Steemit Crypto Academy Season 4 Beginners' course - Task 5: Bitcoin, Cryptocurrencies, Public chains.
(1) What Is Cryptocurrency and How You Would Like To See Cryptocurrency In The Feature?
OR
(2) What Is Bitcoin and what was the Aim Behind Bitcoin Invention? Is Cryptocurrency Good For A Business To accept As Payment? Why?
OR
(3) What Is Public Chain and What will be the Advantages and Disadvantages of Public Chain?
Before, I will tell you what bitcoin is, lets do a preliminary study on Money, Money is simply an means of exchange for a value that is being done. You can only get money if you do something, Money doesn't fall from trees or the sky. Money is used to also acquire things. Throughout history Money have which is a symbol for value has taken many forms. Many materials has been used to represent money such as shell, metal, cowries, gold etc. has been used in the past to serve as medium of exchange which is money.
However for something to have value people have to trust that you can rely on the value and has long durability. Up on till 100 years ago, we have always trusted somethings to represent money. Changes have been happening that made the trust of that something to reduce drastically and the trust is moving to someone. for instance, for long time, people find it disturbing walking around with bars of gold, metals or even cowries. So this led to the invention of Printed money which is called paper money.
This was how it worked, you will take your Gold that has the worth of $10,000 to the bank or government, the bank will give you bills amounting to the $10,000. Paper money was seen as the final solution to the initial problems that Gold had brought, such as , Paper was easier to carry, easy to spend also, you can also take your money to the bank and keep it there for as long as you want and this has been taking place for a very long period now. So people used it as money as an instrument of Practicality and convenience.
Due to Many micro economics changes the paper money was disconnected from the gold in terms of its value. Then the Government came into the scene properly, by telling the people that she will be determine the value of the paper money. So the people agreed with what the government said and begin to trade with the paper money.
The People trusted the government promise so well, even when there is no actual commodity that was backing the paper money, due to trust, it led to the creation of the FIAT money. FIAT simply means Bye Decree in Latin, which means that the pounds, euro, dollar or any other currency has value because the government placed on it.
The paper money was now knew as Legal tender, it was either bank note, coin etc which must be accepted if it was offered as payment. This means that the value of today's money is from a legal backing given to it by a central authority which is the government. This is how the trust changed from trusting something to trusting someone which is the government.
The Fait money has 2 main problems
- Fait money is Centralized: There is a central authority that controls and also issues it which is the government or the central bank
- Fait Money is not limited by its quantity: The Central Bank can print as much money as they want and this can lead to the inflation of the currency. One major problem of printing money is that the more money you in the society, it makes the value of that currency to drop. This is why as the year goes by, the value of each currency is reducing. In a country, where the price of goods and services is rising, this can simply means that the country's currency purchasing power is drastically reducing.
The fact that Fait money was in place, the move to digital money was pretty simple. There is a central authority that distributes money already, so why don't make money Digital and the authority keep track of who owns what. This is where the invention of the first cryptocurrency came into the market which is called Bitcoin, but what is cryptocurrency? Cryptocurrency is a digital currency that allows transactions to be done and also verifies and record them in a decentralized system using Cryptography.
Bitcoin was developed by a developer Satoshi Nakamoto in 2008, and nobody saw him again became the first Digital Currency in the world. Satoshi Nakamoto was trying to create a digital currency system that was decentralized which simply means, it was not controlled by the government or any other authority. We can say that Bitcoin is Synonymous with money but it can not be seen and carried about how money is been carried about. it is done electronically. We can say that Bitcoin is A Digital Currency, that its transaction is not controlled by the government or any central authority, it can be used to purchase whatever you want to purchase as far as you have your internet connected. it works on Software and Cryptography.
What was the Aim Behind Bitcoin Invention?
The Main reason why Bitcoin was invented was to decentralized the control of the cryptocurrency. We know that Satoshi Nakamoto Created Bitcoin in 2009, which was as a response to the mighty Financial crisis as at then, and by then the people relies on banks for most of their financial transaction.
So Satoshi Nakamoto, thought about an idea to take the monopolistic power out of the banks. He Then created a peer to peer system that needed no third party interference. Individuals now have the full control over there money with the introduction of Bitcoin. In this way, The banks and other financial institutions were not needed for a successful transaction to take place. And also to maintain the value of the currency. Currency was sent faster with a very low fee juxtapose to traditional banking system.
Is Cryptocurrency Good For A Business To accept As Payment? Why?
As i have said earlier that cryptocurrency are digital currency which is gradually replacing the fait paper ( legal tender). Cryptocurrency is been secured by the Cryptography, that helps to reduce fake or double spend. Cryptocurrencies includes the following Bitcoin, Ethereum, Dodge coin, etc., But bitcoin is the first cryptocurrency and it is ranked number 1 in terms of value in the crypto world. Bitcoin which is a type of the cryptocurrency is really good for business to accept as a payment medium due to the under listed reasons.
- Firstly, in business you have the full control of your money, which makes it decentralized. You can't be subjected to certain amount of money either daily or weekly or monthly. You can decide take money whenever you feel like.
- You must not go to the bank to queue or go to the ATM stand to queue, to withdraw your money for business. From where ever you are you can send and receive bitcoin, all that is needed is to have a phone or a laptop with an internet connection.
- Businesses don't like delay, going to the bank can cause you lot of time wasted. from the comfort of your home, you can transfer and receive payment, the is another reason that make cryptocurrency very wonderful to accept as payment. because it speed.
- Most Banks and Financial institutions charges huge amount for transfer fees, but cryptocurrency charges are way cheaper compared to the traditional financial institutions.
- Using bitcoin as a means of payment in business, makes it more easier to do international businesses. You can send and receive funds from any part of the world. International transfers are way easier using Cryptocurrency.
- With Bitcoin, you can easier purchase anything you want to buy, no matter from any part of the world. Businesses are seriously accepting it and looking at it, it might replace the fait paper with time.
- Bitcoin theft as a businessman is very hard, Due to the high level of security in the digital wallet , it is impossible for a third party to access your financial details. There is a very high level of Privacy in the crypto world.
In conclusion, Cryptocurrency has proven a lot to us, but the most important one is the decentralization, which makes us to have full control of our funds without the interference of any kind of third party. Cryptocurrency has being embraced by so many countries which shows that it can be trusted and not only countries but international firms too, even men of influence in the world has being using cryptocurrency. Cryptocurrency has come to stay and with time it might overtake the FIAT money and the whole world will start to use it as it currency. Let's embrace cryptocurrency and use it properly.