What's All The Hype With Bitcoin?
Bitcoin has been in the news frequently since it was introduced in 2008 as a peer-to-peer electronic cash system. A form of cryptocurrency, Bitcoin has been hyped both as the new wave in e-payments as well as a valuable investment opportunity. So what makes it so revolutionary? Here is more about Bitcoin and what we might expect from cryptocurrency in the future.
What is Cryptocurrency?
Cryptocurrency is another term for sending or receiving money digitally. Unlike euros or pounds, Bitcoin and other methods of cryptocurrency have no physical form or denomination. The price of a Bitcoin is dependent on market demand and you can just as easily spend your Bitcoins in a U.S.-based platform as one out of Europe. Bitcoin is not owned by anyone and there is no central authority such as a bank or government overseeing it. While this makes for fewer fees and more freedom using the system, it also means that there are few protection measures in place to guard against fraud or illegal activities.
It’s easy to set up a Bitcoin account. Simply visit a Bitcoin exchange on the internet and buy Bitcoins with your credit card or bank account. Your Bitcoins are then stored in your ‘Bitcoin Wallet’, which is similar to a bank account. You can receive and send Bitcoins through your wallet by accessing it with your computer or mobile device.
Where Can You Use It?
Because it is Internet-based currency, you can use Bitcoin to make instant payments to anyone in the world, no matter where they are located or what type of currency their country uses. For those sites that do not accept Bitcoin, you can use your Bitcoin account to purchase gift cards that you can then use. Bitcoin has been extensively used to buy apps, videos, and games online and is often used by those who play online poker or bet on sporting events.
However, many people are choosing to hold onto their Bitcoins rather than spend them because their price keeps going up. Bitcoins are limited to 21 million, and the more people invest in them, the higher their value. That means that more and more people are looking at their Bitcoins as valuable investments rather than money to be spent for goods or services.
How Will This Change the Future of e-Commerce?
Bitcoin’s decentralization and transparency is open source—meaning its code can be copied by anyone and modified to fit their needs. That’s why there has been an explosion of other cryptocurrencies that have made a splash including Ethereum, Ripple, Litecoin and Dash. As more people understand cryptocurrency and its value, this alternative type of money will grow in popularity and evolve to society’s needs.
Cryptocurrency is much more difficult than bank accounts or credit cards for hackers to compromise, which makes using it an ultra-safe way to complete a transaction. Using cryptocurrency is also lightning-fast with verification occurring within an hour or two as opposed to the days that it may take to verify a check or credit card payment. The safety and speed of cryptocurrency will allow the world of global commerce to progress at an even faster pace and may open up markets that were previously inaccessible.
Will cryptocurrency ever make banks or credit cards obsolete? Critics are doubtful that a form of money that is based on complex code that is only understood by a very small number of people will ever become our main source of currency. They argue that, for cryptocurrency to become mainstream, it will eventually have to be regulated. While it remains to be seen whether Bitcoin and its successors will eventually overtake banks, it’s clear that the rise of cryptocurrency has just begun and will change the way we see money for the foreseeable future.