Bitcoin has achieved its present popularity from a total obscure stage. Presently bitcoin is at $6000 market cap which was $600 a few months back. Some people have the clear idea on how to harness all the potential aspects of bitcoin after extensively learning the underlying technology. It is one of the valuable cryptocurrency of the world.
These currencies are created and held electronically and some leading banks and companies see immense potential in them to change the financial market. bitcoin is already used as a currency for online trade. It is gaining its popularity as a currency in e-commerce but is still in the stage of infancy when banks acceptance question comes.
The major advantage of bitcoins is in terms of payment as no one can steal the payment as it is a transparent network. The user has one private and one public to lock and unlock the transaction.
During the economic crisis of 2008, some government was forced to print some extra currency notes to meet the national debts. This leads to the decrease in currency value. But in the case of bitcoin, the currency generation is restricted to 21million coins which means coins cannot be generated beyond this so there is no question of inflation for bitcoin. However, this may have a positive and negative effect as well.
Most of the transactions by the banks ask for fees. Especially if you are sending money beyond the borders it has to go through a number of formalities this in turn results in transaction fees. The peer to peer technology, on the other hand, makes this elaborate process cheaper and faster. Here the buyer and seller can deal directly with the decentralized technology discards intervention of any intermediates.
A few weeks back 40 of the world’s largest bank conducted a test on cloud-based technology to understand the blockchain technology and how the smart contracts can be used for banks. As bitcoin is decentralized and there are no chances of failure of the central point, that can disturb the trade. The decentralization also means the government cannot take it away which means no central authority has control over it.
Presently bitcoin is facing the problem of block size limitations; however, the scientist from Bitcoin foundation has confirmed that there will be a 40% rise in the size of the blocks in every two years until 2036. Before the organizations back up this technology the problem should get solved.