Money, no matter which part of the world you are in, can get dirty at times. While there have been stories on how deprivation starts because of the lack of money, many of us have struggled in real life to save those last pennies from our bus fares. With all the technological booming and with electronic transactions, things have not remained the same presently.
1. The Changing Market
We can safely say that the world is going through a monetary revolution. Believe it or not, COVID-19 has been one of the major driving forces behind the success of this revolution. Why do some experts comprehend that the revolution is currently to its full extent? The simple answer will be to take a look at the performance of the major currencies that have been used in the past year to make the transactions. No points for guessing that the U. S. dollar is the most used currency, which is, however, followed by gold and, you guessed it right, Bitcoin.
The price of Bitcoin in terms of the dollar has risen so much as 139% that it has turned into the Bitcoin revolution. Even the smartest of the smart people could not assume that the price of Bitcoin will shoot up so much. The last high was seen in December 2017 before this. Many commented that the “biggest bubble” will burst soon and that Bitcoin is nothing but a scam.
2. Bitcoin Revolution
However, what changed within the last couple of years is the perception towards Bitcoin, which has led to the Bitcoin revolution. Slowly but steadily, Bitcoin is moving away from being means of payment and settling as a sign of value. Many high-end corporates such as MicroStrategy, Square, etc. have purchased millions of dollars worth of Bitcoin. Even PayPal is now letting its users transact through Bitcoin. Even though there is a lot to implement to bring Bitcoin into the mainstream, it is enough to start the Bitcoin revolution that is taking place in the present world.
3. How Bitcoin works
Bitcoin is an electronic transaction between peers. The sender needs to send a valid signal to the recipient. All the transactions are noted in a public ledger and every node in the process has access to this ledger. However, if a node wishes to receive an award or add a block to the blockchain, he needs to solve a puzzle that is selected by the Bitcoin protocol. When a node or miner in Bitcoin world solves a puzzle, he is rewarded with transaction fees and with more Bitcoins.
4. Cons of Bitcoin
The major drawback of using Bitcoin as a method of transaction is that it works very slowly. Every 10 minutes, only about 3000 transactions can take place using blockchain. The transaction costs much higher than normal digital transactions. Buying one Bitcoin will levy a 1.49% commission, which is steep.
However, the negative aspect of Bitcoin goes beyond its cost. You cannot make the algorithm work without a specialized computer chip. This particular chip consumes a huge amount of energy – electricity that is 60-terawatt-hours in a year to be specific. Elaborating it would mean that half of Argentina consumes the same amount of energy. Hence, the mining of Bitcoin is restricted to areas where energy is cheap such as China.
5. The Uniqueness of Bitcoin
No matter what the cons are, there are two unique features of Bitcoin that outweigh the negativities. Scarcity is the building block of economics and Bitcoin has built-in scarcity. Even though it is a cryptocurrency and is mined in the virtual world, there is no way to mine Bitcoin in unlimited abundance.
Another unique property of Bitcoin is that it is sovereign. Any Bitcoin user is able to complete a transaction through Bitcoin without going through any intermediaries.
6. Why Bitcoin is Revolutionary?
We may take Bitcoin’s sovereignty as an obvious feature. But it has a major impact on the Bitcoin revolution. China is the only country currently that is advancing rapidly in the race of electronic transactions. Thanks to the Chinese apps WeChat Pay and Alipay, transactions of nearly 40 trillion dollars are happening in a year. Other Chinese platforms are also flourishing steadily.
Even countries like India where Chinese apps are banned are coming up with their own version of Chinese payment apps to get into the race. Bitcoin is revolutionary because it has not only quickly jumped back from the reputational damage that it has suffered but also has been chosen by many respectable corporates and individuals.
The sooner the world realizes that building counterparts of Chinese apps would not help with the revolution that is happening, the faster Bitcoin benefits will reflect on various countries.