Bitcoin is one of those things that in the past several years has created a lot of buzz around the globe. Be it Brexit, or Donald Trump as the new US president, or India demonetizing their currency, dramatic economic events can be viewed in terms of Bitcoin.
In this beginner’s guide to Bitcoin, you will learn all of the basic, yet essential stuff related to Bitcoin.
There are many ways by which you can understand what Bitcoin is. Let me explain it to you with the help of an example.
Today, let’s say you need to send money from India to the U.S.A. You use your bank wire transfer service or services like PayPal or Payoneer to send money.
For such money transfers (remittances), you end up paying a lot of fees:
- Currency conversion fees.
- Service fee to the bank for keeping a record of your money & ensuring safety.
- - If you’re using a payment gateway such as Stripe, 2Checkout, PayPal, or any other, you will pay transaction fees. Some of them also deduct conversion charges
Technically, you are paying money to the bank for securing & transferring the money on your behalf. In reality, everything is monitored on a ledger (bank records) & money is just transferred digitally from one account to another.
This is not like the physical delivery of goods; money is not moved physically. However, even though it’s digital, we pay a large chunk of the transfer amount (2% to 10%) as “service” fees. Let’s say you transfer $100 from one country to another, anything between $2-$10 is given up because of these fees.
Even though everything is done digitally, why are you losing so much money? Well, this is how banks & remittance services like PayPal and Payoneer have been mining hard earned money from users like us.
But there’s a solution to this problem of cross-border transactions (aka remittances):
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