Why Blockchain and cryptocurrencies are the future of money?
Since its inception, the concept of a blockchain that solved the problem of digital double-spending in 2009 has been shrouded in mystery and controversy. To this day no one knows who or who invented the damn thing and decided to give away the next billion-dollar idea for free as an open-source project. The introduction of Bitcoin as the first decentralized application to run on top of a blockchain has polarized opinions with some seeing it almost immediately as the future, while some swear that it is on the verge of being the most financial scam. biggest of the world. history and the rest have no idea what. it is and why this minority is so passionate and engages in a heated debate on the subject. Pay Slik.
As with any new innovation, there will be supporters and detractors to keep the balance and be honest with each other. Personally, I am a huge proponent of cryptocurrencies, having first discovered their real potential thanks to evangelist Andreas Antonopoulos. So why is Bitcoin so much better than money? Why is the future of money? I will try to explain it in this article in the simplest way possible so that we can all understand and participate in the debate.
Speed
The current Bitcoin network allows around eight transactions per second, its cryptography and the amount of hashing power required to secure a transaction make it one of the most secure means of money today. That kind of peace of mind actually comes at a price — speed! This pales in comparison to transactions made by third parties such as banks, its centralized server-side network can handle thousands of transactions per second when transactions are done locally in the same currency, but when it comes to international transactions, Bitcoin wins. . in terms of sheer speed.
Right now, all cryptocurrencies suffer from Trilemma’s scalability, we’ve only really felt the worst during the surge to 20k, as well as the crypto kittens on the Ethereum blockchain. It is a problem that is being addressed, and Bitcoin has already looked for solutions like SegWit that has been implemented and the Lightning network that is available on the Bitcoin Testnet. These updates should greatly improve the speed of transactions. I have no doubt that concepts like sidechains, modularity, and sharding should help improve blockchain speed. While Fiat may win this round, it won’t be for long!
cost
The cost of transferring Bitcoin depends on the value of Bitcoin on a given day at the time of writing, the network fees were around 608 satoshis, roughly $ 0.40 USD at current value. Depending on where you are in the world, this is quite cheap, especially considering the fact that it is the same for everyone around the world, which makes it even more surprising. There is no preferred provider; they all pay the same rate. The big argument came when Bitcoin hit $ 20,000, and the same network fees weren’t worth $ 50, so it’s unreasonable for smaller purchases and you would definitely rule out microtransactions.
Fiat money and central banks with their flat rate and pricing strategies may in some cases seem like the attractive option in this case, and at the all-time high, it was. Since the price drop, Bitcoin has become more affordable to transact, but we know this is only a short-term solution. If we are going to embrace this as a global medium, it must remain affordable at any price, and that is what the Lightning network aims to do, increase speed and reduce transactions to Satoshi and some say even Sub-satoshi. Fiat may win this one but not for long. Pay Slik.
Laptop
All you need to carry Bitcoin is a USB stick, a smartphone, or a laptop, even a single sheet of paper. Any amount of Bitcoin can be stored in any of these methods and moved as you wish. You can email it, send it via social media, wallet to a wallet address, it really is up to you. Unlike Fiat, you don’t need to have an account, no special login, app, or visit a specific website that you may or may not access all the time to transact digitally.
Whereas physically, hmm, have you tried walking around with a lot of money in your purse? It’s probably one of the most heartbreaking experiences anyone will have to go through. Bitcoin can also be sent across borders without anyone having to give you special permission or approval or a 3–5 day wait. Bitcoin does not recognize borders, international markets, business hours, or exchange rates. Bitcoin has the same value in all countries, and you can send it to someone in another country within the same period of time that you would with a friend who is next to you, the network does not understand the distance. So Bitcoin wins!
Shortage
Bitcoin is the first currency in human history that we know of that has the ability to be scarce down to the exact digit. We know exactly how many Bitcoins will be available throughout its entire existence, 21 million to be exact, we know how many are being mined, we know how many are available, we know where they are, we know whether it is being traded or not. . Fiat money fails in this regard, governments in conjunction with central banks print millions of dollars each year constantly flooding the market with a currency that is only worth something for its legal tender. Pay Slik.
So ordinary fiat fails miserably in comparison. You do not believe me? Can you tell me how much money is in circulation in your country? How much does it cost offshore? How much has been removed from circulation? I do not believe it! The second would be gold, which may be in short supply now, but we continue to find deposits as there is no shortage of mining operations currently in operation. We have no idea how much gold will be mined, we have no idea how much gold is actually in circulation, so we know that someone could flood the market any second, but they don’t know because this maintains the status quo that is gold. valuable. Does Bitcoin win this one?
Divisibility
I just mentioned that there would only be 21 million Bitcoin, so how will 7 billion people get a share of the action? It’s not mathematically possible, is it? Bitcoin is a digital currency, and that means that it can be divided into smaller chunks that we call Satoshis. A Bitcoin 1.0 Bitcoin can be divided into 0.00000001 individual pieces and recombined in an instant. everyone can participate in the action. This enables instant micropayments and opens up a whole new application of money and efficiency.
Can you imagine that instead of paying a fixed fee to use the Internet, you only pay up to the exact megabyte that you used? Would you only pay for transportation up to the exact distance you traveled? How efficient would that be? How easy would it be to manage your expenses? Let’s see that fiat or gold do it! How many gold shavings would that man have? Also, fiat money is inflationary in nature, its denominations only grow over time. Remember when a penny was still worth something? I guess we have a winner in Bitcoin!
free-market economy
The concept of government-backed fiat money is unethical and certain parties benefit more from the system than others. How do you create an environment conducive to a thriving free-market economy when the most powerful commercial product is centrally planned and controlled? This for me is contradictory. In all our years of the central government, has trusting a politician been a good idea?
Especially when it comes to questions of value and monetary status. Fiat currency has the ability to be censored and confiscated as it is a tool for the state by the state, meaning that people are dependent on a central power at all times, this sounds like a nanny state to me. Fiat has these trade restrictions to ensure that a country’s wealth can be easily diverted and the status quo maintained.
Fiat is valued by government-grade, not actual merit, it is a piece of paper that we have all been forced to use as trade with no alternatives, until now. Since fiat can be regulated by a central party, it means that the market is regulated and can be unnaturally influenced to provide competitive advantages to those with connections. While Bitcoin offers everyone a level playing field to compete. Pay Slik.
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