The financial industry has undergone a drastic revolution. The driving force of this revolution builds on artificial intelligence and big data. The blockchain technology is one of the many applications that accompanies this boom of the finance sector. This technology has existed for about a decade and had only one application – the cryptocurrencies. Of these virtual currencies, Bitcoin takes up the top position, and it often bears to lead charges higher for the virtual currencies.
According to the experts, the decentralized and innovative nature of the Bitcoin will change the world, but some other researchers believe that this is merely an exaggeration. Indeed, it is one of its kind and Bitcoin clearly shows how cryptocurrencies can emerge from the shadows and pave its way into the public sphere of brick and mortar payments. But that does not mean Bitcoin is free of all flaws.
On the whole, the blockchain is a distributed ledger that keeps constant track of the location of each bitcoin. It makes forging of the new coins impossible and also stops people from spending the same coins twice.
One of the most promising aspects of blockchain is the sharing of economies. The ledger that keeps track of the flow of digital coins can also follow the usage of shared items such as cars or real estate. The AutoBlock stands out in the digital market for their services an in automotive exchange. Car enthusiasts from across the world can now indulge in serious business deals through digital transactions which are facilitated by AutoCoin (the official virtual currency of AutoBlock platform).
Likewise, the Bitcoin supports the feature of shared economies, but it also holds a bad reputation. It is notorious for the abrupt fluctuations. Apart from that, theoretical threats to the success of Bitcoin are also prevalent.
Here are seven things you need to know about Bitcoins and how promising it is:
Strong user support
The cryptocurrencies do not trade like traditional currencies. There is a circulation cap on the number of coins for every currency. In the meantime, Central Banks keep printing money to manage inflation and support their economic policies. Bitcoin always has 21 million coins in circulation.
So nothing but a promise usually backs national currencies. It is the reason why currencies like pounds and dollars have lost 95% and more of their value over the past 100 years. The backing comes from the trust which is comparatively higher in “fiat” currencies and also among the cryptocurrency users. The bitcoin, In particular, has proven itself to be good and in many cases, it is better than fiat when it is about transactions. The ability of transactions and sharing of economies is also what provides strong backing to the Bitcoin.
More like a basic platform
As per The Next Web,
“It’s the underlying platform, the Bitcoin protocol aka Bitcoin 2.0, that holds the real transformative power.” When we analyze the rest of the market, we can easily state that Bitcoin is one of a kind. It serves to be a platform on which others can proceed further and work in coherence towards a better digital picture. Last year, banks like HSBC and Barclays sought to develop a “utility settlement coin.” This coin works for international transactions and can also convert at parity with foreign currencies. Bitcoin sets the stage for progressive developments in the digital sector with its innovative concept. In itself too, it promises more improvements for the businesses in the future.
Volatile nature of Bitcoins
The value of Bitcoin relies heavily upon the market perceptions, and it shows a history of regular price fluctuations. Nonetheless, the value of Bitcoin touched its highest level in December 2017 when it hit $19,498.63. During that time, the currency received massive media hype and public attention that led to a further hike in its prices. However, quite soon Bitcoin crashed, and millions of people were found selling their Bitcoins. Hence, the currency is subject to extreme volatility as it can change substantially within a relatively short period.
No inherent returns
Speculators often term Bitcoin as Ponzi. A Ponzi Scheme is the one where manipulators play financial tricks and promise a handsome payback to the investors, but in reality, the returns come from the new funds and are not the same that people invest initially. Bitcoin is largely different than such schemes. It is only a currency you buy, transact and hold. It has no inherent return except an unknowable potential for capital gains based on the demand for transactions or usage of store values.
Triple entry book-keeping
To run a business smoothly, we need book-keeping. It involves the process of recording all transactions in a verified manner. The triple entry book-keeping is a step forward from the original book-keeping method. It brings accounting, allocation of resources and values to a higher level.
Despite all promises, there are certain illegal purposes of the Bitcoin such as buying drugs, hiring hitmen and exhortation. Some researchers argue that 90% of the dollar bills also test positive for cocaine. And cryptocurrencies are more traceable than these cash transactions. So the promises of Bitcoin to keep the digital picture devoid of all faults is authentic. It is the media hype that leads to such perceptions. It is no more an issue than piracy and pornography.
It is a major flaw in the Bitcoin industry. The experts argue that if an entity controls the majority of the Bitcoin holdings (51%), then they will end up having full control of the network.
Consequently, they can easily manipulate the public ledger, seize control and manipulate the market. And no centralized authority will be able to keep that individual or group from doing so.
We can easily assume from all these factors that the future of currency is moving towards digital. The industrial landscape is changing, and companies may have to re-position their payment channels. Amidst such radical modifications, blockchain is the wave of the future which holds the potential to present multiple arenas apart from the Bitcoins.
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