The advent of Bitcoin in late 2009 signaled a new order in the global financial market. That’s particularly true because the crypto has introduced a paradigm change to the way people understand, spend and invest money. Bitcoin – a decentralized digital coin based on a peer-to-peer trustless network – continues to disrupt today’s business milieu. In all this, one has to give the credit to crypto evangelists who go the extra mile to influence and convince online users to accept the internet money. Despite its far-reaching impact, some merchants and investors are still pessimistic about what the future holds for Bitcoin. Are you skeptical about accepting Bitcoin? If so, this informative guide aims to allay those concerns. In the end, you can make decisions as to whether it is an economic game-changer or not. With that said, let’s set the ball rolling.
Addressing Fundamental Flaws with the thought process when it comes to Bitcoin
This segment will address most of the trepidation about Bitcoin.
- Too volatile to be a store of value: You see, all the forms of money have their failings and Bitcoin is no exception. In truth, Bitcoin is volatile because observers have seen its market value rise and fall over its decade-long existence. However, those are the early-stage hurdles of using the digital money. Pro-Bitcoin finance gurus strongly believe that as Bitcoin continues to attract the big players of the Wallstreet, its market value will become relatively stable. As an emerging store of value, volatility is inevitable because Bitcoin is narrowly held. Over the next couple of years, more businesses will acquire the virtual currency, thus increasing its market liquidity.
- Bitcoin is not ideal for payment: Also, Bitcoin critics have argued that the digital money does not have similar transactional throughputs like today’s government-approved money from online processors like Mastercard and PayPal. Nevertheless, data from blockchain analytics company Chainanalysis shatters that entrenched misconception. The stats show that the volume of crypto transactions via online processors has surpassed $500 million per quarter since 2017.
- Use for illicit transactions: There are growing concerns that the anonymity structure of Bitcoin has made it a veritable web payment option for funding illegal transactions. Attackers say that such transactions take place over the dark web. While there are some truths to this, it is noteworthy that such transactions had been taking place before the emergence of Bitcoin. Just like every other currency, Bitcoin has noble features that people can put to positive or negative use. According to blockchain analytics company Elliptic, the use of Bitcoin for fraudulent payments is less than 1% of the entire transaction done with the virtual currency. This is heartwarming.
- It has no intrinsic value: Some others contend that Bitcoin has no intrinsic value because it neither has government’s support nor real-world-asset backing. To be fair, nobody ever asks about the intrinsic value of fiat currency; people just go ahead to accept it. In other words, its intrinsic backing is merely people’s trust in their government. By design, Bitcoin is decentralized internet money, meaning that there is no room for third-party interference. Well, bitcoin’s raison d’etre is to provide seamless cross-border transfers, eliminate intermediaries, and maintain censorship resistance. So, one can admit that the crypto has no real-world-asset backing, but it tackles the inherent inadequacies of fiat currency.
- Competitors will displace bitcoin: As open-source software, a community of developers may decide to hard-fork Bitcoin to address its deficiencies, such as hackings and bugs. No doubt, this has happened several times, resulting in different altcoins – with the biggest forks being Bitcoin Cash and Bitcoin Gold. In spite of that, these protocol changes have no impact on its community and network footprints. Put simply, although developers have remodeled the crypto to address its weakness, the resulting altcoin has not been as useful and widely accepted as Bitcoin. To date, it remains the most preeminent cryptocurrency. Therefore, Bitcoin is lightyears ahead of its hard forks.
Is Bitcoin the Economic Game-changer?
Well, this well-researched piece has responded to common Bitcoin myths, meaning there is really no cause for alarm. According to Bitcoin white paper, there are about 21 BTC to be mined. Of the total units, about 18.5 million BTC have been produced, leaving us with a little above 2 million BTC. Blockchain data company Glassnode disclosed that over 78% of BTC are liquid. If that figure is anything to go by, it clearly indicates that investors are bullish on the crypto, as they are apparently hoarding it in the hopes that its market value keeps skyrocketing. So far, Bitcoin has not failed them as it has hit over a 1800% rise over its decade-long existence. Without mincing words, Bitcoin has come to stay because it is obviously giving government-issued currency a run for its money. Still, it doesn’t seem to have intractable deficiencies (as seen above). More importantly, it has made (and continues to make) investors overnight millionaires. So, is it the economic game-changer? In precise terms, Yes it is!
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