Bitcoin, mined initially by Satoshi Nakamoto in 2009, a prominent name that started the era of ingenuity over cryptocurrencies in the world and uniquely molded the ways of transactions over the internet all over the globe. Virtualization of literally everything has made the market hike on different online platforms. As a result, decentralized networks of finance created a very promising step for future events and adventures named Cryptocurrency.
So, what is a cryptocurrency and why is it a broad asset in the future? In Layman’s language, cryptocurrency (a virtual currency) leverages technology to eliminate the middle-man system in financial transactions pursuing a free hand for buying and selling products less costly and efficiently. It is secured by cryptography and nearly impossible to counterfeit and double-spend. Many cryptocurrencies are the decentralized network of blockchain technology – a disparate network of computers distributing ledger.
Practically, traditional currencies require banks to oversee and inspect every transaction. That’s not the case with cryptocurrencies and hence it is less costly and efficient. Lesser transaction costs and quicker transactions with no paperwork guarantees its bright future up ahead in the world.
Blockchain with Bitcoin
Bitcoin is leveraged by blockchain technology in which the data is stored in blocks or structures and comprehensively forms a chain. The transactional record or any kind of datum is not just confined or sealed in a particular data store but rather the chain is connected through peer-to-peer nodes. These kinds of technologies are also called ‘Digital Ledger Technologies (DLT)’.
So why is Blockchain, the technology of the future?
Imagine, you’re somewhere transferring an amount to one of your friends or a family member, you log on to online banking and transfer the amount to the recipient. The entire transaction is recorded in the logbook of the bank. Simple enough, right? No, there’s something we’re closely neglecting.
These kinds of transactions are subjected to risks and can be tampered with efficiency leaving rare or no traces behind. The third-party application market is on surge creating more chances of tampering of the data. Hence, people inhibiting this knowledge try to minimize the use of online transactions. This vulnerability was the idea behind inducing blockchain technology to online banking systems.
Blockchain system transactions are shared, comprehensive, and are nearly impossible to alter. The records of transactions are distributed to different nodes and hence damage or alteration of one node never provokes even a slight impact on any transaction. Blockchain transactions inherit the digital signature of the owner leaving it fraud-free and impossible to alter by a third party without the digital signature.
Moreover, blockchain systems are decentralized meaning you don’t need to have authority or permission from a regulatory or centralized body to commit any kind of transaction. It also inhibits automation capability and is programmable fabricating a super-precise and easy way to pursue the transactions when the criteria are fulfilled.
Bitcoin, The Future of Finance?
Blockchain Technology is reliable and constitutes a great hand in building the infrastructure of online events or actions or payments for the future. After the first mining of Bitcoin in a decentralized network in 2009, the cryptocurrency industry experienced a hike of US $200 billion. During its first halving in 2012, Bitcoin valued an increase of 8000% following 12 months. In 2016, the prices rose by about 2000% in the next 18 months.
But these statistics are too insatiable to believe when we count on the predictability of the future of bitcoins. It is likely to experience a major fall in the hype of bitcoins as the financial firms realize that Bitcoin contributes little or no value to their bottom line operations. One of the major reasons is the inability of mass to completely understand the variability of this future tech. In a statement of CNBC Global CFO Council Survey, near about one-third of CFOs declined to comment about Bitcoins as they inherited negligible knowledge of cryptocurrency. Nearly 30% of CFOs precisely acknowledged that Bitcoin is a fraud. Only 14% of the CFOs said it is real and can be a great adventure for the future.
Apart from that, its anonymity invites hard criminals and speculators instead of legitimate businesses. With that, the search of Top 100 Websites that accept Bitcoins has a larger share of gambling and adult websites.
Well, the debate on bitcoins as the future of finance will never end until this cryptocurrency comes as a complete package of understandability and is precisely usable. To build technology advances like this, financial institutions need to conduct an all-inclusive internal audit for their venture and appraise how this technology can be accessed to assimilate the sharing of true impacts to their enterprise as well as their customers.
It is too early to decipher the predictability of Bitcoin as the future of finance. On one hand, it caters to the most reliable services on the part of transactions but on the other, it fails miserably to gather the confidence of mass because of its low understandability. People still consider the traditional ways as a great approach to reach the future. But as someone said, “There’s always a hope and a chance of improvement for everything.”