In 2009 an anonymous person shook up the fiscal world by forming a tech-based unregulated currency. That very currency was further developed with another ground-breaking technology which has now been in the limelight for its usage apart from trading unregulated online money and has been a hot topic among business and financial executives lately. It’s interesting to see what both these technologies provide their users and what the future for each is.
Bitcoin is a cryptocurrency, formed and held electronically on a computer or in a virtual wallet. It is not controlled or seen by anyone, it’s decentralized; therefore no individual, bank or other institution has a control over it.
Bitcoin burst on to the monetary scene in 2009 and quickly computers across the world began running advanced programs that would mine bitcoin blocks by solving highly complex mathematical equations. ‘Mining’ bitcoin refers to discovering or verifying new bitcoins since unlike traditional currency, bitcoin cannot be printed. Money was made by miners every time they find new bitcoins or confirm a new bitcoin transaction.
Only a fixed number of 21 million bitcoins can exist (to keep away inflation), out of which only 15.5 million are at present in circulation, which means there are still 5.5 million bitcoins left to be discovered. These valuable blocks of information got their price skyrocketed with time.
You can trade online, quickly, anonymously and without hassle from exchange and regulatory bodies. The lack of trail and simplicity in use resulted in flexibility which was totally new to the financial world. However, despite all its advantages, the currency was overshadowed due to its unregulated, anonymous nature since people could easily use it for illegal transactions that would remain out of books and also for fraudulent schemes.
While bitcoin boasted of its power of untraceable transactions, it was another breakthrough that guaranteed to make each transaction transparent as well as permanent. Blockchain is underlying the use of bitcoin, almost fully opposite its more renowned alter-ego. Anonymous currency using blockchain technology has the ability of keeping permanent records of transactions that used blocks (the term for their portions of value) and people can see those changes any time online in real time. Because of this transparency, people are hopeful about blockchain; but that’s not all.
Blockchain is able to easily transfer from stocks and currencies to property rights without having to include a middleman and clearing organization like SWIFT, but still offers the same high speed, safety and low cost. Thus, while billions of dollars are transacted daily in the fiscal markets, with a middleman ‘clearing’ each transaction, a revolutionary technology like blockchain which is safer, faster and cheaper, replacing the middleman can save millions for businesses.
Read more on blockchain on SuperNet.org for more insight about this innovative technology.