Bitcoin, Cryptocurrency, and Public Chains - Steemit Crypto Academy Season 4 - Homework Post for Task 5
I’m very excited to part take in this fixed course task 5. After reading the lecture notes you provided, I will present my assignment for the questions asked.
Q2 : QUESTION 2: WHAT IS BITCOIN AND WHAT WAS THE AIM BEHIND BITCOIN INVENTION? IS CRYPTOCURRENCY GOOD FOR A BUSINESS TO ACEEPT AS PAYMENT? WHY?
Back in the days mankind used dowries as a form of legal tender or Payment of any goods and services, over time we have evolved upgrading from the cowries to fiat money. Since we are constantly improving our way of life, we have created digital currencies that can be used in place of these fiat money they are called ‘Cryptocurrencies’. This brings me to the question at hand today, the first cryptocurrency thats was created was Bitcoin.
What is Bitcoin??, Bitcoin is a digital currency just like the normal fiat currency just that you can not physically hold Bitcoin like our normal currency. It was developed in 2009 by Satoshi Nakamoto. Bitcoin was created to serve as a legal tender for the payment of goods and services which will be free from any central authority(No middle man ).
According to my research the real identity of Satoshi Nakamoto has not be revealed even though several imposters have claimed to be him. Wow! What a legend.
When Bitcoin was first created it was worth $0 in 2009, but currently worth over $53k. Bitcoin can be mined, when I say Bitcoin can mined I mean people(miners) use high power or super computers to solve complex mathematical problems to validate and verify a transaction before adding it to the block.
In 2012 Bitcoin experienced its first ever halving. Halving done so that Bitcoin isn’t all over the world (to make it scarce) so as to retain its value when this is done, the Bitcoin rewards is split into two and given to the miners (people who use powerful computers to solve complex mathematical problems). 50BTC was halved to get 25BTC which was rewarded to the miners.
After ever 210,000 blocks are created by the miners thats is approximately 4 years Bitcoin undergoes halving currently it has been halved 3 times. The next one is supposed to happen in 2024.
As I mentioned early on the Bitcoin isn’t controlled by any central authority so users can decided to send at any time he or she desires. Someone asked me a question how does Bitcoin rises and falls? The simple answer I can give to this question is it mainly depends on supply and demand in the sense that when a lot of investors and traders opt in for btc, the price will sky rocket and vise versa.
Currently according to the coin market cap Bitcoin is at $54,637.32 with a market dominance of 44.53% and a rank of #1 among other currencies.
IMPORTANCE OF BITCOIN
1 - You can easily transfer your Bitcoin to any person of your choice since the is no central authority controlling your assets like the banks. An example is in my country certain banks don’t open on sundays this denies the users to send money on that require day but with Bitcoin you can send it any time any where.
2 - Some people uses Bitcoin as a form of investment because when the price of Bitcoin comes down investors buy the asset so that incase it rises profit will be be made.
3 - Moderate transaction fees, this is all because it eliminates all third parties in so doing all small small charges that are paid to the middle man in banks are eliminated.
AIM BEHIND BITCOIN INVENTION
The Bitcoin has many aims I will be stating and explaining some of the aims that lead to its establishment.
1 - The first aim is for it to be used a legal tender for the exchange of goods and services meaning it was created to be able to used to pay for any item an example is let’s say I want to look buy a car instead of counting a lot of fiat money, I can just use my btc to pay which would be more convenient.
2 - The second aim is to eliminate all third parties (central authority) the banks and other fiat currencies use. This means uses can have full control to your asset which can be accessed at any time. Unlike the fiat money which are controlled my the central authority, you might want to send money to someone at a time which may not tally with the time the banks work.
3 - Satoshi Nakamoto observed that in transacting using the fiat money in banks it came with a lot of charges so inventing Bitcoin which will eliminate middle men will also help cut the transaction fees payed to the third parties.
IS CRYPTOCURRENCY GOOD FOR BUSINESS TO ACCEPT AS PAYMENT?
Yes!, definitely why would I say cryptocurrencies are good for business? I will present you with some convincing points and am sure I will clear your doubt by the time you have finished reading this part.
1 - The fees charged in transactions with cryptocurrencies are very low as compared to the fiat money let me clear your mind with an example let’s say I am making a purchase of a school bag for 30 people I can decide to pay using my cryptocurrency with the multi send feature to buy these bags and the cost will be treated as if am buying only 1 bag but for the fiat money you would have to pay the fee one after the other.
2 - Stress free, you can easily transfer your Bitcoin to the buyer or the seller without having to go to the bank and join a very long queue. With the advancement of technology you are giving a QR code with the Bitcoin address to scan which makes it super fast and reliable.
3 - The assets are protected from hacks as the cryptocurrency uses cryptography which is impossible to hack so when you make payment for any goods it is always protected.
4 - Transactions made with cryptocurrencies only move in one way meaning when you send the currency you cannot reverse it this is good because most people send money and then reverse it back again after they have received the goods. Only the receiver of the Bitcoin can refund it back to you.
Conclusion
I wan to thank the professor for this wonderful lecture I have learnt a lot. Cryptocurrencies I believe in the next few years will take over the world after the establishment of Bitcoin a lot of other cryptocurrencies have also been introduced. This shows that Bitcoin is really doing well an can be used to make payments of goods and services.
The elimination of third parties in Bitcoin makes it have moderate transaction fees as compared to fiat money and again you can decide to send your btc any day any time.
