Blockchain Technology and Bitcoin. Is It Here To Stay?
Why has Bitcoin become so popular?
Over the last decade, there has been a lot of interest in changing payment systems and the main reason are for security and anonyminity. Bitcoin system provides a way of sending and receiving money to any part of the world at any given time with no limits. Cryptocurrencies aren’t centralized by banks or forex markets, therefore, many problems are solved such as banking fees, delays and crossing borders with large amounts of fiat currency (dollars). Transactions in Bitcoin are made without the personal information of any of the parties involved being exposed to the public. This works well for those looking to stay anonymous.
Transactions made using Bitcoin are recorded in a shared ledger that is accessible to anyone called the Blockchain. An account ID is shown, the transaction amount being transferred and a time stamp of when it was executed. When an update happens on the blockchain, a record keeping system is updated globally and simultaneously. There is more compute power backing Blockchain up than all of Google! Isn’t that something.
By allowing users to maintain control over the transactions, Bitcoin system is kept safe from the network. This way, the system protects its clients against identity theft. Financial institutions and companies are adapting slowly to cryptocurrency markets specifically for this reason alone. The ability to remove fraud will save banks a significant amount of money and satisfies the consumer for payment related transactions with low fees.
- Transaction Image taken from Blockchain.info
As it stands there are very little amounts in terms of a fee charged within Bitcoin payments. The fee included is aimed at making the transaction speed faster. The higher the fee the quicker the transaction process. These services are cheaper than credit cards and PayPal, which is another major advantage. There were over seven trillion dollars in credit card transactions last year, costing consumers hundreds of billions of dollars in fees.
Due to the fact that transactions conducted on Bitcoin are secured, cannot be reversed and no personal information is used, the merchants are exposed to much fewer risks from fraudulent transactions. The system allows merchants to conduct transactions in places with high crime and fraud cases by using the public ledger. This ledger cannot be altered and every transaction keeps a history of the previous transaction, making it hard to con anyone in a Bitcoin transaction. Japan is taking advantage of using bitcoin with over two-hundred and fifty thousand retailers adopting the new currency to combat their high levels of financial fraud.
Bitcoin has been ahead of most of its competition in terms of digital currency for some time. Over the last few years, other considerable alternatives to Bitcoin have been gaining ground. These alternatives that could someday dethrone Bitcoin include:
- Ethereum and Ethereum Classic – The main selling point of Ethereum is that it provides the platform to create something that is more than just a digital currency. It enables smart contracts and allows people to do anything from buying/renting houses to selling music albums online. Currently, its only value is for people is creating other coins using its platform.
- Ripple – The most important point of Ripple is that it allows the instant conversion into different currencies. Banks forming a decentralized blockchain to send money to each other could be the potential for this alternative coin.
- Litecoin – Litecoin works a lot like Bitcoin where new coins are created through solving algorithms. It, however, offers a higher cap limit of eighty-four million which is higher than Bitcoin’s at twenty-one million. It is currently faster than Bitcoin.
- Siacoin – I generally enjoy the idea of a distributed content storage platform, but they’re essentially a startup with a lot of money. The real value lies more in the idea rather than the technology backing Siacoin.
- Dash (formerly known as Darkcoin and XCoin) – This alternative coin was created to solve problems in Bitcoin like slow transaction process times. In most of the other aspects, it works like Bitcoin.
How blockchain improves Bitcoin
It allows two parties to transact without the supervision of any authority, eliminating intermediaries such as banks, credit agencies and the DMV (Department of motor vehicle). Customers using Bitcoin have access to all their transactions anywhere in the world at any time. Blockchain data is timely, consistent, accurate and is able to handle malicious attacks by hackers. It assures users that the transaction will be completed as the protocol states, making it extremely trustworthy.
As more individuals and companies realize the potential of cryptocurrencies, the growing popularity will only surge the price higher. It is safe to say that bitcoin and its underlying framework blockchain is here to stay. If digitizing our dollars means saving time and money in a trusted environment, the upside of cryptocurrencies is hard to ignore.
- Blockchain – https://blockchain.info/
- Competitor Information – http://coinmarketcap.com/
- Retailers in Japan accepting Bitcoin – https://www.cryptocoinsnews.com/bitcoin-accepted-260000-stores-japan/
- Blockchain, the Future of Money – https://www.youtube.com/watch?v=qdCCYVnxtW4
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