The concept of Bitcoins is as controversial as it is confusing for many. While numerous individuals do not understand the virtual currency, it is gaining attention for its exorbitant worth. By current measures, one Bitcoin is worth $8528. What makes Bitcoins so confusing is there is not an easy conversion into standard currency. This is largely because the relative value of a Bitcoin is in near-constant flux.
Bitcoins break down to eight decimal places, the equivalent of a Bitcoin penny. This means users can send 0.00000001 Bitcoins. Further compounding this confusion is the term Bitcoin is also the name of the system that manages payments, transfers, and storage of Bitcoins.
Bitcoin differs from traditional financial institutions in one major way. A single entity does not control and operate Bitcoin like MasterCard. Instead, a decentralized network of computers across the globe keep track of it. This is very similar to how Wikipedia operates, but with writers and editors instead of computers. The computers storing all of these transactions form what many refer to as the blockchain.
The Future of Bitcoin
Hundreds of news articles have crowed the value of bitcoin while just as many deride it as criminal. While it is true that criminals can exploit the system (users do not have to reveal their identity), its value in the business world and international exchanges keep companies at the table.
However, many are wondering where all the fuss came from in the first place. Bitcoin’s meteoric rise in worth is the main cause. In January of this year, one Bitcoin was worth less than $1000. Because its current value is more than eight times that amount, investors started paying attention.
The biggest concern regarding Bitcoins is security. There is no regulation, little oversight, and hackers target Bitcoin wallets on a regular basis. Unlike banks, when a hacker robs a user, there is no way to get the Bitcoin back. There is also no insurance for the cryptocurrency, so the individual has no resources to get his or her money back.
Many Americans question why the government has not stepped in to shut Bitcoin down. The criminal implications leave many wary and confused by the lack of action. However, the decentralized nature of Bitcoins makes this almost impossible. The computers that monitor Bitcoins are worldwide. The system would continue with or without American investors.
Although Bitcoins are controversial, many businesses value the potential of blockchain to innovate how they perform transactions. To learn more about how Bitcoin is disrupting and revolutionizing business operations, contact the experts at MMA Trion.