Bitcoin can lead to the next industrial and financial revolution in the world. The cryptocurrency concept that was born over a decade ago is now a considerable reality in both technology and financial societies.
Many experts and even regular users around the world believe that Bitcoin and cryptocurrency industry as a whole can be the solutions for current challenges in the financial sectors. Lots of economic crisis in modern history have rung the bell that maybe the money system is the biggest hurdle.
Satoshi Nakamoto introduced Bitcoin as a solution to a more decentralized financial system. Bitcoin’s whitepaper emphasizes on some key benefits that Bitcoin has over traditional (fiat) currencies. Now many experts confirm that Bitcoin has been successful in providing the promised benefits. Besides, many cryptocurrency and blockchain projects that were born based on the Bitcoin concept have introduced lots of features that show the potential of this new world.
Decentralization, When You Really Own the Money
Bitcoin is a cryptography-based financial solution that relies on Blockchain technology as the infrastructure network. Decentralized Ledger Technolgy or DLT that is being used in the Bitcoin’s network, makes decentralization a natural specification in that. Bitcoin is fundamentally like no fiat currency. Its system is not monitored and even governed by an authority or government.
The decentralized nature of bitcoin means anyone can participate in its network and see the ongoing events in it. It means transparency at the highest level. In traditional financial systems, you as an average person won’t understand what’s going on in the primary levels.
Achieving a successful decentralized concept needs incentives to attract participants. Bitcoin is the first cryptocurrency in the world and introduced the mining process as the incentive. When people have financial reasons to participate in a network, the decentralization becomes easier.
Limited Supply Increases Value
Fiat currencies have an unlimited supply, and governments can issue new money based on their needs. Bitcoin supply is limited to 21 million. Lots of cryptocurrencies followed the Bitcoin way and provided limited supply. When there is a limited amount of currency, and everyone can know how much of that is in circulation, the result is more value for that cryptocurrency.
The limited supply of Bitcoin makes it similar to gold as an asset. Its scarcity increases the value and attracts many investors to look at it as a long term investment. This investment has been very profitable in the past years compared to other traditional assets.
Security and Ease of Use
One of the most goals of Bitcoin and cryptocurrency industry as a whole is to bank the unbanked. Traditional financial institutions require multiple personal documents and proofs to provide service to new customers. Bitcoin on contrast requires absolutely nothing more than an internet connection to join the financial ecosystem. Anyone can create a bitcoin wallet and start using the cryptocurrency for multiple use-cases. Besides, the security in Bitcoin wallets is more reliable than traditional bank accounts.
International transactions are still a big hurdle for companies and individuals. Especially when transferring a significant amount of money, they face lots of legal challenges. Some countries are in sanction lists, and their citizens cant have straightforward financial relationships with other people around the world. The decentralized digital nature of bitcoin and ease of use makes it a viable solution for these challenges.
The age of paper money is gone for good. You can’t find any generation Z or even millennials who use cash for their day to day activities. We all rely on digital transactions like the card, online, and nowadays, cryptocurrency payments. They provide more freedom and security, and the experience with fast and secure transactions when buying online is like no other achievement in the modern world.
Bitcoin is here to stay. So are the many cryptocurrencies that were born following its path. Many governments tried to forbid or limit bitcoin and cryptocurrency adoption. Some scandals like illegal ICOs seemed to help. But some large nations around the world like China and Japan are trying to develop similar solutions like Bitcoin, but yes, centralized and intrinsically dangerous. It means that the first cryptocurrency has been successful in showing the financial benefits of blockchain technology and decentralized infrastructure.