Bitcoin digital currency

There are some who say that Bitcoin,the latest invention of the internet is just a fad, and others who see it as the next big thing. Is it really a scam? The answer to that depends on how you perceive money making in the cyber world. Here is a basic description of how Bitcoin works.

Like any other form of currency, Bitcoin can be purchased in cash, bank or even fiat money. When someone decides to purchase some bitcoins they do so by purchasing their desired amount in cash. A contract then exists between the buyer and seller, or the buyer of the bitcoins, and for each step of the process, the buyer pays a fee to the seller for the service rendered. However, these fees are more than offset by the increase in value of the bitcoins. After a period of time, if no one wants to make use of the bitcoins, the seller will either get rid of them and use his fees in an entirely different method of exchange, or the coins can be turned into cash, and the entire transaction is complete. In this case, the fee is spent, and the seller gains. This is the essence of the “money making” aspect.

If one decides to trade the coins for something like purchasing a new laptop or even another set of clothes, he still has to buy it. But if he uses his bitcoins he can sell it at the spot price. There are some instances when people actually transfer the coins directly to their wallet and use them to pay for what they want, not having to go to a counter and deposit the money. They actually get the service that they wanted without any payments being made or additional fees levied. The seller then gives the seller’s services or bitcoins.