken place since the inception of the bitcoin network. The price has fluctuated over time but has stabilized at around four hundred dollars.
There are many uses for the bitcoin protocol and the most common use right now is the use of a bitcoin wallet to facilitate online transactions. A wallet is used to keep personal and private information separate from each other so that if there is a mistake, nobody is able to access it. Transactions can be made with the use of a traditional internet connection and the built in feature of the block chain makes it impossible to be hacked into or blocked by a third party. The blocks of the transaction are also assigned to a specific computer, which ensures that no two computers will have ever made a transaction with the same key.