Scratching The Surface Of Cryptocurrency.

A Brief History

Virtual Currency, given the more popular phrase-Cryptocurrency’, is considered the modern way of banking without the predestined reforms of a centralized government.Essentially Cryptocurrency is a mode of transaction that monetary authorities cannot observe.Bitcoin is the most popular among the existing cryptocurrencies, and a person or group created it under the pseudonym ‘Satoshi Nakamoto’ in 2008, making it the first ever mode of Cryptocurrency.This is considered the oldest and the world’s most popular kind of Cryptocurrency. In addition, this venture became the sole proprietor of developing most of the official bitcoin software.

Bitcoin is a decentralized digital currency, as many online platforms explain. These can be used in transactions that accept bitcoin as a mode of exchange within those compliant networks.
Since then, bitcoin has increased in value and handlers until now; at present, it is the most preferred and most accessible mode of transaction for individuals and businesses.All bitcoin transactions are saved on an open source ledger known as a public and traceable blockchain, thus ensuring the transactions’ transparency, unlike in conventional banking systems. This level of transparency and the security that it warrants has aided the base of the crypto world to increase within a concise period. Statistics show that over 46 Million citizens in America own bitcoin, and 14% of the American population retains some form of Cryptocurrency as of March 2021.In this article, we anticipate discussing Bitcoin’s key advantages and disadvantages to the US and the public.

Advantages of using Bitcoin as a mode of transaction.

• Easy accessibility of liquidity.

Bitcoins operate through an online platform, which can be transacted through a mobile phone or any other digital device with an internet connection.These conditions make bitcoin easily accessible to people. Bitcoin’s versatile nature makes transactions convenient to the user.This allows a person to complete transactions of goods or services quickly because of the wide acceptance rate of bitcoin, the variety of commodities that can be purchased increases daily.

Liquidity means the ability to convert any asset or good into Currency. The higher the liquid something is, the greater the value of that particular item. In the conventional world of economics, cash or money is known to have the highest liquidity. Like so, even bitcoins can be quickly sold anytime the user prefers to. Further, as bitcoin is a common form of Currency in the virtual world, there are no setbacks when making international transactions as there are no exchange rates but a standard rate for the bitcoins between the seller and the buyer. These practical embellishments that bitcoin provides users have improved the use of bitcoin in some of the world’s largest economies.

• Sovereign from financial authorities

Since bitcoin is a decentralized form of Currency, no specific authority governs its usage and metrics.The Currency we use in the regular world falls under the government’s monetary authority and abides by specific rules placed on transactions. Unlike this, Cryptocurrency is independent, and there is no authoritative law that restricts or disrupts the transactions.One of the most significant advantages is that a governing authority has no jurisdiction to freeze your assets saved in bitcoin. Tentatively this gives cryptocurrency users complete control over their money. This is regarded as one of the primary rewards of using bitcoin.

• Anonymity and complete transparency

In the world of bitcoin, its users are each given a numerical identification code, which appears to other users.This method of using a passkey ensures that there is no public tracking. Therefore, only the user of a particular ‘bitcoin wallet’ only can view the number of bitcoins in their possession.Unlike in the conventional banking system, where there is often news about a bank’s client lists and details being hacked or leaked, the bitcoin wallets have extra layers of security as a precaution against potential hacking.If a person’s account is made public, a new passkey can be generated to hide the wallet. Further, the minimum use of personal details to create and transact using bitcoin is also an added feature.

High return

Bitcoin prices are highly volatile. This nature of the value of the bitcoin is often viewed as an advantage to miners. For example, in April of 2021, bitcoin reached an all-time high value of USD 64,000. Then in the late 2022s, the bitcoin showed a value of about USD 23,402 (as of August 17th, 2022). These numbers clearly show the volatility of the bitcoin; however, with the anticipated fluctuations, the potential for a profitable gain is high.Further investors who study these bitcoin trends suggest that by 2025, the value of a bitcoin would reach a price of USD 500,000.

Disadvantages of using Bitcoin.

• Absence of Government regulations

The widespread use of Cryptocurrency within the US has become a problem for the authorities as it affects a lot of monetary regulations that must be taken.Conventionally, the money that circulates within an economy is monitored, regulated, and legally bound by the central bank and its monetary policies. However, in the case of bitcoins, no such regulation can track the transactions.This results in the inability to see the economic changes that take place within the country.

Money that circulates can be tracked; therefore, the transactions can be recorded and used in making decisions. With bitcoin users growing over the past decades, the ability to appropriately formulate economic choices has become a question. With numerous users trading with bitcoin, it is problematic to accumulate the total wealth the country holds as easily as before the bitcoin’s introduction.

• Volatile nature

As mentioned earlier, bitcoin was designed and premiered by Satoshi Nakamoto in 2008. When this was created, there was a limit set for the number of bitcoins that could exist. This number is 21 million bitcoins, which makes these scarce. This scarce nature of bitcoin boosts its value of it in the crypto markets.Even though the volatile nature of the value of the bitcoin is taken as an advantage, the sudden shifts in a negative direction could also cause financial loss to the individuals dealing with bitcoins. In a way, trading bitcoins is also somewhat a mirrored act of selling in the stock market. The returns depend on the timing. However, bitcoin is a much more stable source of investment.

• Irreversible nature of transactions

Bitcoin transactions are irreversible. Once a transaction is made through bitcoin, it cannot be reverted. Therefore, there is no contingency protocol if the user sends the wrong amount or transacts with the wrong user.

• Increase in the rate of criminal activities.

The anonymous nature of bitcoin transactions is naturally used as a shield by many criminal organizations and individuals as this masks the origin and purpose of transactions.All the advantages of absolute privacy, immediate payment, and decentralized governing fertilizer criminal activity.Robbery, blackmail and ransomware, and unaccounted payment for illicit goods can all be made quickly in these networks.

The anonymity ensures that these payments are masked in layers of privacy, making it easier for these individuals to carry out their felonious activities.The anonymous payment between criminals has become easier and faster, increasing the widespread occurrence of violence throughout the nation.The crypto crime report shows that in 2020 that 0.34% of cryptocurrency transactions were associated with criminal activities. These numbers are indeed anticipated to increase in the coming years.

Conclusion

Bitcoin is the modern way of Currency and is anticipated to dominate the markets of the world on a global scale very soon. Bitcoins deliver many advantages that ensure privacy. However, this same privacy they guarantee also underwrites illicit activities worldwide at a growing rate these past years.Cryptocurrency is indeed a profitable mode to increase gains and a new experience to experiment in the world of modern banking. But this is also as profitable as it can get in this world. Therefore, it is always better to be aware and educated on the various market changes concerning bitcoin when deciding to invest. It is a gamble, and gambling can go both ways