(2) What Is Bitcoin and what was the Aim Behind Bitcoin Invention? Is Cryptocurrency Good For A Business To accept As Payment? Why?

INTRODUCTION

Before talking about Bitcoin, it's inevitable to sideline some concepts like cryptocurrency and Blockchain. In other to understand the concept Bitcoin, I would like to throw light on what cryptocurrency and Blockchain is all about.

CRYPTOCURRENCY

Cryptocurrency is any form of decentralised digital currency used to pay for goods and services online. Cryptocurrency are not controlled by any centralised financial institutions like our traditional banks or centralised authority, thereby giving users 100% power over their finances.

Cryptocurrency are secured by a phenomenon known as cryptography which deals on encryption and decryption of data in the Blockchain for the sake of privacy.

Cryptocurrency is built on top of a Blockchain that helps to keep all transactions records which includes the address of the sender and the receiver, amount involved, time at which the transaction took place so that it's impossible to hack and alter the information stored in the system.
Example of cryptocurrency and their prices as of the time of making this post, according to coinmarketcap.com

BLOCKCHAIN

_{This Image Created by me from https://www.canva.com.}

Blockchain is known as public ledger that is made up of blocks that stores immutable records of transactions. Each of this blocks contains three basic components of information known as; data, hash and previous hash. Every transaction performed using cryptocurrency like bitcoin is recorded in a block, this block are connected to each by referencing each other thereby forming immutable continuous blocks known as Blockchain. The Blockchain is impossible to alter because it can easily be be detected and made invalid when the hacker tries to change the information in the Blockchain. If an information is altered in one of the competes, the remaining thousands of computer out there that have the correct information which are connected to the same server can not be altered because the information in a Blockchain is decentralised.

Blockchain is secured by cryptography which helps the Blockchain to account for transparency, trust and security, the information in a blockchain are encrypted so that only authorised receiver can decrypt the information.

BITCOIN

_{This Image Created by me from https://www.canva.com.}

Bitcoin is the first decentralised digital token ever created in the world that is used to pay for goods and services and also to store assest. Bitcoin is just like every other cryptocurrency in the crypto world, just that bitcoin was the first cryptocurrency to be invented in the year 2009 by an innovative computer programmer named Satoshi Nakamoto whose true identity has remained unknown.

According to investopedia.com, there are over 6,500 types of cryptocurrency, in all, Bitcoin remains the most popular and valuable cryptocurrency according to Coincapmarket.com. As of the time of making this post, 1 BTC is valued at $42,451.82, The second most popular and valuable is Ethereum which is valued at $2,800.69. The difference in value between Bitcoin and Ethereum is quite bigger. Currently other other computer programmers have and are still trying to create more cryptocurrencies in which some are successful and some have failed.

Bitcoin as a decentralised digital currency does not require third party interference in performing transaction, it operates directly from the sender to the receiver thereby making it peer to peer system, this has bridged the gap between the third party interference like our financial institutions which are independent centralised body. Cryptocurrency system gives you 100% power over your finance without any restrictions from transitional bank of government policy.

Bitcoin is not only an online token used to pay for good and services online but also has facilitated in trading of currencies online and has gotten more popularity in business where entrepreneur accepts bitcoin as a form of payment for goods and services with an advantage of minimised transaction fees and less time consuming.

Bitcoin is very volatile, the value of Bitcoin fluctuates as it's dependent on demand and supply in cryptocurrency market. When the demand for Bitcoin increases, the value for it also increases and when the demands for bitcoin decreases, the value of bitcoin also decreases, it's vise versa.

FEATURES OF BITCOIN

Bitcoin did not gain popularity immediately after it was invented by Satoshi Nakamoto in 2009, people were still having issues of trust based on what happened during financial crisis. What drew people's attention and trust to cryptocurrency like bitcoin was it's features and mode of operation which are;

• TRANSPARENCY - since bitcoin is built on blockchain, every transaction performed is recorded on the blockchain and this records can not be altered or deleted by anyone and every information stored in this Blockchain is open for everyone to access. Blockchain helps to account for transparency, trust and security.

• DECENTRALISATION - transaction runs in a peer to peer network, the investor have 100% power over his or her assets (financial assets) without getting any restrictions as a result of government policy or from financial institutions. In this case the owner or investor has the sole right to do what ever he wants his or her assets.

• FASTER TO PERFORM TRANSACTION - to perform transaction using bitcoin, you only need your mobile phone or computer, internet to perform transaction in your wallet. This makes it faster to transfer funds to anywhere in the world unlike the financial institutions that you have to go through some process like providing valid documents and details of yours and that of the receiver basically only on working hours before they can carry out your transaction which may take some days to complete.

