A detailed understanding of Bitcoin!

If you look at the data available over the internet over the past year, the value of bitcoin has risen sharply. Even though there has been a lot of price volatility, cryptocurrencies have managed to stay in an uptrend. But there is no certainty about the uptrend. There could be a future where bitcoins will be worth nothing, so it is one of the riskiest investments today. Before we talk about the future of bitcoin, it is essential to understand which bitcoins actually last for hours. Some skeptics believe that the bitcoins and cryptocurrency space may collapse at some point in the future. But the real crypto believers say that bitcoin could be the future of currency. However, no evidence proves such a statement. Check bitcoinsmarter for detailed information on bitcoin trading.

We define money as something in exchange for getting goods or services. We can think about the goods or services we can buy; you need the money such as items for everyday use, real estate and much more. Today, many people confuse bitcoins with money. They ignore that bitcoin itself is a commodity and we buy it. An essential factor and attention to be paid to the fact that bitcoin does not physically exist and therefore cannot be considered a commodity. There are many controversies around the world regarding cryptocurrencies. We cannot be certain about the future of digital tokens unless and until we have explicit knowledge about them. We will read some necessary details about cryptocurrencies to have a clear understanding of them to decide whether they will be the future of money.

BTC vs Cash

Paying for anything with bitcoins is quite simple, like paying cash for goods or services you buy in your everyday life. However, if we pay attention to the basic model of both things, they are completely different. When you pay with cryptocurrencies like bitcoin, you take a piece of your bitcoin and give it to someone else in exchange for a service. Therefore, you cannot be sure whether the other person is willing to accept it or not.

Rather, cash is something that the government regulates. It is a commodity for which the government will be willing to provide its value. Therefore, cash is definitely very different from the bitcoins we use in everyday life today.

What if we forget our wallet password?

A fundamental concern arises when we forget the password of our cryptocurrency wallet. Well, it is essential to be taken into consideration as this is what usually happens these days. Even if people are less prone to damage from internet hacks to their cryptocurrencies, they forget their wallet password. To ensure security, they also don’t tell their passwords to anyone else, and once they forget, the cryptocurrencies are lost forever. Yes, the same can happen to you. Therefore, we can say that we are not holding onto our cryptocurrencies in the end. They exist in a digital place and so we can’t be sure if we have them.

Comparison with the regular financial system

When we think about making bitcoin the future of money, the first thing that comes to mind is its comparison to the mainstream financial system. If there was no government interference in the financial system, it could have been just like cryptocurrencies. There would be no regulatory body so prices can fluctuate. Also, the government is not liable to pay the bearer the exact value of the money in his possession.

However, cryptocurrencies are different. The financial system that runs through the cryptocurrencies is not insured and does not guarantee you the possession of any value. If one day everyone gives up believing that bitcoin will be the future of money, it will eventually lose its value in the market. Cryptocurrency enthusiasts will not be very happy that day. No one will be willing to take your cryptocurrencies in exchange for anything, which is why you certainly cannot compare them to the regular financial system.

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