I believe in honest money- Gold, Silver, and Bitcoin…
…Yes, these are the words of local people in many parts of the world like Berlin who are transacting their money in Bitcoin. Because they do not trust banks and there are hell lot reasons for that- charging bucks for own money-transfer is one of many.
If we believe in history; there was no reason for the First World War except for the fact that big banking cartels would get power money by financing both sides of the war. Equivalent or if not better; the fall of Lehman brothers, the biggest bankruptcy from which America has still not recovered was a byproduct of- FIAT money & their corrupt regulators.
Coming to the positive news; the world has witnessed the rise of honest money in the form of Bitcoin which is viewed as the future of money and the solution for global finance. As promised in the previous blog, we are here to showcase you the advent of Bitcoin, how it is different from FIAT money, and how it will solve the issues of Global finance.
How Bitcoin came into existence?
It was the year Sept 2008, when the world was witnessing the downfall of one of the biggest financial firms- Lehman brothers; a white paper was published in November 2008 under the name of “Bitcoin, a peer-to peer Electronic cash system” by Satoshi Nakamoto.
Later, in the following year i.e. 2009, it was released as the open source software answering the question- where to store the value of money when the traditional financial system fails.
Fun fact: You will be surprised to know that Satoshi is just an Alias and the creator has chosen to remain unknown even to this date.
What is Bitcoin actually?
In simple words, Bitcoin is a worldwide acknowledged cryptocurrency and payment system which works literally between peer to peer without the involvement of any intermediary. Now the question arises-who validates the happening of the transaction?
Well, there is a strong backup technology- block chain which validates the happening of the deals by being a public distributed ledger over the network of nodes. Since the whole mechanism runs without a single central authority; Bitcoin is termed as the first- decentralized digital currency. (Impossible to override!)
Fun fact: M-Pesa, is one similar payment system launched 2 years before Bitcoin in Kenya to transact without any cash, credit card, or a bank- only with a mobile text message.
How Bitcoin solves the problem of Global finance?
#1. No More Involvement of Third Party
In physical money, you need to take the permission of a third party which may be a bank, Credit Card Company or any gatekeepers and that too with a charge which can vary as per their self-interest.
So is it free in the case of Bitcoin?
Yes, it costs nothing to transfer or transact the money from any part of the world and that’s because of brilliant technology at the back end- Block chain. In addition to this, you need not have to share any kind of transactional data to any other parties.
More importantly, it is much more viable than a bank to reach out the underprivileged section of people, let’s say, a rural village in Bihar, to open an account and send money to any part of the planet.
#2. We need a Global Currency
As we are increasing in the terms of global citizen; the need for a global currency is much required looking at the volume of our daily foreign money exchange.
Bitcoin can become that global currency. Because of the fact that its back-end technology is somewhat like the Internet which means no country, company, or an organisation owns it and therefore, no country should have the problem in accepting Bitcoin as a currency.
This trait of Bitcoin will help developing country like India to highly shift their dependence from American dollar. One more key thing about this currency is that no one controls it and therefore, no one can shut it down.
It’s like the Internet- you can ban it but not shut it down.
#3.Any Form of Money in History Needs To Be Precious and Rare
“Compound Interest is the eighth wonder of the world
One who understands it- earns it
He who doesn’t- pays it” – Albert Einstein
Yes, the FIAT money and its corrupt regulation mechanism like interest make it less valuable and untrustworthy. Unlike gold backed currency, its supply and demand and wholly dependent upon the interest of Financial giants like the Federal Reserve and powerful banks.
Bitcoin, the ultimate solution for that:
The Bitcoin coin software ensures that it’s rare which means there’s only be 21 million Bitcoin that will ever be created over the network; 13 million of them has already been created. This restriction in supply has increased its demand- making it rare and precious like gold and less susceptible to Inflation or Hyperinflation.
One obvious question that arises here is- we are billion in number so how such a small amount of currency can fulfil the demand?
Let’s resolve this confusion by an example: If we use Gold as money to transact and when its value increases; we divide it into grams or even milligrams for our convenience. Similarly, Bitcoin being just a number can infinitely be divisible. In fact, it’s already divisible up to the 8th decimal:
1 BTC= 100,000,000 Satoshi (fondly named after its founder)
So you need not have to worry about the number of the Bitcoin for circulation.
Who is using Bitcoin?
Let’s assume nobody uses the Bitcoin first; the trading & Bitcoin exchange volume touched 23 billion dollars at the end of 2014, a jump of 57% over the year before. The VC investment is pouring and touching up to- half a billion dollars. Founders of PayPal (one of the biggest payment gateways) have invested 116 million dollars in Bitcoin startup in 2015.
Many multi-billion companies like Paypal, Expedia, e-bay are already accepting Bitcoins and the most recent and biggest being the Microsoft is using it on its website for Xbox points. Small and mid cap merchants are not far behind; more than 60,000 sellers are accepting this digital currency-worldwide.
Last but not the least, Bitcoin transactions has increased from 0 (just a couple of year back) to 100, 000 transactions at the end of the year 2014.
Now it’s your turn:
You have just seen the advent, concept, and scope of Bitcoin…
Now it’s time to change the mental makeup and make people aware about this digital currency.
The next step?
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