For the past few months, Bitcoin has been the centre of attention around the world. Everyone seems to be talking about cryptocurrencies. Bitcoin is no longer something that pertains only to internet miners, instead, it is starting to become more mainstream.
Bitcoin and other forms of crypto-currencies were originally created to ease the process of electronic payments and to stray away from central authority. However, nowadays more and more people have started to invest in Bitcoin and other crypto-currencies.
At the current moment of writing this article, Bitcoin’s market value is higher than that of Netflix. This has many people wondering, “What’s so special about Bitcoin?”.
Purpose of Bitcoin:
The Bitcoin system can be simply thought of as a file that contains the names of people and their balances. When a person pays through bitcoin, his or her balance goes down and the balance of the person who received the payment goes up.
It is important to take note that there is no government or entity backing up Bitcoin, so the value of Bitcoin is purely driven by people. Furthermore, anyone can access anyone’s information within the Bitcoin system because every single person has a copy of the file; however sensitive information tend to be encrypted so it is hard to know the details about a particular transaction.
In addition, Bitcoin’s security protocols are similar to that of RSA in that there is a private key and a public key, rendering it almost impossible to break into a person’s account. Taking these features into account, the Bitcoin system can be seen as a platform that provides fast and secure transactions independent of a central authority.
Difference between Bitcoin and Traditional Money:
1)Lack Of Central Authority: All forms of mainstream payment systems or currencies tend to have a central authority, typically a country or a bank. The fascination thing about Bitcoin is that there is no central authority instead it belongs to everyone and no one at the same time.
2)Lack of Boundaries: Typically, each country tends to have its own form of currency and this creates all sorts of problems at an international scale when it comes to trading and exchanges. However, this isn’t the case with Bitcoin because it is universal.
3)Lack of Physical Existence: The major forms of currencies often have a physical existence(ex: money, gold, and silver). However, Bitcoin and other crypto-currencies are purely digital and lack physical existence.
The growth of Bitcoin:
Now that we have covered the speciality of Bitcoin, we can see why more and more people are beginning to invest in Bitcoin and other crypto-currencies. Individuals are starting to become more wary of governments and banks. People want more control of their own money in a decentralized environment.
Furthermore, Bitcoin is a universal currency and its usage can lower certain institutional expenditures such as taxes and transaction fees. These reasons combined with people’s faith in its value has fueled the recent growth of Bitcoin.
“Manoj Kumar is a tech/startup enthusiast. His areas of current research include IoT, Big Data, and Artificial Intelligence. He is very excited to see how technology will transform the future.”