Characteristics of Bitcoin

I get this question very often, what are characteristics of bitcoin? In this post I am going to answer that question, let us dive in.

Bitcoin has several important features that set it apart from government-backed currencies.

*It´s decentralized

The bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions make up a part of the network and the machines work together.

That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown – or simply decide to take people’s bitcoins away from them, as the Central European Bank decided to do in Cyprus in early 2013. And if some part of the network goes offline for some reason, the money keeps on flowing. Conventional banks make you jump through hoops simply to open a bank account.

Setting up merchant accounts for payment is another Kafkaesque task, beset by bureaucracy. However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable. Well, kind of. Users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information. However…

*It´s Completely Transparent

…bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain. The blockchain tells all. If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address.

They just don’t know that it’s yours. There are measures that people can take to make their activities more opaque on the bitcoin network, though, such as not using the same bitcoin addresses consistently, and not transferring lots of bitcoin to a single address.

*Transaction Fees Are Minuscule

Your bank may charge you a £10 fee for international transfers. Bitcoin doesn’t.

*It´s Fast

You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.

That is it, those are characteristics of bitcoin, if there are more characteristics you can leave them in the comment section below.