The Difference Between Bitcoin and Traditional Currencies
Bitcoin exactly happens to be a token issued from the Bitcoin Blockchain, nothing more nothing less.
This token may be programmed to execute different functions, hold different values and uses implicitly not to forget its ability to be divisible into a million portions for trade.
The reason Bitcoin is so valuable today is that there can only be 21 Million Bitcoins within the network. After the last Bitcoin is purchased, people may begin trading in less which would make it more valuable. This value increase would be due to the limited supply of Bitcoin, matched with unlimited demand for this cryptocurrency.
One might ask, What is it that makes Bitcoin so unique?
As mentioned previously, Bitcoin happens to be a token issued from a Blockchain. This makes it quite secure to an extent where it cannot be duplicated, manipulated or forged.
Bitcoin is different from a Fiat Currency in numerous ways, some of which have been mentioned below:
- Bitcoin has no central authority, unlike other currencies which are backed by the government.
- Bitcoin is subject to inflation alone due to scarcity caused by an artificial limit. Country backed currencies are subject to deflation as well.
- Bitcoin transactions are registered in the Bitcoin blockchain. This acts as a ledger, whereas cash transactions may or may not be recorded.
- Bitcoin transactions are immutable, whereas the majority of digital records can be duplicated.
- Bitcoin transaction requires fees to be paid to miners. This is quite similar to taxes we pay the government, except taxes can be evaded quite easily compared to having a transaction registered in the blockchain without paying fees.
- Bitcoin transactions are made over the internet and are public, which includes your Bitcoin addresses being known, whereas cash transactions are pretty much anonymous and do not leave behind a trail.
Bitcoin is infamously also known as the internet’s currency because it is resident on the internet with scores of people (miners) keeping track of each transaction happening by recording it within the Blockchain.
Bitcoin is different in many ways from the normal currency that we’ve been accustomed to, but it is quite essential for our world to technologically advance in a progressive manner.
Blockchain — Wikipedia
Bitcoin — Wikipedia
Bitcoin — Simple English Wikipedia, the free encyclopedia
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