What was the need for the invention of Bitcoin, and what is its future?

Bitcoin

Bitcoin was the first cryptocurrency introduced back in 2008 at the time of the financial crisis. It is a digital currency designed by a very famous but mysterious entity known as Satoshi Nakamoto. In 2008, a white paper was released by Satoshi stating about the new digital currency, Bitcoin, as an electronic cash system that is decentralized in nature. Suddenly, after one and a half years of bitcoin invention, Satoshi got disappearing leaving the bitcoin community in disguise. No one knows his real identity, and after his disappearance, many controversies were made about Bitcoin and its underlying technology.

Many events that were around the invention of bitcoin remain a mystery after the disappearance of its invention. He left the entire bitcoin network in the hands of the bitcoin community. What do you think about Bitcoin, and do you consider that it has any real value? You can contact with Immediate Edge here app to learn more about bitcoin.

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Why was Bitcoin invented?

The housing market collapsed in 2008 at the time of the financial crisis, and not only Satoshi Nakamoto but the entire market was upset to see the results of this. Some people distrusted the government or any central authority and thought that there should be a currency independent of government. Bitcoin becomes the first cryptocurrency that was introduced with a combination of decentralization and cryptographic principles.

Bitcoin is decentralized in nature, which means that it doesn’t involve any centralized organization and is not regulated by any central authority. The value and market of bitcoin are controlled according to its demand and supply in the market. When someone says that bitcoin is a store of value, yes, it is invented to introduce the general public to a medium of exchange that doesn’t involve any third-parties and in which no user has to rely on trust.

What were the trust issues with centralized organizations or authorities?

If you have read about the white paper introduced in 2008 or know about it, Satoshi Nakamoto stated that the reason behind the invention of Bitcoin is to overcome the weaknesses that traditional monetary systems had. No doubt that banks were doing their work accurately, but banks keep a check on money to know that money is spent reasonably, which means mediating all the transactions. This incurs a plethora of expenses that are passed to users that they have to pay as fees.

Satoshi overcame this weakness and made transactions of bitcoin irreversible. Irreversible transactions eliminated the need or involvement of banks or any other central organizations. This also prevented fraudulent funds, which means retailers or vendors weren’t required to prevaricate sales by taking their customers’ or clients’ personal information. There was also double-spending, which means spending the same money twice, and Satoshi even found a solution to this issue. He used cryptography which means an amalgamation of computer science and mathematical theory, which no longer required bank.

Is there any future for Bitcoin?

The invention and regulation of bitcoin have given rise to illegal trade. Even the users who learned first about the potential of bitcoin were the dark web users. Illegal trade was carried out with bitcoin because bitcoin is the only digital currency that provides the feature of refund-protection and anonymity. Only after few years since the invention of bitcoin was it associated with illegal activities.

There are bitcoin users across the world, and the value of bitcoin that is currently in circulation has exceeded $1 trillion value as bitcoin with the main goal of replacing the valuable asset, gold, to be the best store of value. Despite the arguments made on Bitcoin, bitcoin is a far better store of value than gold which also depicts that the market value of bitcoin will be greater than the market cap of gold in the future.

The Bottom Line

Bitcoin wasn’t expected to maintain its position in this highly competitive market. Still, bitcoin’s unique features impressed people worldwide and have now entered the mainstream even though crypto analysts believe that bitcoin is the monetary system’s future. However, it is still difficult to say anything as of now because of its volatile market.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.