A Brief History of The Bitcoin And Blockchain
There has been a lot of buzz around the idea of investing in the future of the internet and using bitcoins as a means of securing value, but what exactly is the history of bitcoins? How does it work? What about the entire chain of transactions? And why should we care? After reading this article you may have a better understanding of the history of the digital currency and how it works.
To start, we have to understand every word with a broader context. Before the existence of bitcoins, the original cryptocurrency was an idea from the late nineties. Back then, people were talking about a free public distributed ledger that allowed anyone to track payments and transfers without the use of any central bank or government money. To complicate, the original cryptocurrency was a decentralized computerized cash transfer system that allowed anyone to track and validate transaction records on the fly. To further complicate, the original cryptocurrencies was actually a worldwide computer network that was developed to allow one person to transact for another person instantly.
Today, the term ” Bitcoins” isn’t used as a slang word any longer. People no longer refer to the currency used in the system, but rather the system itself. To be succinct, a currency is a unit of account that is issued by a government or other authority and that is typically backed by the power of some natural entity (such as gold). With a typical centralized cryptocoin, there are usually multiple units of account, with each having their own distinct interest rate, lending them a certain degree of credibility. The problem with most decentralized systems is that while the ledger is maintained centrally by the governments, individual computers around the world are all claiming to maintain a copy of the ledger on the fly, leading to confusion and inefficiencies within the system. A bitcoins ledger is also susceptible to hacking.
A problem that many worry about with the traditional currencies is their vulnerability to theft. Because they are not centralized, individual governments can manipulate the supply and demand of the money while keeping tabs on anonymous owners. As such, they do not have the ability to intervene when needed to ensure the value of their chosen currencies. There is also worry about how these currencies might affect economic conditions in the region in which they are issued. This concern is further amplified when you consider that there is no physical asset that can be owned and no central bank to back up the value of these currencies.
Since there is no central agency or body backing up these currencies, they are not subject to the same issues regarding stability. One major complaint about the traditional cryptocoin like the US dollar is that it is widely recognized as the world’s strongest currency, thus making it an attractive investment vehicle for many global businesses. In addition to this, there is also the issue of transaction fees. In general, many businesses will lose their liquidity if they are forced to pay transaction fees every time that they make a purchase or sell.
On the other hand, with the invention of blockchains like bitcoin, all of these problems that were perceived to be holding back adoption of the cryptonuts have been solved. By utilizing powerful computers together with the proper software programs, it has become possible to safely transfer money from one party to another with no need for third parties. This has made it easier for businesspeople to accept and give out payments as well as conduct business with their employees. In fact, many experts believe that this new type of technology may even be used to revolutionize the way that traditional currencies are utilized around the world. Some have even gone as far as to say that the future of the internet may belong to the decentralized forms of transaction known as bitcoins and etherium.
However, there are several problems that the new decentralized system of transaction has had to face in order to gain the acceptance that it has been able to garner. One of the primary complaints that many have expressed is the fact that the currency being used on the network, bitcoins, is not entirely free. Transactions are still not entirely free as users still need to pay fees to use the bitcoin wallet as well as transact through payment gateways. While some have theorized that this could be considered a form of “state sponsored” money transfer, others disagree strongly. Regardless of whether or not this is considered a “real” currency, there are those who insist that the ability to transfer money without involving any middlemen makes the concept of the future of the internet irrelevant.
Despite these setbacks, the future of the decentralized ledger known as the bitcoin continues to remain a bright one. While there is still some controversy surrounding the use of this currency, its creators and supporters have remained confident that it will one day replace all existing currencies. The currency that is being used on the bitcoin is much the same as the US dollar, although it is traded in pairs. As long as there is someone who will adopt it, there is no reason why the future of the internet will not see the evolution of a currency backed by proof-of-work that is capable of replacing traditional money in just about every transaction that occurs on the internet.