Before indulging our brains in the vast world of Bitcoin, let us first understand blockchain technology. For start, ‘the blockchain’ does seem to be complicated and difficult to comprehend, but its core concept stands on basic grounds of understanding. It’s a database type, which stores data in its big piles of information electronically on a computer system. Unlike other typical databases, blockchain is similar to the way the data is structured and stored. It basically collects information in groups which is apparently also known as blocks, which holds information in it. It’s similar to the quanta but without quantum physics. These blocks are connected to each other, as one block gets filled with the data, it further data starts to get storing in another block. As it is connected in a chain, hence the name ‘blockchain’. Based on this technology is one of the popular cryptocurrency Bitcoin.
Currently, Bitcoin as we can say is officially sailing in the uncharted oceans. Before COVID-19 pandemic with a known value of USD 4,000 which later skyrocketed to almost 900 per cent growth and that is a huge rise. This has been witnessed by many observers, which is not just restricted to certain investors and financial advisors but also the vast number of individuals with the internet at their grasp. A 900 per cent rise seems quite impossible to believe in such a little time but it all depends on how a currency is valued. The value of any currency depends on the beliefs of people, if people think and believes that something, anything, is precious and worth exchanging the value of that ‘thing’ increases. Later, other parameters like availability arrive and draws the picture of inflation giving it a numerical value as per the nation’s trading norms. Similarly, Bitcoin has experienced a sudden rise in its worth, as people have started to believe more in its potential and direct transaction methods i.e. without a middle entity. An interesting fact about Bitcoin, there are just 21 million of them.
In 2017, Bitcoin first raised to USD 20,000 and it secured everyone’s interest in its favor. And by the year 2018, it broke the most searched word of the Google search engine. These searches were mostly the resulted due to people’s curiosity and flow of interests in this digital currency. Though, the Bitcoin has taken quite upward stepping making it more valuable. Since, the fall of 2020, the Bitcoin market value is forecasted to be increased more in the coming time. The reports suggested that new Bitcoin wallets are being created every day with a purpose of trading. Nowadays, Bitcoin has heavily being appreciated by various companies for their future transaction, as it seems reliable. Whereas, it is also been treated as a best way of an investment opportunity. Bitcoin have started a digital transformation, slowly but effectively, but none knows to what extent. Though its main purpose of being peer-to-peer electronic cash is getting served, it may also lead to a decentralization of global currency system. Thus, it is banned in many countries.
Ever since, Paypal has featured Ethereal, Bitcoin Cash, Litecoin and Bitcoin making it easier for people to own and buy Bitcoins. Account holders can hold, sell and buy above digital currencies. The company is also planning on using similar platform Venmo. Moreover, ever since the Elon Musk invested a billion in Bitcoin, it has attracted many young investor and next gen tech savvys out there.
As like every other system, Bitcoin also gives a room for a doubt. The risk factor stays as no previous similar system has been used or tried, so there is chance that Bitcoin might turn out to be bubble. But, as there is fear of emergency expenditure utilized by central bank might lead to hyperinflation, the Bitcoin is resulted as the best source to store assets. Yet, as per various reports it can be only used for portfolio diversification, as its correlation with other assets such as cash, bonds, share is quite low.
The world is changing and so should we, but must never neglect the voids that any new technology or ideology possess, as it might or can turned out to be threat. Currently, the Bitcoin’s age is blooming, let us see whether the future holds the same grounds for the digital currency or not.