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Cyptocurrency development of bitcoin

By Athira N Kaimal , India
Cyptocurrency-development-of-bitcoin

Currency is the medium of exchange, and it is the accepted form of money and the circulation of this piece of paper determines the economic condition of a country. But considering each country, the structure, value and look of these currencies are different. And thus currency can be found in the form of paper, bank notes, metal coins etc. World countries became a single entity under the formation of internet and this made them understand about the turns it had made. And with the evolution of internet, people got many advanced technology inventions such as electronic mails, electronic books, electronic payments etc. And now it has reached to the currency. This on a general basis can be called as Crypto currency and through this paper, we are going to analyze a particular crypto currency, called Bitcoin and is features.

What is Bitcoin? Why is it so popular?

A bitcoin is a crypto currency or a digital asset and it is considered as a payment system among the world. A bitcoin can be considered as the first decentralized virtual currency or digital cash as it have no specified administrator to control. This is a peer to peer currency and is fast in transactions as it happens directly between users. This works with a feature called block chain as there is a direct implementation of networking and cryptography and this maintain the integrity of this crypto currency. Cryptographic proof and networking is the basic structure since there is a lack of trust in internet payments. The concept of bitcoin is introduced by a person or a set of people, still remain unidentified. Pseudo named as Satoshi Nakamoto, they invented bitcoin by the year 2008. And later it got released as open source software in the year 2009. Bitcoins can be considered as highly liquid and it have low transaction rates compared to other medium of exchange and thus can be sent as payments over internet in simple clicks. Maybe this could be the reason why it is so popular to the world. It became a financial instrument due to its popularity and due to its features. These bitcoins can be linked with other currencies and this is another main reason why it got popular all around the world. Another fact about bitcoin is that they are focusing on straight relationship between the owner and the receiver. There will be no third parties and this could be considered as an advantage regarding the object.



Pros and Cons of Bitcoins

For bitcoins there are both advantages and disadvantages. Some features of bitcoin make it unique and better but considering some other aspects, there is flaws too. The advantages regarding bitcoins can be considered first.

Pros

Ubiquity: Bitcoins can be sent to anyone by any one. This technological advancement is much more anonymous than banks. There is nothing to worry about the borders, crossing countries or bank holidays in this transaction. There will always be a freedom in payment

Liquidity: Bitcoins are more liquid than that of paper currency and they are easy to transfer, secure and authenticate.

Control and Security: The network for bitcoin is safe and thus the control of transactions is easier. Merchants cannot charge extra fees in this concept.

Transparency: The information regarding bitcoin is transparent; anyone anytime can see the transitions. The public information can be seen by other operators but the personal information will get hidden for ensuring safety.

No fee or very low fee: Bitcoin transaction does not need additional fees and even if the merchant need fee, it could only be accepted with client’s approval.

Cons

Lack of Awareness: The main disadvantage considering bitcoin is that the people lack awareness about the usage of digital currencies.

Risk and Volatility: There is only a limited amount of coins and this enables volatility. It is expected to have reduced volatility when the usage gets increased.

No guarantee: there is no guarantee about bitcoin being there in the future. It could lose its value and investing in bitcoin could be a risk.

Is bitcoin regulated? Is this good or bad?

There is a lack of regulation for bitcoin but some countries like South Korea is functioning on creating these regulations. Bitcoins can be used to fund criminal and terrorist activities since the details regarding the sender and the receiver is hidden. And considering this feature of bitcoin, it will be risk generating if it has no regulations. This could create somewhat negative impact to the best features of bitcoins. Usually regulating an industry makes it more trustworthy among people and there will be mass adoption. Regulation is always better in the long run too. More people will get interested in investing as it makes them feel that the process got secured. So considering these aspects, regulation will be good for bitcoins and for the people.

What is the future of Bitcoin?

Bitcoin is still evolving and it is hard to predict about its future. With the advantages, it could be a substitution over paper currency, but almost half of the people are not aware of bitcoin or crypto currency. Maybe when it gets regulated, more customers will get to know about it. But still there are repercussions in it. If the value of bitcoin goes down, it could be an issue. And investing in bitcoin is still confusion since after investing, if bitcoin get stopped, it could be huge loss.