There are different elements that are giving the world a 180-degree turn for the better in a variety of aspects; take the digital currency bitcoin, as the perfect example of this statement. This particular currency is currently causing quite a buzz around the globe. There is no news media outlet that has not mentioned it. Presented on the market in 2009 as an open-source software by an individual or a group of people that utilized the alias Satoshi Nakamoto, it has little by little been able to garner this worldwide attention, and it does not appear like this is not going to change anytime soon.
Bitcoin vs. Traditional Currencies
Bitcoin can be best described as a currency that does not have physical presence as bills or coins do. You cannot withdraw bitcoin from an ATM machine. To some individuals, this is a grand downfall, but others tend to see it from a different angle. At the end of the day, bitcoin can aid one in the same way as traditional currencies, such as to make purchases. Just as it is with money that is in someone’s bank account, depending on the expenses and transfers that are conducted, the amount of this currency decreases or increases from the account.
Besides not being able to touch a bitcoin, the two major differences between bitcoin and traditional currencies is decentralization and the fact that it is beyond the control of any financial institution, or government entity, whether it be private or state. The U.S. dollar is controlled by the Federal Reserve, while the Euro is controlled by the European Central Bank, but bitcoin is free from the control of a governmental entity.
How Is Bitcoin Controlled?
Through peer-to-peer exchanges is how bitcoin is controlled. This structure has made it impossible for an authority to be able to manipulate its value or cause rise by creating more quantity. Its production is solely valued on the demand and supply, but it is important to note that this currency has a fixed limit of 21 million coins. Many experts have to come to the conclusion that this will be reached by 2030. Of course, this is just a prediction and thus cannot be considered a guarantee.
Stores Keep Jumping into the Bitcoin Wagon
In this day and age, there are now numerous online stores that are integrating the digital currency bitcoin as a payment method, including overstock.com, expedia.com, and wordpress.com. The total number of stores around the globe that accept this payment method has been noted to be over 100,000. There are some experts who have gone as far as to say that bitcoin is going to become the go-to currency in the near future.
One can anonymously purchase merchandise utilizing bitcoins. Compared to other options on the market, since its coins are not subject to regulation and are not tied to a country, international payments are cheap and easy to conduct. Since there are no fees associated with this type of digital currency, more and more businesses are opting to accept it as a form of payment because there are no credit card fees associated with it.
Bitcoin: The Go-to Cryptocurrency for Millions
At the moment, there are approximately 2.9 to 5.8 million users around the globe who have a cryptocurrency wallet. Even though there are a lot of different cryptocurrencies available that one can take advantage of, the majority of these users are opting for bitcoin. The reason behind its popularity is due to its simple structure and the gains that one can obtain from it. Compared to other traditional payment systems on the market, it comes accompanied by more than a handful of advantages.
The Most Bitcoin-Friendly Countries
There are some countries in the world that are being referred to as bitcoin-friendly, as they are testing this type of cryptocurrency and opting to utilize it at a rapid pace through different mediums. Some of these countries are Denmark, Estonia, United States, Sweden, South Korea, Netherlands, Finland, Canada, United Kingdom, and Australia. Out of all the users previously mentioned, the majority of users are from the United States, which is not a grand surprise because this country has always been looked up by other countries when it comes to how bitcoin should be handled.
No Trace Left Behind
Even though an extensive search has taken place in order to find the creator(s) who created this digital currency, nobody has been able to succeed. There is no trace to follow just as there is no trace left behind when one utilizes this type of currency. There are some users who see this as a positive thing and thus have taken advantage of it, while others, such as identities in power, see it as a danger to society.
Skepticism Is Present
There are a lot of people around the globe who still do not grasp the concept of having money that they will never get to actually touch with their own hands. It goes without question that there is skepticism present. There are some men and women who go ahead and give it a shot and thus have come out to be winners, especially if they opted to invest on it. A lot of individuals who opted to invest on bitcoin before it skyrocketed in popularity are now millionaires. They did not listen to those who were telling them that it was going to be a waste of time. These traders went on with what they felt, and at the end, they came out as winners on the market.
In 2017, the price of bitcoin augmented into the thousands. One of the reasons why this occurred is because people started to find out that it requires no banks in order for transactions to take place. At the moment, there are many more individuals who are trying to get rich by trading bitcoins. People just opt to buy bitcoins as an investment, waiting for them to go up in value before selling them.
Australian Banks Fear Bitcoin
It has been mentioned throughout different mediums that banks in several countries are afraid to do business with bitcoin companies. The National Australia Bank made news in 2014 for closing the accounts of businesses that had a link to bitcoin. After this, other banks in Australia opted to do the same, and thus, it has caused the Australian Competition and Consumer Commission to get involved. These businesses found it unfair that their accounts were closed due to their currency preference.