• A DIGITAL CURRENCY STORED IN A DIGITAL WALLET - bitcoin is not like the physical paper currency issued by our traditional banks that can easily be stolen by thieves but bitcoin is only stored in the digital wallet in which unauthorised user can never have access to it. The wallet is accessed by public key and private key, the public key is the address of the wallet in which other people uses as an identifier to send tokens to you while the private key is known as the password in which you can use to access you wallet. In crypto ecosystem, when you lose your private key to your wallet, you automatically lose access and all the assets in that wallet .

THE REASON BEHIND THE INVENTION OF BITCOIN

During the financial crisis in 2008 when the house market collapsed, so many investors were frustrated and unhappy about it as it made many people and investors mistrusted the government and blamed the the government and some financial institutions over the incidence. Satoshi Nakamoto saw to the end of this drama, he decided to come up with a currency that is not dependent on Central authorities. Satoshi Nakamoto came up with the invention of bitcoin that runs on decentralised system using a cryptographic protocol that will aid;

• to providing an alternative means of sending and receiving funds through the internet in any part of the world which is faster and easier. All you require is your computer or mobile phone, internet to access your digital wallet and carry out your transaction with our any third party interfering with the transaction. Also the issue of variation in currency between two or more countries is undermined as you don't have to visit your local bank to convert your local currency to the receiver's own currency in another in other to send funds. Using cryptocurrency such as bitcoin, it can be converted to any currency in the world.

• to bridge the gap between users (investors) and the third party -** this is to give users 100% power over their finance thereby giving them the chance to decide how they want to use use their funds without the interference of the financial institutions or government. Also also gives sender at this other end opportunity to interact directly with the receiver at the other end (peer to peer system).

IS CRYPTOCURRENCY GOOD FOR A BUSINESS TO ACCEPT AS PAYMENT WHY?

As a business owner, cyptocurrency is really good for a business owner to accept as payment as it offers you with so many advantage as follows;

• BRINGS NEW CUSTOMERS - a business owner might get the attention of new customers because of acceptance of cryptocurrency as payment for goods and services as most customers feel that moving out with fiat currency is not safe and appears to be bulky and they might easily be attacked by armed robbers, there may be people that do not have credit card, they can still have the option to pay with cryptocurrency, this is a good innovation to business in this 21st century.

• PRIVACY - most customers do not like to give out their personal identity in paying for goods and services, They do not want to give out their details like address, phone number, name, date of birth. This could be the reason they do not want to buy from some persons who only accept fiat currency.

• FASTER TRANSACTION - going through our traditional bank to perform transaction especially for customers outside the country, it sometimes takes up to 24 to 48 hours to complete it but when you accept cryptocurrency, transaction only take some minutes, no matter the location of the sender around the world. This makes cryptocurrency the fastest means of payment for goods and services.

• TO AVOID BIG CREDIT CARD FEES - to perform a transaction using your credit card, you pay some percentage to your credit card company as transaction fee but in a business which accepts cryptocurrency very little transaction fee is paid for the transaction which is under 0% so this helps to save your customers cost.

• TO ELIMINATE BOGUS CHARGE-BACK - chargeback is a complaint to credit card company where the buyer makes complain to his credit card company and the credit card company reverse a transaction without finding out if the buyer have returned the goods and services received from the business owner. So using cryptocurrency eliminate the room for this fraudulent activity in your business which makes all sales final.

• EXTRA PROFIT - since the value of cryptocurrency is very volatile and fluctuate which makes the price goes up and down depending on the demand and the supply. For example, If you make a sale of a product by accepting cryptocurrency when the value of that particular cryptocurrency is low, then the next day the value of that particular cryptocurrency increases, you make good profit from that.

This is life story of a famous rapper known with to the stage name 50-Cent from USA forgot that he sold one of his albums titled "Animal Ambition" in 2014 by accepting BTC as a form of payment. He sold the album for for 700BTC, then the value for 1BTC was $662, thereby the album was worth over $460,000 at that time. As of 2019 when he remembered that he had bitcoin in his wallet, the 700 BTC was
worth over $8,000 000 dollars. 50-Cent made much profit from his sale and this made him more richer than before.

CONCLUSION

As the world is going digital, Cryptocurrency is the talk of the town because of the benefits it offers to the society at large. Many enterprise have adopted the use of cryptocurrency as an innovation embedded in this 21st century. Bigger thanks to the person of Satoshi Nakamoto for inventing the first cryptocurrency called Bitcoin.

Cc:
@stream4u