One of the most discussed topics in banking and finance is cryptocurrency. The first, most important and most popular is Bitcoin. For many, it is simply synonymous with the word “cryptocurrency”.
What is Bitcoin?
Cryptocurrencies are accounting systems or, more simply, virtual currency that is used only in electronic form. National (fiat) currencies, such as the US dollar, can be both electronic and physical. We can convert them into cash whenever we want. Cryptocurrency is only in electronic form.
As we live in a digital world, we use cash less and less. We use electronic transactions to purchase most products. So whether you buy a dedicated server with BTC or USD, the difference to you as a user will be negligible. You use a different app, a different password, and that’s it.
Since this solution is new – it was created only a few years ago – the value of cryptocurrencies can change significantly. Due to their young age and many unknowns, they react more strongly to various events than other currencies, commodity prices or corporate stocks. They are particularly subject to changes in demand, supply, regulations and safety issues.
Today, many people use cryptocurrencies as a method of transaction without involving banks or other traditional financial institutions, such as VPS Bitcoin Payment. However, cryptocurrencies are not guaranteed by governments, so users risk losing their money if a cryptocurrency platform goes bankrupt.
Bitcoin was created in 2009 by an unknown author known as Satoshi Nakamoto. It is based on exceptionally advanced cryptography and a P2P (peer-to-peer) exchange network, i.e. disintermediation. You can buy a dedicated server with BTC and do other electronic transactions in a simple, fast and secure way.
How is cryptocurrency produced?
Gold has to be mined and processed, cash has to be minted or printed, how about cryptocurrency? The creators of Bitcoin were inspired by gold, the way it is obtained and its function in the economy. Therefore, the process of creating cryptocurrency is called mining, and the people who produce it are called miners.
Anyone with a computer can get Bitcoins. At least in theory. You can simply get Bitcoins using your computer’s computing power. The cryptocurrency creation system works like a kind of perpetual motion machine. It takes the work of computer miners to carry out Bitcoin transactions on the network.
There is a catch, however, as the chances of the average person mining a coin worth several thousand dollars are slim. To do this, you need the computing power of a whole farm of powerful servers, mainly adapted for this task. Business is risky: expensive equipment, large electricity bills and unstable exchange rate.
Interestingly, the authors included a smart mechanism that regulates the excavation. Well, the more miners try to get digital coins, the harder it is. When mining groups cease their efforts, Bitcoin becomes easier to mine, thus encouraging new miners to take action.
Advantages of cryptocurrency
The main advantage of cryptocurrency is its ease of use. With a VPS Bitcoin Payment, you pay the hosting provider directly without intermediaries. When you pay in fiat money, there are significant currency conversion costs.
In addition, when you buy a dedicated server with BTC, it is immediately transferred to the account of the hosting provider, regardless of the country in which you transact. You can be sure that your server will be up and running in minutes and you can start building your website right away.
Transaction cryptocurrency is extremely safe and more secure than transfers with fiat money. Nevertheless, there are reports of bitcoins being stolen or lost, but not on a scale comparable to the daily hacking of traditional bank accounts or theft of payment cards. Making a VPS Bitcoin Payment is safer than buying it with your credit card.
Bitcoin has a defense mechanism against inflation – its resources will only increase to a limit of 21 million. It will take many years to reach this barrier. It is impossible for additional printing cases to occur, which is known from the modern experience of states.
And finally, the main advantage of bitcoins for many – they provide reliable anonymity during transactions. No one can track your VPS Bitcoin Payout. This reassures those who look with horror at subsequent reports of violations of the privacy of Internet users by government agencies in many countries.
Disadvantages of cryptocurrency
With the growing interest in Bitcoins, numerous educational sites aimed at promoting the advantages of the virtual currency have mushroomed. You can read reliable information about the strengths of using Bitcoins, but the negative aspects are often overlooked.
They are worth watching because it is about money. The fact that bitcoins are in no way controlled by financial institutions or a central bank is both an advantage and a disadvantage. No state guarantees its stability and value by its authority. This makes the course of cryptocurrencies extremely susceptible to speculation.
Many experts believe that Bitcoin is another speculative bubble that will burst. Among those who share this opinion is Alan Greenspan, the former head of the US Federal Reserve System. You can note that the biggest competitors of cryptocurrencies are representatives of authorities and financial institutions. Cryptocurrencies are their competition.
When we look at Bitcoin charts, we see a picture of a risky tech startup: an incredible rise fueled by the massive enthusiasm of the online community, and then a sharp crash that almost halves its value due to the decision of the authorities. A big increase – from 18,000 to 60,000 in 2021, and again to 16,000 at the end of 2022.
Uncertainty is not good for business. Hosting providers that accept cryptocurrency decide to take this risk. When you buy a dedicated server with BTC, you pay its current price, but it can lose drastically overnight, surpassing the profitability of the enterprise.
There is no state control
Another drawback of cryptocurrency is its attractiveness to all kinds of criminals. Anonymity, speed, and lack of oversight by government and international agencies make Bitcoins popular with illegal businesses. Unfortunately, where there is freedom for honest citizens, criminal organizations benefit in the big league. It is a harsh truth that we have to accept.
A charity that cares for the homeless can buy a dedicated server with BTC because they accept them as donations, but so can a criminal who distributes illegal content. And in the second case, there will be no way to track them. The widespread use of Bitcoin by criminals is preventing governments from developing cryptocurrencies.
Cryptocurrencies may end up being just a nice utopian idea, which is impossible to implement in practice, because states will not agree to lose control over money circulation. At this point we come to philosophical and political science issues. There is a question of the legitimacy of the existence of states and borders.
Although the ideology and assumption of Bitcoin is about lack of control and equal global means of payment, we must not forget that we live in a divided world. Every state must provide social welfare, public order and security to its residents, but on the other hand it is financed by taxes.
Nation-states have the challenge of adapting to the ongoing changes in the blurring of the boundaries of the global world.
Some states recognize Bitcoin as private money and allow limited transactions. In some, people can not only buy a dedicated server with BTC, but even pay taxes. Many countries tax cryptocurrencies as financial instruments but deny them legal status. Each country has different regulation which makes it difficult to use on a global scale.
Bitcoin in e-commerce
How can Bitcoin transactions be used in online trading? What do you need to make a VPS Bitcoin Payment? The first step is to set up a wallet to collect them – you can do this using a website or an app. The next step is to buy BTC, and that’s it; You are ready to purchase your hosting services.
How does it work when you are a hosting reseller and want to buy VPS Bitcoin Payment? You need to embed a micropayment module with Bitcoins on your website. Until now, many such services have been created, which are very similar to long-known solutions such as PayPal. The most popular ones are BitPay, BIPS and BTC Merch.
Bitcoin has many positives and negatives behind it and an uncertain future ahead. The future is difficult to predict; some think it will become a global means of payment, while others predict collapse and bankruptcy.
Currently, cryptocurrencies are developing. More online stores are introducing cryptocurrency payments; You can buy dedicated servers with BTC and many other services. Governments are also looking for ways to regulate the status of cryptocurrencies.
The group of opponents and supporters of cryptocurrencies seems equivalent. But most people are waiting to see if Bitcoin will take hold in the global economy. Then it will be time to evaluate whether cryptocurrency is the main cause.