Concluding thoughts on bitcoin and the value it brings!
In the past couple of months, we have released new chapters in our guide CryptoInstitution. Beginning from how the journey of bitcoin started, understanding bitcoin mining, Proof of work and more- our goal was to provide you enough information so that you can have an opinion on the value of bitcoin. In this chapter of Cryptoinstitution, we hope to provide you with some in-depth analysis and concluding remarks to the chapter of bitcoin!
With its revolutionary protocol, amalgamating blockchain technology and cryptography, this alternate financial model has a value, which no one dreamed of. The freedom of deciding what to do with your money, using any sort of financial services without added costs, transferring money without any boundaries of border, time and space- are unheard concepts in present times. Although, the vision of presenting bitcoin as an alternative financial model, still seems to be a far fetch dream.
Bitcoin does surpass our traditional banking system in more than one way. Our existing banking system is way more centralized with more fearful powers than we are comfortable with! Our present system is way more inclined to situations, including, but not limited to, hyperinflation.
History has revealed many economically powerful countries experiencing hyperinflation or recession leading to economic turmoil and financial crisis all over the world. In recent times, countries like Zimbabwe, Venezuela have failed due to a loss of value in their currency. Our present financial system is highly sensitive to loss of currency value; thereby weakening the economic conditions of the country. Bitcoin was born with a rise in need, for an alternate financial model. Its limited supply capped at 21 million or its mechanism based on a decentralized model- all point towards the efforts of having an alternate and contradictory practice than the current system.
There is no denying the fact, that bitcoin has started a movement. In today’s date, there exist almost 2000 cryptocurrencies in the cryptocurrency market. Taking a cue from bitcoin, other cryptocurrencies started popping up one after another. The market cap of all these cryptocurrencies combined comes to be around 200 billion dollars. This figure, once upon a time, has even reached as high as 800 billion dollars.
It suffices to say that bitcoin, indeed, started a revolution. There are many new coins in the market today. It is still a little early to decide who will become the next ‘amazon’ or ‘facebook’ of the world tomorrow. Nevertheless, these cryptocurrencies can no longer be ignored
The Power of Cryptocurrency
Moreover, cryptocurrencies can revolutionize some industries like cross border remittance. Our present financial system takes anywhere between 3-9 days in order to send money to other countries. Additionally, the transfer fee is also a huge hurdle for people who regularly send money back to their home towns. Bitcoin does all of this in a matter of minutes without charging any extra fees (optional).
Currently, almost one-third of the world’s population is unbanked. Cryptocurrencies can also act as a major catalyst in including the unbanked population of the world into a financial tier. The fintech sector of the world is blooming. Countries are pouring in more and more resources and money to find innovations in the financial world. The race of finding the contribution of technology into the finance sector for better ease, efficiency, and speed is going at a faster pace than ever. In a way, cryptocurrencies have already provided many solutions which the fintech sector is seeking. They can provide great solutions to some of the already existing problems of the financial world in today’s time.
There is obviously more to bitcoin than meets the eye! The subject of bitcoin or cryptocurrency, in news, is for a negative reason more than a positive one. It is difficult to enlist all the reasons, however, some of the major ones are highlighted in this blog post
Bitcoin Price History, Attacks and More!
Bitcoin filling flaws of our present financial system need not mean it is without any. One bitcoin, which was worth almost 15,000 in April 2015 was worth almost Rs 30,000 in April 2016. Shockingly, one bitcoin which was worth 14,00,000 INR in December 2017 is now worth nearly 5,00,000 INR (September 2018). The volatility in the price of bitcoin is one of the biggest obstacles for bitcoin to be used for day to day purposes. No one wants to pay different BTC on subsequent days for buying milk. Even people who have invested in bitcoin do not see it as something they can use for their day to day activities.
The stories of frauds, attacks, and hacks on some or the other bitcoin exchange seem to be never-ending. Right from the hack on Mt Gox, which wiped out 850,000 bitcoins (or almost 41,000 crores in INR); to one of the latest hack on Japanese exchange Zaif, which recently reported stealing of about 400 crores- these attacks don’t stop. Episodes like infamous silk road, do not help much, in upholding the reputation of bitcoin.
Another issue with bitcoin is scalability. At present bitcoin can handle about 5 to 6 transactions per second. While big market players like VISA can handle about 2000 transactions per second and PayPal processes 10 million transactions per day. As the user base for bitcoin is growing, the network is becoming more clogged with unprocessed transactions as well as high transaction fee. If bitcoin were to be adopted by a larger audience and become mainstream, this vital issue of scalability needs to be resolved and soon.
Another major grey area for bitcoin is its unclear legal status in many parts of the world. Some nations like Vietnam and Pakistan have put a complete ban on cryptocurrencies. While countries like Malta are set to become the future crypto businesses of the world. Some countries like Venezuela have gone a step further and introduced a state-backed cryptocurrency. However, most of the nations haven’t regulated cryptocurrencies yet. This becomes a huge question mark for the future of bitcoin. Will bitcoin get a chance to become mainstream? Or will it be stifled before reaching its full potential?