Bitcoin was created to reduce the monopolising effect that the fiat currency system—dollars, euros, pounds sterling etc.—and the traditional banking system has over the world.
Currently, a simple transaction cannot be completed without involving banks. It is also impossible to send money to people all over the world quickly and efficiently; after dealing with lots of red tape, you will still pay a considerable amount in transaction fees. Furthermore, banks have almost complete control over their customers’ assets and they can freeze and unfreeze accounts at will. Basically, the traditional currency system gives almost total control to the organisations, and less to the individual. Bitcoin is the exact opposite.
A solution like Bitcoin not only addresses the problems in the current system, it also ensures that there is a viable alternative to the highly-defective system.
The solution being proposed by Bitcoin is quite simple. They started by creating a decentralized digital currency network that serves as a worldwide payment system. On this network, users can transact quickly and directly without third parties; transactions are anonymous and cost next to nothing. Every user has a personal electronic wallet, and total control of the wallet lies in the hand of the owner. In a nutshell, Bitcoin created a unique banking system without all the disadvantages of the traditional system.
Asides Bitcoin, the only other feasible alternative to the banking and currency system in use right now is trading in precious metals or launching a currency backed by precious metals. However, unlike Bitcoin, these systems have a central point of failure, and they can be taken down easily.
Bitcoin, and its usage, is quite simple to understand and more people are beginning to take advantage of the opportunities it presents. According to multiple sources, there are well over 2 million active users of Bitcoin in the world as at 2017.
Bitcoin was started by a person, or a group of people, under the alias Satoshi Nakamoto, and the network was released to the public as an open source software. As a result, there is no information about the team or the people that started the cryptocurrency.
Since its inception in 2009, control of Bitcoin has been in the hands of the investing public.
By design, 21 million Bitcoins will be created, with the blockchain acting as a public distribution ledger, recording how much Bitcoin has been mined. With this volume, there is adequate room for the cryptocurrency to grow, and when Bitcoins can no longer be mined, the millions of BTC in circulation will serve as the market.
As at the 3rd quarter of 2017, DigitalAssetDB reports that over 16.7 million BTC are in circulation, and the cryptocurrency has a market share of over $200 billion.
Bitcoin is an alternative to fiat currency, and its target market is the billions of people that have accounts with banks all over the world. By improving on the traditional banking system’s weaknesses, Bitcoin is well-placed to replace the banks, at least to an extent.
Bitcoin is readily available to anyone that has an internet connection, and to open a personal electronic wallet, all you need is an email address. Once you have a wallet, you can send and receive BTC from people all over the world that have a Bitcoin wallet.
When Bitcoin was created, the cryptocurrency’s only competition was the traditional currency system, and its advantages over bitcoin include stability, traditional security for assets, popularity, and backing from the world government.
There are many blockchain-based cryptocurrencies available right now, and while most of them adopt some of Bitcoin’s practices, none of them have the trading volume, the market share, or the popularity to be termed a direct competition to Bitcoin.
Bitcoin is the first truly decentralized payment system that doesn’t require trust.
Before Bitcoin, there were other platforms that sought to simplify transactions in the ways that banks and fiat currency cannot (or will not), but they were all centralised and as a result, easy to shut down. The ones that were not centralised required user trust and therefore, failed.
Since it was launched, Bitcoin has grown by over 20million%, so it is safe to say that all early investors have received multiples on their investments. Potential investors in the cryptocurrency can be buoyed by the fact that it has grown by 1,700+% over the past 12 months.
Bitcoin’s founding team are anonymous, so their transparency is a bit unpredictable. However, the network code is open source, so anyone with the technical know-how can inspect and make changes to it.
LIKELIHOOD OF CRITICAL MASS
Critical mass in the case of a peer-to-peer network like Bitcoin refers to when the system has enough users that it becomes self-sustaining and it is able to create further growth. At the moment, Bitcoin has achieved self-sustainable growth, but things could get better.
Already, big firms like Microsoft, Dell, PayPal etc. are accepting payments in Bitcoin, and the more firms adopt it, the better.
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Disclaimer: The information contained herein is not intended to be a source of advice and the information and/or documents contained in this website do not constitute investment advice.