Bitcoin: Future of Digital Payments?

You might wonder that everyone these days is talking about bitcoin. Lets check out what it is and why is everyone talking about it.

Bitcoin as per Wikipedia, is the first worldwide decentralised digital payment system. It is also called cryptocurrency because it is a medium of exchanging digital assets through the use of cryptography to ensure security of a transaction. By security it means, the sender and the receiver are unaware of each other, that is, if ‘A’ sends a bitcoin to ‘B’, B will be unaware of the person who has sent the currency and A only knows the bitcoin address of B. Wonderful isn’t it ?

The history of this digital currency is rather interesting. It was invented in 2009 by an unknown person or a group of unknown people under the name Satoshi Nakamoto. So even the inventor isn’t known or hasn’t come up to state his/her/their invention.

Its Users: As per a research conducted by the Cambridge University, between 2.9 million and 5.8 million users are using a cryptocurrency wallet as of 2017, most of them using bitcoin.

This virtual currency as a true medium of exchange has been always disputed because of its links with illicit activities. Yes, this digital asset is widely used on the dark web for illegal activities. The latest WannaCry ransomeware demanded money from the victims in the form of bitcoin and that is why the makers of the ransomeware have still not been revealed with evidence because it is nearly impossible to track its address.

Inspite of its links with unlawful activities, it was accepted as a form of payment by many merchants. As of 2015, the number of merchants accepting it exceeded 1,00,000. Those included PayPal, Microsoft and Dell.

Bitcoin is also considered as a mode of investment due to its substantial growth in the recent years which can be seen as below.

As we can see there is an exponential increase in the value of bitcoin, the reason is — Economists state that the way bitcoin is designed, its value will keep on rising. This doesn’t mean that it will never fall.

By the way bitcoin is not the only cryptocurrency in the talks, another cryptocurrency called “ether” from Ethereum, has also seen a steady increase in its value.

Despite the criticism faced by various governments, cryptocurrencies are the fastest, most secure way of managing digital payments. Hence its adoption has increased in the recent years. In a way, it threatens the governments about their currency and that their currencies will have no meaning with greater and greater adoption of cryptocurrencies.

Cryptocurrencies like bitcoin and ether have the potential to work all over the world and are private in the sense that nobody can track who has how much amount of these cryptic money. They protect users privacy and transfers of such cryptocurrencies are way difficult to be tracked.

Economists have repeatedly stated that cryptocurrency’s method of implementation which is blockchain is the future of commerce industries. Blockchain has trust built in to the system which throws away frauds from taking place in the system. More about blockchains can be known in future posts, so stay tuned !