U.S Banks Welcome Bitcoin
On the other hand, banks in the United States think very differently than a lot of banks in Australia. For example, Bank of America has mentioned several times that it believes bitcoin will become a major payment player in the eCommerce industry to the point of becoming a serious competitor to common money-transfer providers.
In 2014, a bank in Boston became the first one to instantly convert deposits to bitcoin, without charging a fee. Since then, there have been more banks in the United States who have opted to do the same, as they know that in order to keep on being the go-top option of the population, they have to move along with whatever is occurring on the market.
If we look back in time, banks have always moved forward. Travelers checks by American Express came into play in 1850, charge cards in 1928, air travel cards in 1934, and then credit cards in 1958. Banks have always found a way to become a link, one way or another with anything that deals with new financial aspects, and they have not failed in doing so. Just as previously mentioned, there are some banks that see the bitcoin wave as too much to keep up with, hence why they do not want to deal with it. Others see it from a different perspective and are going to do everything in their power to work around it in order to benefit from it as much as possible.
Where to Purchase and Sell Bitcoin
There are different marketplaces that permit one to purchase or sell bitcoin utilizing a variety of different currencies. These marketplaces are often referred to as “bitcoin exchanges“. There is Coinbase, as well as Bitfinex and Bitstamp. Even though these marketplaces guarantee safe purchases and sells of bitcoins, this is not always the case. In 2016, Bitfinex was hacked and thus bitcoins worth millions of dollars were stolen. This has raised concerns on a lot of people, hence why these marketplaces are implementing updates in their security measures in order to prevent this type of issue from occurring once again.
Besides hacking matters, there is another concern present in the minds of people right now: It is not insured by the FDIC. Simply referred to as a digital wallet is where bitcoins are stored, which exist in one’s PC, or in the cloud. This type of wallet is often called as a virtual bank account that permits users to receive or send bitcoins, as well as save money or pay for purchases. There have been instances when users have accidentally deleted or have lost their bitcoins, and unfortunately, they have not been able to recover them no matter what they have opted to do. There have been other times when viruses have actually destroyed them. This has caused many to question if is really worth it, even so, bitcoin keeps augmenting in popularity. If it is ever insured by the FDIC, this popularity will continue to augment, as those who are skeptical right now will have peace of mind that if for some reason they end up losing bitcoins, the FDIC will have them covered to a great extent.
Compared to other types of transfers that are available, transfers with bitcoins are a piece of cake. Anybody can send bitcoins to another person utilizing their PC or even mobile application. If one’s stop to think about it, it is similar to digitally sending cash.
How Is Bitcoin Created?
This is one of the most frequently asked questions! Utilizing computers to solve math puzzles that are complex, individuals compete to mine bitcoins. This is how they are created. Approximately every 10 minutes, the person who wins is rewarded 12.5 bitcoins.
Anonymity at All Times Has Raised Concerns
The anonymity that bitcoins provide is what a lot of people seem to love. In a public log is how each bitcoin transaction is recorded, but the names of sellers and buyers are never revealed. The only element that is revealed is their wallet IDs. This means that they can sell or buy, without the fear of being traced, hence why it has become the go-to choice for those individuals who purchase drugs or conduct other activities that are considered illicit. This is one of the main reasons why the governments of different countries, such as Australia, China, and Japan, are weighing regulations. They are concerned about the lack of control they have over this currency.
The lack of regulation has concerned Thailand so much that it has prohibited its population to undertake transactions that consist of bitcoin. This country appears to not think that anything good can come from a currency that is not being regulated in any way by its government. Many experts have come to the conclusion that more countries will continue to prohibit this type of action in their territories, especially if the number of hacks begin to augment. There are some countries that do not have any law that either accepts or rejects bitcoins; therefore, the legality of bitcoin can be said to be legal in those places that accept it as a payment method.
Bitcoin And The Dark Web
Because using bitcoins can provide a great degree of anonymity, it has become the de facto currency of the hidden internet that can only be accessed using a special browser called “Tor”. This hidden internet is called “The Dark Web“. The most infamous example of a website operating on the dark web using only bitcoins is “Silk Road“. Founded by Ross Ulbricht in 2011, Silk Road became the amazon of illegal drugs. This bitcoin only market was making millions and millions of dollars, and Ulbricht was earning $79.8 million in commissions.
As you can see, criminals have a great advantage using digital currency to stay anonymous. Thus, if bitcoins became an official currency then the government would have a hard time tracking criminals.
It is clear that bitcoin comes accompanied by several noteworthy advantages and disadvantages. It is up to you to decide if the advantages make it worth your consideration. One thing is clear: Millions are benefiting from bitcoin, and it does not seem that they are regretting it in the slightest. It is safe to state that bitcoin is here to stay for many years to come.
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