Beginning of Bitcoin
In 2009, Bitcoin was introduced to the world, but the world did not particularly welcome the innovation. In the early days, Bitcoin was worth less than 1 cent (the exact value of 1 BTC was $0.000763924). Significant growth in Bitcoin’s value was only seen in 2010, when the price rose to $0.08 per coin. Oh, if only someone had guessed then that the digital gold would rise to $20,000, they would have started mining immediately.
Unfortunately, mining and trading on exchanges were undertaken only by a select few enthusiasts. It was only after years that attention was drawn to the new currency. The real buzz about the new currency started when the coin’s rate exceeded $15,000 and continued to grow.
Money
Let’s look back and try to remember how “Money” began. Initially, there was no money at all. Instead, there was a barter system that facilitated the exchange of goods and services. It was only much later that money appeared, serving as a kind of measure. An equivalent of the value of a good or service.
The first money were made of metal, and they are considered the ancestors of modern money. They were convenient to carry, coins had different denominations, and could be hidden from malicious actors.
Over time, metal money was replaced by paper money. Later, paper money was supplemented with a digital equivalent created by banks.
And finally, in the 21st century, we stand on the threshold of a new evolution of money into a fully electronic form — “Cryptocurrency.” The most well-known representative of electronic money is Bitcoin.
Advantages of Bitcoin and Why It Is Needed
Of course, Bitcoin, like any other cryptocurrency, has its advantages and disadvantages.
Let’s start with the advantages:
- Ease of use. Today, there are many services besides the Bitcoin wallet that allow you to send money to the desired wallet in seconds. And the money will arrive at the recipient’s account within minutes. Even if they are on the other side of the globe. All with minimal fees.
- Security. This is arguably one of the most compelling reasons to use the new digital currency. No one can “hack” your wallet and transfer your money. Unlike paper money, cryptocurrency cannot be pulled out of your pocket or bag. Even if there is a failure or hacking attempt on the Blockchain network, it is immediately corrected according to the stored data on millions of computers worldwide.
- Impossibility of counterfeiting. There are only 21,000,000 Bitcoin coins reserved in the network. This number will not decrease or increase. This means there are no fake coins. Bitcoin cannot be counterfeit.
- Decentralization. Imagine depositing money in a bank, and the next day you find out the bank is bankrupt and you have no money left. Disappointing, right? With Bitcoin, this cannot happen. Bitcoin does not depend on any specific bank, server, computer, or person. To make Bitcoin disappear, all computers worldwide would have to be destroyed. As you understand, this is impossible, and even if it somehow happens, we would return to the barter era and iron money.
- The most current advantage today is the growth of the BTC/USD rate. Ten years ago, when Bitcoin was worth less than a cent, no one could predict such growth, which peaked at the end of 2017. Now, we can only guess what the rate will be in 10 years. An investment of $100 in Bitcoin today could turn into $1,000,000 in 10 years.
Now about the disadvantages
- Lack of official support at the state level. The trends in the development of cryptocurrencies and discussions at the government level suggest that this disadvantage will soon disappear. But for now, Bitcoin cannot be used for payments in stores as a regular local currency.
- Unpersonalized accounts. This is perhaps the biggest drawback, which will be very difficult to fix. The fact is, tracking the movement of funds and accounts in the Blockchain network is very difficult. Moreover, even if a transfer is traced, it is still unknown to whom the account belongs and who sent the money. This is exploited by “not very good people.” Also, the lack of connection between accounts and specific individuals prevents integrating cryptocurrency circulation into the state financial system. It is impossible to know who received how much and how much they owe in taxes. Of course, over time, personalization will happen, but how long this will take is still unclear.
- Volatility. Despite Bitcoin’s long existence, it is still in the development stage. Not everyone knows about it, and even those who do are not always interested. Periodic fluctuations in popularity or some not-so-pleasant news in the crypto world significantly influence Bitcoin’s rate. This happens quite often. As a result, large investors are still cautious about this new digital gold and do not rush to risk. It is impossible to accurately predict the growth or fall of the coin.
Future prospects of Bitcoin
Thanks to Bitcoin being the first of its kind, it has every chance to become the main cryptocurrency among all others. Currently, all cryptocurrencies on exchanges are traded in conjunction with Bitcoin. It is quite possible that Bitcoin will become the new USD.
The logical continuation of Bitcoin’s development looks like this. Cryptocurrency accounts will become personalized. Just as banks now issue credit cards, accounts for cryptocurrencies will also be issued. Once cryptocurrency accounts are personalized, all shadow operations with cryptocurrencies will be eliminated immediately.
Then, all countries of the world will eventually recognize Bitcoin as a currency. They will develop regulations governing the crypto market. After Bitcoin is recognized as a full-fledged currency, its rate will rapidly grow. This will be driven by huge demand and a shortage of available coins for sale.
In the future, after the Bitcoin rate stabilizes within certain limits, Bitcoin will gradually begin to replace paper money. We hope to see a world where only digital currency exists. If that happens, the 21,000,000 Bitcoin coins will be worth all the money in the world.
