The Reality Of Bitcoin - Religion or Technology?
By now you’ve probably heard that bitcoin is the digital currency used to make payments in digital form. Bitcoin was first released in 2009 as an open-source, decentralized digital cash system that could be used anywhere. However, it soon became clear that this centralized system was simply the tip of the iceberg. As more users and issuers of digital coins (called miners) began through their mining program, the value of bitcoin rose sharply. This triggered an initial explosion of new bitcoins being created and circulated every day. Today, there are approximately $180 billion in circulation in all. Many people have become interested in using bitcoin as a medium of exchange because they believe it will act as a store of value. But what is a store of value other than Bitcoin? If you’re reading this article based on your interpretations of “store of value” and “digital currency” then congratulations! You are one step ahead of the blockchain and ready to learn about Bitcoin as an alternative way to pay for things with credit or debit cards. In this article, we will explore the reality of cryptocurrency and its implications for society at large.
What is a Currency?
Currency, in the context of this article, is money or any other medium of exchange used as a medium of exchange. It is not intended as a store of value.
Why Is Money Buying Processioned Through CRYPTO?
It’s easy to get stuck into the “why” of cryptocurrencies and blockchain technology. The “how” is much more interesting.
The Benefits of digitization in Business & Industry
Back in the day, when machines and humans were still in contrast, large businesses used money as a medium of exchange. Today’s businesses rely on digital assets like digital bills, digital credits, and digital charges to function.
Cryptocurrency Use Cases
These days, almost all transactions take place over the internet – meaning that almost no single entity controls or owns any particular portion of an account. The digital assets on an account are all “bundles” of digital assets that are linked and owned by all of the parties to the transaction.
Disadvantages of Fiat Currency
As the number of digital coins in circulation grows, so does the risk of inflation. A rising number of digital coins could cause central banks around the world to issue paper money with increasingly high interest rates. This could hurt consumers in several ways:
Decreased ability to buy certain goods and services.
Increased risk of bank runs.
Decreased ability to use credit or debit cards in certain places.
Conclusion
The rise of digital currencies has been quite significant and provides a new way of payment. These new forms of payment are often digital, and are not affected by inflation. The same can't be said for fiat currency. Although the act as a medium of exchange, fiat currency is still subject to powerful economic forces.
Digital currencies like Bitcoin can help solve many of the issues that fiat currencies face, such as:
Transparency in the system.
Accountability of issuers.
Predictive action based on information.
Conclusion
In summary, the rise of digital currencies has many potential benefits for society, including:
Increased ability to pay bills.
Increased ability to store and manage your money.
Improved security.
More choice in products and services.
More confidence in government as it can issue its own money.
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