Bitcoin: its growth towards big money?
For most of its existence, bitcoin attracted support from three primary overlapping communities: the small group of early Bitcoin purchases investors and genuine believers, the enthusiasts for blockchain technology, and the money-hungry speculators. In addition, old-fashioned, stuffy finance types have recently become a separate community. For info regarding online trading.
Instead of a central bank, bitcoin’s original design and Nakamoto’s whitepaper implied mistrust of conventional financial institutions. This made bitcoin money with philosophy. Yet Nakamoto disappeared. The system designed to function without trust experienced trust challenges as digital money gained popularity.
BORN IN A CRIME
The banking crisis influences the philosophy of bitcoin. To start, there is a particular mistrust of financial institutions. In addition to other betrayals of trust that occurred during the financial crisis, a money market fund under Reserve Primary Fund breached the law. As a result, you would receive 97 cents back on a $1 investment.
According to USA Today, $3 trillion had been invested in money market funds as of September 2008; at the time, they were thought to be as secure as a real savings account. They did, however, have higher rates of return because they are less secure than savings accounts, as investors discovered to their shock and dismay. (Subsequently, money market fund regulations were altered.)
Bitcoin serves as a reminder of how peculiar money is at its core. Bitcoin emerged as the most viable response to society’s general concerns about the financial system among all the prior attempts at internet-based currency, and there were many.
DOWN IN THE GREEN
Bitcoin has a framework that makes its beliefs clear. A peer-to-peer financial network is a notion reminiscent of classic Silicon Valley disruption. Bitcoin challenges that monopoly and acts partly as a method of government-based resentment.
This idea is implied even in the word “mine,” as many investors consider bitcoin to be a commodity similar to gold. (Let’s bow before the gold standard and continue.) Additionally, bitcoin is a limited resource; according to the existing system, there can only be 21 million bitcoin worldwide.
Already mined are more than 17 million. The remaining portion will be made available at a consistent mining pace, which has slowed as more resources have been created. As a result, no president or central bank can speed up the economy or raise inflation to further their political goals.
Distributed ledger technology is another essential tool for eluding banks and the government. The public portions of the “blockchain,” a record of all transactions across time, are open to everyone. Theoretically, no institution is obligated to guarantee reliable transactions.
However, as the past ten years have shown, eliminating trust from one area of the financial system causes trust issues to arise in other areas, which is how the counterculture came into being. You had to persuade other people that their bitcoin investment was good for it to be profitable. On websites like IRC and Reddit, bitcoin groups have sprung up.
CONSTRUCTING A SMARTER COIN
But despite the collapse of Mt. Gox and the discovery of the Silk Road, bitcoin kept gaining popularity. According to Cointelegraph, Microsoft started taking bitcoin payments around the end of 2014. In addition, the Economist featured a cover story about bitcoin in 2015. Other cryptocurrencies, like Ethereum, also based on the blockchain, started to appear around this time.
Another significant movement in the community began with Ethereum, when the focus shifted from bitcoin to blockchain technology.
The US Securities and Exchange Commission, also known as “the money cops,” said in 2017 that certain financing transactions for virtual currencies would be treated as securities. It then launched lawsuits against numerous shady coin projects for breaking securities laws.
The unexpected success of bitcoin outside of the banking sector has a price. Since so many individuals are mining bitcoin, the price of the powerful chips needed by researchers has increased, making it more challenging for, among others, astronomers to carry out their work.
Despite numerous attempts, nobody has figured out who Satoshi Nakamoto was. Although there have been many challenges, no one has yet offered the undeniable evidence: trading Nakamoto’s bitcoin. The banking system’s confidence issue appears to be over. Institutional investors and banks, who the system was intended to circumvent, may very well be the largest beneficiaries of the new bitcoin era.