WHAT IS BITCOIN AND WHAT WAS THE AIM BEHIND BITCOIN INVENTION? IS CRYPTOCURRENCY GOOD FOR A BUSINESS TO ACCEPT AS PAYMENT? WHY?

WHAT IS BITCOIN AND WHAT WAS THE AIM BEHIND BITCOIN INVENTION?

Bitcoin is a digital currency and its considered to be the first successful cryptocurrency that is used to make transactions either payment for services or purchases. Just as you can use physical currency to perform transactions in a central financial system, you can use bitcoin to perform same functions but digitally. Bitcoin is considered as an alternative for the payment of goods and services. Bitcoin was invented in 2009 by Satoshi Nakamoto. Bitcoin is used in a decentralized system, which means there is no central authority and it runs on a platform called blockchain technology. Initially when bitcoin was invented, few people believed in it, but now it has gained much popularity.

The aim of inventing bitcoin was to create an alternative payment that will work in decentralized system. Let's consider the financial system that uses the centralized system like the bank. The bank serves as the middle or third party, which means all transactions must pass through the bank. Now what do observe? You notice inefficiencies and delays in carrying out your transactions because for any transfer or transaction you want to perform, it must be authorized by the bank and sometimes, it takes days before you get this authorization and this is apart from the high commission the bank charges for the transactions and downtimes experienced due to technical difficulties that occur sometimes.

On the other hand, the decentralized system gets rid of these abnormalities. No one controls the process of operations. There is no downtime, there is no third party, transactions are done faster and easier, you have full control of your account and can perform your transactions anywhere and anytime with very less charges. It is an autonomous system. All these are the reasons or objectives behind bitcoin invention. And what more, the decentralized system is highly transparent and secured.

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

I can really say yes that cryptocurrency is good for a company to accept them as payment.

• In the global world, cryptocurrencies are getting wider acceptance as a form of payment for goods and services. Since many people are already using cryptocurrency because of its flexibility and system efficiency, for a company to continuously grow its customer base, the company must accept it to accommodate more informed and dynamic customers.

• Since many investors are interested in the trading of cryptocurrencies, a company can accept them because it is a good form of investment both in medium and long term. Since many commercial firms are already accepting it, a company can still use it to make purchases in the future.

• Another good reason is that it helps investors to trade carefully with its sale and purchase since cryptocurrencies fluctuate in price. A company can decide to convert one crypto into another making use of exchange platform. In doing that, the company will have a distributed investment.

• Accepting cryptocurrency as payment increases the efficiency and ease of transactions between the company and her customers. Customers can easily order their goods, make payments immediately since they have their mobile wallet in their cell phone. And the payments received and confirmed immediately by the company.

In my country, even though the banks are not allowed to trade in cryptocurrency, many individuals are gradually carrying out their transactions through peer to peer and that gradually gaining acceptance. And some companies are planning towards accepting crypto as payment options.

CONCLUSION

I can say that the invention of cryptocurrency as alternative source of payment is a welcome development, as many people can now perform their financial transactions at ease and faster from anywhere they are.

Also the invention has changed many lives positively as many people have become wealthy because of the good investments they did in the market. And many more are still learning how to trade on cryptocurrency.

I am grateful to Professor @stream4u