Bitcoin is the first ever cryptocurrency known to man, and his power over all other financial assets (coin, tokens and NFT) is still evident today. Bitcoin came to the world in the year 2009, and from there, other altcoins continued to model and fine-tune their operations around the activities of Bitcoin. It was the first and has continued setting the pace among the rest of the cryptocurrencY. The effect of Bitcoin is so big that many market activities around it determine the activities around others. If Bitcoin falls, almost all coins follow that same direction and when the value surge, most coins follow the same movement as they are all tied or pegged to it. While every other owner of the cryptocurrency project is known, that of a Bitcoin is still a mystery to all as we all are yet to put a face to the mystery name Satoshi Nakamoto.
The Genesis of Bitcoin
With Bitcoin's correlation with Blockchain being explained, it is important to note that Bitcoin's origin is mysterious despite being founded in 2009. with the owner's details unknown, the owner has anonymously been tagged as Satoshi Nakamoto. Although no known owner has come out to claim this invention, it has been embraced by many people due to its decentralization nature, which takes power away from a central authority like the government and puts that power in your hands. Also, the shortcomings of traditional financial institutions necessitated the quick adoption of this project.
The whitepaper of Bitcoin, written by the alleged owner Nakamoto was titled "Bitcoin: A Peer-to-Peer Electronic Cash System,". The white paper explains why people no longer need the intervention of government and financial institutions such as banks to conduct a financial operations or access any financial services.
How Bitcoin Works: Blockchain Technology
Understanding how Bitcoins work will allow you to embrace and appreciate the beauty of this life-changing technology. First, Bitcoin's main reasons for success could be attributed to tapping and being built on the blockchain. That means that it removes and eliminates the need for an intermediary to access or conduct transactions; it's a more secure means of payment or transfer of value while also being transparent, which promotes trust. Because Bitcoin's technology offers all the features, i.e. Blockchain, Bitcoin automatically enjoys its perks, thereby making it valuable.
It is, therefore, to understand what blockchain technology is. The blockchain is a digital ledger that keeps account of every transaction as the block on its network or nodes. These transactions are open to everyone, and everyone has access to them. This way, they could be verified. Also, the blockchain employs cryptographic algorithms to encrypt every data or transaction on it. This way, the security of the blockchain is top-notch. The decentralized nature enabled peer-to-peer transactions, which made it lighten quickly as against using banks with many other requests to attend to.
Advantages of Bitcoin
The Usage of the Coin has offered financial freedom and boosted financial inclusion in areas where traditional financial services are not rendered. Bitcoin has helped change the face of payment as it could be made faster without intermediaries. The eradication of the Intermediaries has helped cut down the cost of transactions which are usually very high if Banks or other financial institutions are involved. Still, on financial inclusion, the coins have allowed for inter-country and interstate fund transfer much easier and faster as the peer-to-peer mechanism is rallied upon.
Alongside the above, remittance could be achievable for people who want to send money to their country from another country. Trade has been boosted as payments can be made faster and traced through Blockchain Explorer. In a way, Bitcoin allows you to avoid the relentless pursuit of the government to drain your pocket through Tax. Having your fund in Bitcoin helps avoid this and gives you 100 % behind your funds and what to do with them.
Lastly, Since you have more control of your funds, you do not need to have your information with any bank's database, which means Bitcoin facilitates privacy. Creating a Bitcoin wallet does not necessitate you putting down your confidential details. All that is needed is your mobile phone, the Internet, pen and book. This pen and book are because you need to write down your private keys, which gives you total control of your wallet account.
Risks and Challenges
Just because Bitcoin offer amazing benefits, it has its own shortcomings and risks attached to its usage. The first risk is the regulatory risk attached to its usage. Governments, through their agencies, have looked for ways to discredit and control Bitcoin, yet they are falling short. This has resulted in many governments in numerous counties banning the use of the coin in their country. They see it as a threat and are working on voiding its usability and adoption among people. Sanctions have been melted down on users and platforms promoting and facilitating the use of Bitcoins.
Another risk that Bitcoin poses is that it is highly volatile and results in frequent changes in the value of the coin as it is determined by the market's forces of demand and supply. This markets the value of BTc fluctuate, which could result in the difference between the value you bought now and the next five minutes.
Also, based on the privacy and anonymity set up of the Blockchain, usage of BTC could be used for loss of illicit, illegal and immoral acts such as payment for child pornography, child trafficking and even money laundry. BTC usage also encourages gambling which has ruined the lives of so many people. Additionally, BTC is demanded by cybercriminals as their identity is concealed, and just their BTC wallet address can be seen. With hackers hacking and exploiting companies with weak cybersecurity controls in place, using BTc has been the mode of payment for Ransomware attacks.
The Blockchain is a safe technology. However, lacking cybersecurity skills and knowledge could make users make wrong decisions and choices, opening them up for attack. Some users save their private keys on their Gmail, which is easy to hack, and some do not just have adequate knowledge to secure their accounts, making them open to losing it all.
Bitcoin's Impact on the Global Economy
The impact of using BTC has expanded beyond its usage as a means of payment. Some countries, such as Venezuela and El Salvador, have made it and recognised it as a legal tender and a store of value for their citizens. In fact, you could get citizenship by investing a certain amount of BTC in the country. This shows the power of BTC. Along with this, financial institutions have incorporated BTC as a form of service rendered. They are investment advice given to people around investing in BTC.
BTC has also developed into a store of value for most people. They see it as the new gold, and they invest in it. Most people invest when it is cheap and wait for years before selling and making tons of money. Adside that, BTC helps beat inflation, and to beat inflation, many believe that BTC solves that issue. The potential of this blockchain is mind-blowing and has not been fully realised yet.
Even payment companies such as Paypal now offer the usage of BTC as a means of payment. They created a wallet option on it; this way, you could deposit your funds and make your payment. Every organisation now knows the impact of blockchain technology, and they are doing everything within their means to tap into the wide usage, resources, and reach it offers. Since they offer the option for people to conduct their financial services through BTC on their platforms, the number of people using such platforms as Paypal has skyrocketed. It shows that people want to be in control of their funds.
Also, The adoption and use of BTc have opened a floodgate of establishment around the technology. New companies and projects have been created adopting the framework of the BTC as they look to serve the needs of the public. They are now companies which help clients buy BTC as a form of investment. This firm helps clients manage their BTC portfolios ads they may not have the time to do themselves. This shows that BTc has forced the creation of a new market that we never thought we needed in the first place. This company offers to invest in BTC as one of their major services, and you will be surprised how many people patronise their services.
Lastly, BTC has created a form of employment for a lot of people. A lot of people prides themselves as BTC trader who buys and sells coin on a daily basis. Some people ventured into public speaking as they were invited and paid huge sums of money to speak about cryptocurrency in front of many people. This goes a long way to show how people want to learn and adopt the BTC technology while leverage on the financial;l services it offers for their own betterment.
In conclusion, BTC is not what it used to be many years ago; it has evolved and improved. It was created to solve payment issues; now, it is a store of value. It is also an ingestion option to be considered by investors, while many see it as a full-time job as they trade BTC daily. BTC might have been around for years, but the potential it entails is still discovered to this day. The BTC might be suffering a blow due to the numerous blows it is suffering from Financial Regulators such as SEC. It is, however, without a doubt that it's a currency for now and the future.