Bitcoin and Digital Currency are viewed as an alternative to money and it may soon replace it. Bitcoin is the most famous Digital Currency being the first one ever created.
People adapt to changes, the changes make their lives easier. Money comes into many forms now and they adapted to it and accepted it. Money became digital a long time ago in fact. As long as they can use it in their daily lives, they have no problem. Some are using cheques and cards with their transactions. They even do their transactions online. They can execute buying and selling, paying and receiving without the presence of the money but a medium with a value into it. This is the essence of digital currency.
Bitcoin and Digital Currency will never have a problem then in their attempt to replace the money in any transactions. Like other medium that has value on it, it is also used in exchange of anything with the use of peer to peer networking. People started using bitcoin since 2009 when it was created and developed by Satoshi Nakamoto and it was quite a success.
The idea started in 1998 when Wei Dai suggested it on cypherpunks mailing list. The philosophy around it is that money is just an object that we have accepted as a payment.
Impacts of Bitcoin and Digital Currency
Digital Currency is considered virtual money since you are using it to do your transaction online. Here are the impacts of virtual money, Bitcoin or any established Digital Currency in today’s world.
- You are in control. With digital currency, you are no longer relying on the authorities in transferring your money. You can do it on your own with your own records and monitoring.
- Your transactions are private because there is no third party involve in digital currencies.
- The value of Digital Currency is growing because it is designed to produce coins in a certain limit.
- You can save money because you don’t need to go through banks to process your transactions and get heavily charged.
Digital Currency has come into many forms since the success of bitcoin and they are collectively called altcoins. Altcoins are Capricoin, Litecoin, Mastercoin, Namecoin, Peercoin, and others.
Councils in the UK and Arstechnica publications have their own digital currency as well. However, not all digital currencies survived. In fact, many have died because no one is using it so it is still quite a challenge up to now. The success of these coins depends on the amount of cash they are running in their network. Also, a new digital currency should bring new innovative technological solution on the market to make a difference.
Lesson in Bitcoin Scarcity and other Digital Currency
Bitcoin is an open-source, meaning that anyone can create Digital Currency with the same concept. However, the creation is limited and you can’t just get it. Either you earn it through mining or you buy it online from Digital Currency exchanges.
In order to mine for a bitcoin, one should have ASIC machine. This will help miners to compute the encryption of the bitcoin which is called “hash” before the coin is being awarded. The fastest machine you have the more bitcoin you get.
Some bitcoin flaws that have been noticed since it has been used as a digital currency is that it works well in transaction as a proof-of-work but it doesn’t work well as a currency. In order for this to work as a currency, many stores should accept it.
Bitcoin value will go up once it reached its limit and the demand becomes high. As of now, bitcoin is not stable for businesses to use as a currency. Because of this, bitcoin payment processor solution is to convert every transaction with a hard currency immediately.
Many companies are willing to use and accept bitcoin and other digital currencies in their transaction. However, they demand security from it and regulation. They are afraid to lose a fortune out of it.
Many industries might still be a little skeptical in using bitcoin and digital currency in their transactions but they are open with the idea. Time comes that money will vanish and bitcoin or other kind of digital currency will become our official currency.
Bitcoin – Is it a Safe Asset?
Since Bitcoin is now accepted as a common commodity and many nations are turning into it whenever they have a crisis, many are asking, “is it a safe asset?”.
3 Reasons Why Bitcoin can be considered as a Safe Asset
Reason #1 – Bitcoin is Reliable on Uncertain Economic Times
A safe asset is something that people run to in uncertain economic condition. It was proven that Bitcoin like Gold is the one people turn to whenever there is an economic crisis in their countries, it is due to the fact that bitcoin can be traded into goods and services and that there are many businesses nowadays that is accepting bitcoin as a payment method. Aside from that, you can transfer bitcoin anywhere in the world. You can send money to your love ones using bitcoin without any fees at all.
Reason #2 – Bitcoin Inflation-Deflation Characteristic
This Cryptocurrency can be considered as a safe asset because it is designed to up to a certain amount of coins only. This is to protect its value. Therefore, the bitcoin value with not suffer deflation, thus it is safe to keep.
Reason #3 – Bitcoin Value Increase Over time
It is the next big safe asset considering its value. It is increasing over time, though there is no telling that it will remain the same throughout the years, but you can still consider it as a safe asset because you’ve got more to gain than to lose when you invest in it.
Some people who are not considering Cryptocurrency are confused and have a little knowledge about this digital currency. They find it complicated because it is new to their ears. But people don’t need to understand its technicalities but knowing how it works will suffice.
There is a block size debate that is ongoing today with bitcoin about the need to finance the cost of its bookkeeping. Even if it happens, it can still be considered as a safe asset and smaller investors can still invest into it. You can expect lower returns in a long run and a high return when a crisis happens.
You can also consider cyrptocurrency as a simple asset just like fiat currency because it acts the same. Fiat currency fluctuates, but we keep it, gold values fluctuate, why not keep Cryptocurrency? It is safer than the two. In fact, Cryptocurrency might replace money in the future, so it better be safe than sorry. You can invest with bitcoin and learn how to take advantage of it. You can keep both, fiat currency and Cryptocurrency so when the time comes that traditional money is no longer of value you already know how to manage bitcoin.
