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| | Rising popularity of BitCoins and cryptocurrencies (4th Apr 24 at 1:12pm UTC) | | In today's highly digital world, ways of doing various things have changed dramatically – staying connected with family and friends, doing business, learning and of course – trading. Over the years, technology advancements have provided us with the convenience of online payments. Trading online is possible with credit or debit cards, using payment services, such as Paypal, or using cryptocurrencies.
Cryptocurrencies are digital assets designed to serve as a medium of exchange and uses cryptography to secure the transactions as well as to control the creation of new units of the currency. Cryptocurrencies are usually classified as a subset of alternative currencies, also called digital or virtual currencies. As opposed to standard money and centralized banking systems in the world, cryptocurrencies are controlled decentralized – using blockchain transaction databases.
BitCoin became the first cryptocurrency in 2009. Interestingly, BitCoin inventor, Satoshi Nakamoto, did not want to invent an alternative currency but it emerged as a side product to another invention. His initial plan was to develop an electronic cash system that is completely decentralized with no servers or central authority. But over time, BitCoin has gained great popularity despite numerous tries to develop new cryptocurrencies (most of them are called altcoins from alternative and bitcoin, showing their relatedness to BitCoins).
Why cryptocurrencies are so popular?
As one of the key driving forces behind the increasing value of BitCoin, is its widespread usage across the world with many now choosing to make payments via BitCoin instead of using other methods. For consumers, a possibility to use BitCoin means increased ease and convenience in addition to higher security if comparing to a credit or debit card due to significantly lower risk of identity theft and fraud during online trading. Popularity among consumers is growing also because acceptance of BitCoins is increasing among businesses. Nowadays, trading in real life is also possible using BitCoins – from restaurants and coffee shops to real estate companies and other establishements who accept BitCoins. It is more than likely that with the growing value and popularity, the number of businesses and retailers that accept BitCoins will continue to rise. Among others, it is possible to point out various other benefits of BitCoin:
Quick and cheap transactions – when transferring BitCoins, transfer fees are significantly lower compared to other conventional types of money. In addition, international money transfers can take from several days to more than a week to be complete, whereas BitCoin transaction is generally comple within an hour. This is due to BitCoins being completely global and subject to very few laws or restrictions of any country's central banking institution;
This leads to the next characteristic of BitCoin that is appealing to investors – as it is completely digital, BitCoins do not have physical production or storage issues, it is not controlled by the government or the central banking institution of any country, therefore it cannot be influenced by monetary and fiscal decisions or political actions;
In the world of financial trading, BitCoin is a new area of investment, which brings rather huge volatility and behaves differently than other conventional currencies. In late 2013, investors started to see BitCoin as an attractive investment vehicle. BitCoin gained in value massively from 200 USD in November 2013 to more than 1000 USD only a month later. It is important to point out, that volatility not always leads to exceptional gains. One of the reasons for BitCoins volatility is the uncertainties related to its legitimacy. Many countries still have not decided how to regulate cryptocurrencies. And when they do, it may have a great impact on the value of BitCoin and its future as the most popular cryptocurrency. | |
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