The use of cryptocurrencies has increased exponentially the last couple of years and many economists and analysts have argued it will be one of the main competitors to our societies current currency system. The first crypto, Bitcoin, was initially created to avoid the ‘trust’ which is needed in our conventional currencies to make a transaction work. The main design to avoid this ‘trust’ was Satoshi Nakamoto’s Blockchain technology along with the peer-to-peer network. Since Bitcoins first launch in January 2009, many hundred thousand individuals and ten thousand merchants transact with cryptocurrencies daily.
It is important to mention that, cryptocurrencies such as Bitcoin offer many more advantages to our current day and age currencies. Let’s list a few advantages:
Firstly, there is no bank to sign up for or any type of regulation to agree to; there are however easy mobile payments that anyone can use, anywhere. The system is up and running 24/7, and sending funds are like passing money over the street.
Secondly, cryptocurrencies, such as Bitcoin, use military level cryptography to secure and validate its transactions through what is known as the blockchain. Of course, there are some risks to be aware of, but it ultimately gives you the control over who has access to your holding and over any types of fraud.
Finally, and maybe the most important and controversial, just like paper money, cryptocurrencies lets a user hide their real identity when transferring funds through the blockchain network. This is a great way for users in highly governed countries, to buy goods and services online without the authorities noticing. It gives crypto users ultimate freedom. But of course there is a negative aspect, and just like cash, it is close to impossible to decrypt the transaction database if the receiver and sender have used the necessary precautions. Therefore cryptos are popular transaction methods for drug trade and terrorist organizations, even money laundering could be done through cryptos.
Today, controversially, large and famous merchants such as Microsoft, Dell and Paypal accept bitcoins. There is a web platform known as CoinMap were users are able to analyze all the merchants around the world who accept Bitcoins for their services and goods. (Those are the only ones that are shown, there are probably thousands of other ones who want to hide from the authorities.) One would quickly notice the cluster on America’s east coast, central Europe, South Korea and Japan.
Has this article now convinced you to change all your assets into Bitcoin? Well, I sincerly do not hope that is the case. Remeber, many governments around the world are still to make decisions regarding rules and regulations concerning cryptocurrencies in general. China has banned it all together, and now we wait to see what will happen in the following months. Will the number of merchants increase or decrease? Only time will tell.