Technology has never failed to bring us interesting things to make people’s lives easy. Bitcoin is the latest addition that makes the payment system fast and flawless. However, it’s not all about the payment system, it is a completely new form of money and an investment asset too. Trading Apps is a digital currency, to be more precise, a cryptocurrency. Let’s clarify the idea by talking in detail about these various aspects of bitcoin.
Digital currency – Bitcoin:
A digital currency is a currency that is based on a digital network. Bitcoin is such a currency with more technological detailing. It is safeguarded by cryptographic encryption. That’s why it is called cryptocurrency.
Bitcoin is the first-ever cryptocurrency that was invented in 2009 by a man or a group of people known as Satoshi Nakamoto. Before its creation, there was a concept of electrical money on which many developers and cryptographers were working. Satoshi Nakamoto published a whitepaper with the code and description about this blockchain technology in 2008. The technology of Blockchain also came before bitcoin. Initially, there was a digital currency system that was based on Blockchain technology. Finally, Satoshi Nakamoto launched the first crypto in 2009 as bitcoin.
How is it different from fiat money?
The main difference between bitcoin and fiat currency, and bitcoin does not have any physical form you can find in every fiat currency in the form of notes and coins. You can not physically hold bitcoin but can hold fiat currency. But, it is the basic thing. To completely understand how bitcoin is different from fiat currency you have to know its in-build technology and how it functions.
- In the traditional monetary system, the main role of circulating money is of banks and governments. Government centrally regulates the monetary system, issues currency, decides its value, and the bank works on the circulation and transfer of money. As a result, political parties can manipulate the value of their fiat currency as they hold the power of the government.
But, the bitcoin network is decentralized. It is not regulated by governments or banks. It is an open-sourced network that anyone can use and for the transfer of bitcoin, no one has to depend on the government, banks, or any central authority.
- The banking system is complex. The transactions happen from one person to another person via different banks. Data is stored separately in different bank servers. So, fromthe perspective of the whole fiat currency transaction network, the system is complex, and you cannot make a transaction with fiat currency with anonymous identity.
The Blockchain is the distributed network of the whole transactional data of the bitcoin network. During a specific time when transactions happen in the network, the record is stored in a block and time-stamped. This block gets verified at the time of the next transaction and with this block the next transactional data is added and stored in a new block that is again added to the chain. Moreover, you can keep your identity anonymous while you make such transactions with bitcoin.
- By means of convenience also, there is a difference between fiat currency transactions and bitcoin transactions. For fiat currency transactions you have to depend on banks. The transactions are time-taking and involve unnecessary charges.
On the other hand, bitcoin is an open-sourced network where you can transfer funds directly to the receiver. So, the transactions are very smooth. International transactions take almost no time. Also, the transaction charges are negligible here.
Role in the economic market:
Bitcoin has a huge role in the current economic market. It is the main attraction of today’s economy. Bitcoin has become the asset that is compared to gold as per the store of value. Bitcoin’s value was at an all-time high in the middle of the year 2021. It is considered as a digital gold.
Though it is a highly volatile currency, traders and investors think the currency and its volatility are great for making a profit. Many people have become billionaires and millionaires by investing in bitcoin through many bitcoin exchange platforms. Moreover, if you are keen to invest in Bitcoin or the national cryptocurrency of Sweden, then you can log on to ekrona app, and invest in it. This cryptocurrency is regulated and safe, and hence trading in it is secured.
The idea about the digital currency bitcoin might be clearer after the detailed description. There is even more to understand. The technology of bitcoin has almost changed how people used to think about the economic system. Probably, bitcoin has more to reveal in time.