It is the first day of January 1983 when the internet is born and in 1990 history is created when scientist Tim Berners – Lee invents the World Wide Web at CERN, Switzerland. The internet does not take the world by storm but it does that gradually. Today saying that ‘internet is huge’ seems like an understatement. It can be argued that creation of the internet is by far the biggest technological feat that has ever been achieved by humankind to date. Then comes – Bitcoin!
The world is in financial disarray, currencies failing, economies in wild flocks and jobs being lost. However, what if you could build an entirely new economy, one specifically designed for the digital realm. That is the dream behind Bitcoin. Bitcoin, for those of you do not know, is an electronic online currency, which was created in 2009 by someone under the pseudonym Satoshi Nakamoto. But like any economy you don’t want too much too fast because then the value of the currency drops or becomes so slow that economy grounds to halt. Bitcoin is designed to be an instrument-self-stabilising economy.
Bitcoin v/s Fiat Money
Everybody knows the concept of money. You pay money and you buy stuff. Money is the medium of exchange that outdated the barter system due to lack of convenience. The current form of money, which we now use, is Fiat Money. Fiat money has no intrinsic value, the only reason it has value is because some central authority of a country says so and we as a society accept that.
Nonetheless, if we take a closer look at Fiat Money then we will find that there is a lot of scope for improvement:
• Fiat money is not as portable as Bitcoin. When Fiat money is transferred electronically from one person to another, a third party gets involved who acts as a gatekeeper, which could be a bank, a credit card company or a clearing-house. This third party will oversee and authorise the transaction and also make a note in their ledger as to keep a proof that a certain transaction happened. Over the time these electronic network companies have become so powerful that more often than not they dictate the terms and regulations of online money transfer. Although it is our money but we cannot move it until permissible by the so-called gatekeepers.
• Internet is ubiquitous which has made all of us global citizens, but our currencies remain national. It becomes quite difficult when we make transactions outside the country. When we do it, we also end up paying money exchange tax or fee that varies from country to country.
• Fiat money is susceptible to hyperinflation. Fiat money is unlimited in supply and free to create. The only way it is made rare is artificially by the Central Bank of a country through their monetary policies. In extreme cases like funding a war or jump-starting a dying economy or funding elections for populist measures, money is created in excess and it loses its value. Moreover, when this happens in a dramatic manner in a short period of time, it is called hyperinflation. With Fiat money, which is, only a hundred years old there have been more than fifty-five cases of hyperinflation all over the world in the last 100 years.
Where as bitcoin is the first of its kind crypto currency, which has the benefits of both electronic and physical money without the involvement of any third party because of the ingenious technology at the backend that keeps your privacy and at the same time makes you answerable to no one about the transaction you make.
Secondly, Bitcoin is a global currency. Just like the internet, no company/organisation owns Bitcoin. Therefore, no country or organisation should have a problem accepting it as a reliable payment method. Since no one controls Bitcoin, hence no one can shut it down. Again, like the internet, you may try to ban it but you just cannot shut it down.
Thirdly, the technology behind Bitcoin is so brilliant that it keeps Bitcoin rare and always-in demand. The Bitcoin network will ever create only 21 Million Bitcoins. More than 19 Million Bitcoins have already been released in to the market since 2009. The price of Bitcoin is destined to go up as the demand is always increasing but the supply is limited. In other words, Bitcoin is resistant to hyperinflation like precious stones and metals. Bitcoin is just a number, which is divisible up to the eighth decimal, which is fondly called Satoshi, named after the founder.
Satoshi = 0.00000001 bitcoin
Millibitcoin = 0.0001 bitcoin
Therefore, Bitcoin will remain in circulation among billions of people without the inconveniences in allocation.
What is the need of bitcoin?
“Wall street is fraud, America is fraud, the world is fraud, central banks are fraud, we live in a fraud. It is all based on fraud and they get the percentage of the fraud, that is the business model. And to suggest that there is any more moral-ethical aspect in anything that’s going on now is to be completely naïve about the fact that we live in an era dominated by financial terrorists.., terrorists.., jihadies of banking!! They are here to kill you and themselves. They believe in ideology than the Quran but Adam Smith, that they completely misread and interpret as something to justify their blowing themselves up…,” said the dramatic Max Keiser, talk show host, Russia Today.
It is November the second, 2008 just six weeks after the Lehman brothers Collapsed and all over the world, there are panic debates about how to save the banks. Then on a little visited web forum for cryptographers, a document appears in which a complete new monetary system is proposed. The ‘visionary’ author calls himself Satoshi Nakamoto. Bitcoin comes into being in the need of the hour.
Interestingly, we say we have a global economy but we cannot take a dollar, give it to someone in Netherlands, and then know what to do with it without changing it into the native currency. And when this step is eliminated, we can simply send one form of payment and get the product in just a matter of seconds and this starts to change things from a global perspective.
Satoshi explains, “The root problem with conventional currency is all the trust that is required to make it work. The central bank must be trusted not to debase the currency, but the history of Fiat currencies is full of breaches of that trust.”
Business enthusiasts like Richard Branson, Peter Thiel and Bill Gates, Michael Dell and other business communities in the west and other parts of the world are switching to what they think is a better monetary system. A system in which banks are no longer needed because payments can be made directly from one person to another. Bitcoin is fundamentally different because Bitcoin holder does not owe anyone anything and no one owes Bitcoin holder anything. It is not a system based on that, it is a system based on ownership and no one can censor it, no one can cease it and no one can freeze it.
Bitcoin is a growing reality. New money is not a dirty world. New money is not paper. Old money closes at five. New money is always open. Old money is stuck in past. New money gets better every day. New money is Bitcoin.