Bitcoin Next Generation Money

On Feb 27, 2019

samsung new bitcoin phone — Bitcoin (BTC)

Money is one of the greatest power in mankind history. Money has changed different forms from hard materials to soft papers and binary numbers. Money can be changed for value. Bitcoin will change the world by its decentralised nature and is known as the next generation money.

History of Money

In ancient times people practised exchanging values for value. If you are a farmer and you need clothes, go and find a merchant who sells clothes and offers him some grains. The deal is not completed yet if the merchant has grains he refused your offer. Now you need to find another merchant who is selling clothes and needs grains in return.

This is not a great way of trade. People need a new way to trade for what they want. Metal coins come into use for trade. A royal stamp is printed on all the metal coins and issued by the King. Everyone in the country or state accept the metal coins and exchange things for them. This is a much easier way than exchanging value for value. Now people have something that they carry with them and is accepted within the whole country.

Metals coins have many advantages over the traditional exchange systems. Metal coins also facing some problems across the years. Metal coins production cost is high and precious metals are hard to find. Metals coins are not a secure medium of exchange. There is always a risk of robbery.

The currency that survives longest in mankind history is Solidus, a Roman Empire currency. The coins serve the Roman Empire for more than 800 years without any change. The supply is tightly controlled by the Roman King which makes it most stable and longest currency the humanity had seen.

Some corrupt and greedy politicians split the solidus coins into and distribute in the public saying that they worth the same. Within 80 years of doing it, the Roman King is fallen and the empire is divided into different regions. The manipulation of the native currency hit hard on the kingdom.

Metal coins rule the currency world for more than tens of centuries. The currency evolution goes on and now we have printed paper currency known as Fiat currency. Initially, the paper currencies are backed by gold. Again some corrupt politician believes that they can use the currency as power and the currency is now not backed by gold rather backed by the government.

Government and Reserve Banks are the only ones who can control the supply of the printed currency. Literally, they can print as many dollars as they want. The average inflation rate of the U.S dollar is 2.17 percent. That means if you hold $1 for 10 years the value reduced to 21.7 percent and your $1 is equivalent to $0.883.
A little burst in the U.S economy is seen in 2008 when the whole economy hits hard and a lot of people lost their jobs and homes.

The Next Generation Money – Bitcoin

After the crash of the U.S economy, Satoshi Nakamoto released the white paper that changed the definition of money. The white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”.

A digital system that not need any third party to process the payments. A purely Peer-to-Peer electronic cash allow online payments to sent directly from one party to another party without any third party financial institute.

Bitcoin overcame the double spending problem using the blockchain technology that timestamps every transaction. The network is based on Proof-of-Work (PoW) and cannot be altered. If anyone wants to change the records he needs to redo the full network proof-of-work (PoW) which is very costly and takes a very long time due to unavailability of such powerful systems with highest computational power.

Everything is hackable in the world and Bitcoin is also but hacking the Bitcoin is not profitable. So any hacker will use its computational power to earn Bitcoin by mining rather than earn by attacking or hacking Bitcoins (which is not profitable).
This fact makes Bitcoin more safe and secure in comparison to other forms of money exist today.

Bitcoin Mining cost is increasing every year. Mining cost depends on how many computers are now connected to the network to find the next block hash. More and more people are interested in Bitcoin and the more power the network gets and become more resistant to hacks and manipulation.

Overview of Bitcoin

The supply of Bitcoin is limited to 21 million. Currently, the circulation supply of Bitcoin is 17.5 million BTC. Bitcoin has a fixed rate to produce new coins. The rate will half every 4 years known as halving. Halving is a process in which the reward per block is reduced to 1/2 every 4 years.

Currently, Bitcoin reward per block is 12.5 BTC and after the halving that is scheduled on May 2020 the reward per block will 6.25 BTC. The scarcity is the main cause that Bitcoin is worth now $4000 and hits an all-time high $19760 in Dec 2017. Maybe someday the cryptocurrency will hit $100k or $1 Million.

More and more people are looking closely at Bitcoin. Bitcoin network becomes faster with the lightning network. Big firms are now using Bitcoin and other cryptocurrencies. Recently, Samsung the leader of the mobile market launching its flagship phone Galaxy S10 with inbuilt Bitcoin and crypto wallet. Bitcoin will change the world and the power will be decentralised.

The Change is Coming, We are Part of It.