The journey of virtual currency started with Bitcoin, which was created in 2009.
A name attached to Bitcoin creation is Satoshi Nakamoto.
Still, the name needs to be clarified because he left the project of Bitcoin in between, and later on, https://thebitcoincode.io/ and some of the other blockchain developers developed Bitcoin.
Bitcoin is a virtual currency created to make a currency that has precisely the same features as Fiat money but does not have control of a single identity like the government or any other centralized financial system.
Instead, Bitcoin supports decentralization and has a different base called blockchain, used mainly by cryptocurrencies to facilitate transaction verifications.
Blockchain is the safest mode of recording cryptocurrency transactions, and it uses the open public Ledger to record and hold Bitcoin transactions.
Fiat money is government-owned money, our trusted medium of exchange issued by the government.
The government has complete control over the Fiat money circulating in a country.
Bitcoin and Fiat money are two different concepts; one is fully centralized, and another does not have any single control over the government in its monetary affairs.
Although cryptocurrency can lead to complete digitalization and offers the same features as centralized money, has different technology.
There are some uses where cryptocurrency can perform better than Fiat currencies, such as settling the international payment in 2 minutes.
The cost per transaction of Bitcoin is meagre compared with centralized banking system charges
reasons that support Bitcoin: –
- Bitcoin does not create a natural barrier for Fiat currencies. Still, the increasing craze of cryptocurrency uses is becoming a hurdle that will diminish Fiat currency’s use shortly. Furthermore, because the new generation is actively investing in crypto, crypto is becoming a trend for investors and traders due to its price volatility and excellent opportunity to earn maximum profits.
- Bitcoin and other cryptocurrencies do not have any physical existence. Due to this, it is most likely used by investors at an early stage because, in the world of digitalization, no one wants to use cash or take a risk to carry cash with them.
One more reason that Bitcoin is becoming a barrier for Fiat currency is that you do not need to submit.
- Your identity to create a Bitcoin wallet and make investments using Bitcoin. Cryptocurrencies do not demand identification proof to make investments and move money from one source to another. Whereas if you use the centralized channel to make investments, you have to complete your KYC and submit all the necessary documents to a particular bank or financial institution
- Using Bitcoin, one can transfer funds anonymously from one source to another, and even the funds can be transferred overseas without acknowledgement to the government about the funds. However, oil trading and other necessary businesses create a situation where immediate funds are required to carry out the business process. In this situation, one cannot use a centralized banking system to make payments which takes about five to six days to settle an overseas payment in this situation where Bitcoin can settle international payments in less than 10 minutes.
- Any identity does not control the prices of Bitcoin as Bitcoin is independent and does not involve any third party to verify its transactions and prices. So due to high price volatility, more customers are attracted to Bitcoin investments and leaving Fiat currency investments behind. Bitcoin I’ve also become the highest and fastest-growing liquid asset. During the pandemic, when only a few options were left for investment and could not make physical investments due to a complete lockdown, people started investing in Bitcoin; Bitcoin had performed so well that it has given around four times the return on the investment made with Bitcoin. Also, Bitcoin has left precious metals like gold and platinum behind as they were the highest-growing assets of the economy.
These are some of the facts that Bitcoin is creating a barrier for the use of fear to money, and also Bitcoin is somewhere diminishing the use of Fiat money in the world’s economy.
Bitcoin is used domestically, and some countries use it internationally and receive payments for import and export.
Bitcoin has benefited some countries and many companies to receive and make payments cost-efficiently, speedily, time efficiently, securely, and anonymously up to a great extent.
Do get the required knowledge before using Bitcoin for payments.