Bitcoin dynamics broken into pieces and all your curiosities answered
- Bitcoin is completely digitalized; there are hidden aspects to this.
- Bitcoin is a medium of exchange just like the traditional currencies (dollar, euro, and yen)
- Its practical usage covers exchange, savings, and investment
- The major fear of every government is lack of control and taxation
- The advent is blockchain which was perfected with bitcoin creation made decentralization completely possible
Digitalism associated with cryptocurrency is not something that’s very easily understood and bitcoin has been some sort of mystery to people. A better explanation of any complexity paves the way to an easier understanding of how things work.
Bitcoin for several reasons has survived even though previous coins fall apart. It has faced a good level of pressure, sanctions, attacks, and criticism yet it stems up from these challenges unscathed.
There are many things to know today and this will help you whenever the topic of bitcoin comes around.
Is bitcoin really a coin?
You may have been outwitted by shiny images of coins emblazoned with well-modified Thai baht symbols. When you hear of mining, you may think of a certain secret company mines like raw gold or diamonds.
Don’t be confused by these imageries. Bitcoin is software. It is a purely digital phenomenon, a set of processes and a set of protocols. It is a virtual currency created through the use of cryptography. Cryptograph means the science of making, breaking, and keeping codes. Bitcoin has become a household name because several hundreds of attempts have been made but the only bitcoin made a distinct distinction and has held it for over a decade-plus history.
Why has it not failed like others?
Technology is highly adopted now unlike before. Previous coins never really knew how to achieve decentralization. Bitcoin succeeded because it has a first-mover advantage. This advantage is a technology called a blockchain.
In the real world, bitcoin was the first decentralized currency and this decentralized was achieved with a cutting edge tech called ‘blockchain’.
People always wanted financial independence and this coin was the first to be fully independent. People can send money to regular people anywhere in the world without middlemen of any sort. The lack of any centralized control made it invincible. Previous coins all had a central administrator and this made it easier for government to coerce, regulate or shut down the coin.
Also, bitcoin solved the age-long problem of double-spending. Even as a digital currency, you can’t spend twice with the same single digital token. The proof of work in bitcoin handles any double-spending issue and this means that a trusted third party must timestamp transactions before it gets authenticated by the system.
In a nutshell, bitcoin solved the problem of ‘trust, and that’s why it has not failed since 2009.
Why has it become so popular?
In addition to the above-listed points, bitcoin sales at extremely competitive rates, and if compared to the existing financial system, it beats it hands down.
Shops, enterprises, e-commerce, and other important firms started accepting bitcoin as a mode of payment. Due to its good support system to the people, it became a synonym for digital currency.
The lack of a central system also gave people a good level of security. Government loves to protect their turf but bitcoin has been defying that odd.
Will bitcoin likely fail in the future?
Bitcoin can fail if two things happen: i. if a technological crisis happens and it became very easy to attack it.
ii. If all the governments of the world unite and aggressively ban and enforce its ban.
These two things are unlikely to happen because; new digital currencies handle all improvements and bitcoin is also not archaic to any tech challenges. Hypothetically, it’s very uncommon and rare to destroy the self-sufficient system of blockchain.
Also, governments of the world have never united to a single purpose before. There are always hidden agendas. This is a distant possibility because even some countries have started making plans to develop individual digital currencies.
Bitcoin is also hard to get out of the market. If people lose interest, the price plummets. When something spikes the enthusiasm again it increases again and picks up. To stop it entirely, I think governments will have to confiscate everybody’s wallets. This is very, very unlikely to happen and hence it’s very hard for bitcoin to fail in the near future. The wide adoption is already a good indicator of acceptance. It is a very emotional space hence people won’t allow it to go away especially not now, not in the perceivable future.
How bitcoin dynamics works; straightforward ideas
The Liberland, a micronation between Croatia and Serbia accepted bitcoin as its official currency. This nation has taken bitcoin as a transparent method to record electronic, physical, and financial assets.
Bitcoin accommodates everyone because you can trade with any currency. Moreso, you can use it for business as there are no credit card fees in it. Some investors buy it and store it, hoping it will go up in value.
The anonymity of bitcoin gives it a certain level of shield because it can’t be easily attacked. Also, this gives bitcoin some criticism because governments fear that there is a lack of control over the currency.
Although some myths and ancient Greek mythology have been linked to bitcoin. One thing is certain.
Bitcoin is a digital currency version of Silicon Valley where all objectives are lead bare with no one in central control of the system.
In a way, money is not real because money is a token given value and accepted as a ledger tender for products and services. Practically, bitcoin replicates this value but lacks any central control because the aim is to carry out transactions without any middlemen (banks et al).
The creator of bitcoin is anonymous and unknown because since the system is of anonymity, it only makes sense if it is 100% anonymous.
Although the hype is that people get rich by using bitcoin. The original idea is not to make everyone a billionaire but to give everyone a chance to invest, trade, and market without any traditional control.
People see bitcoin as disappearing whenever it goes down in value but that’s false. Currencies rise and fall depending on social, economic, and financial factors. The major purpose of any currency is exchange.
Starting from the medieval trade by barter, money has always been a value for exchange. Bitcoin solves the same purpose and the government is being a critique of it because it’s concerned about taxation and control.
In the bitcoin dynamics, improvement and developments have given birth to a concept known as anti-government money. The inadvertent purpose of the bitcoin invention is to give financial freedom, poise people for the best advantages, and also make the world a tech hub.