Bitcoin is a cryptocurrency, created and held electronically on your PC or in a virtual wallet. No one controls it or sees it – it is decentralized so no person, institution or bank controls the currency. It was the year 2009 when bitcoin burst onto the financial scene, and soon computers all over the world started running sophisticated programs that would mine blocks of bitcoins by solving extremely complex mathematical equations. bitcoin means to discover or verify new bitcoins because unlike traditional currency, bitcoin cannot be printed. Miners make money every time they discover new bitcoins or verify a bitcoin transaction.
There can only be a fixed 21 million bitcoins [to prevent inflation], out of which 15.5 million are currently in circulation, which leaves 5.5 million bitcoins to be discovered. These valued blocks of online information skyrocketed in price as time went on and investor appeal in the new technology grew.
Trading could be done online – anonymously, quickly, without hassle from regulatory and exchange bodies. The ease of use and lack of a trail led to flexibility unheard of in the financial world. But for all its benefits, the currency was overshadowed because of its anonymous, unregulated nature as it became easy for people to use the currency for transactions that would stay off the books, as well as for schemes that people.
While bitcoin had the power to make transactions untraceable, it was another innovation that promised to make every transaction transparent and permanent. Underlying the use of bitcoin is blockchain, which is almost entirely opposite its more famous alter-ego. possesses the ability of having permanent records of the transactions the blocks (the name for their portions of value) are used for, and at any time people can see those online in real time. It is this transparency that people have hopes in, but that’s not the only thing blockchain does differently than the cryptocurrency it drove for so long.
Blockchain can easily transfer everything from property rights to stocks and currencies without having to go through a middle man and clearing institution like SWIFT, while offering the same safety, higher speed and lower costs. Consider it from the financial perspective: billions of dollars are transferred daily in the financial markets, with every transaction being “cleared” by a middle man. Replacing the middle man with a revolutionary technology that is faster, cheaper and as secure will help save millions for businesses.