Will Cash Soon Be a Thing of the Past?
We live in amazing times — an age when something that doesn’t exist physically is worth more than gold. We are talking about cryptocurrency, the phenomenon that turned the traditional financial system upside down.
The first virtual coin in human history was Bitcoin. Its creator, an anonymous person or persons named Satoshi Nakamoto, changed our understanding of money forever. He invented a currency that became the earliest use of blockchain technology. The blockchain is broadly defined as a chain of data blocks. Each block references the previous one and contains data, its own hash, and the hash of the previous block. It also contains the sender’s and receiver’s encrypted identifiers. One of the main reasons for blockchain implementation in the financial sphere is security.
Thanks to the groundbreaking technology, BTC became the first currency to solve the double-spending problem: digital files, unlike paper money, can be cloned and spent twice. In a given system, no central server or third-party authority exists. With the invention of Bitcoin, a new era of the digital economy began — the era when cash is becoming a museum piece.
Great things have small beginnings. Launched in 2009, Bitcoin started with a worth of $0. No wonder the majority of people took it with a grain of salt. But time passed — eleven years of time. With BTC prices soaring, people have started treating the magic internet money seriously. It brings what they haven’t seen yet but probably need. Hence, we thought it would be interesting to lay out a balanced overview of the core benefits of Bitcoin. Let’s get down to business!
Bitcoin has a unique feature — namely, decentralization. There isn’t one single issuer, such as a bank or government. Rather, the coin’s existence in the economy is ensured by its holders. One more thing: the validity of a transaction is determined not by a central organization but by the entire community. Bitcoin guarantees economic immunity because it cannot be forged or destroyed.
Low Transaction Tax
Another advantage is the low commission compared to those of bank transfers. The fee does not depend on the geographical location of the payee. The only indicator that affects the commission percentage is the sum of payment. The higher the amount sent, the higher the percentage. This system is essential to avoid an overload of the blockchain network.
Bank transfers take several business days. If you send money to a foreign account, the process will be a long one because the bank checks to see whether a transaction is legal. You do not have such problems sending or receiving digital currency. Most transactions are conducted in minutes, regardless of the location of the sender and payee. From an operational standpoint, it’s a breeze. It’s super easy. You can send money online 24/7/365.
Market-Oriented Price Formation
The value of crypto is not dictated by a central authority. No one can force you to use or accept it as a method of payment. The cost of electronic money is determined by supply and demand. This is what a free market economy looks like.
Users’ Control Funds
Manipulation happens everywhere. Banks reduce the value of a currency’s purchasing power by printing and issuing new money. By directing new cash to certain groups of individuals or organizations, they can redistribute wealth without even reaching into the pockets of specific citizens. Investment establishments can freeze your bank account or undo a transaction. They can invest your money at will without you knowing. You no longer have control over your assets. That’s what we find worrying. That’s what we want to change.
With Bitcoin, such manipulations are impossible. First and foremost, Bitcoin has completely limited coin creation. Second, neither the government nor the banks can watch what you are doing. Transactions cannot be canceled, and your account cannot be frozen. While it may sound like a pipe dream, this is our new normal.
The no-cash trend is growing in popularity worldwide. This is Bitcoin’s moment. So-called hashcash can finally compete on a level playing field with fiat. While it needs some more time to become a perfect substitute for traditional money, the world and the internet will have a common currency at the end of the day. Crypto enthusiasts believe that it will be Bitcoin. This reality may occur in a year or more, but what is clear is that it can leave everyone better off.