Bitcoin was founded in early 2009 by an anonymous individual or group of individuals using the pseudonym Satoshi Nakamoto. It was initially mostly used for online gambling and received little coverage. However, now we see the increased popularity of virtual currency and the financial sector is trying to implement it in many different services and the growing demand actually works at its advantage.
Advantages of Using Bitcoin
Bitcoin is a decentralized digital asset, which means that it is not governed by any national laws. As a consequence, bitcoin is not subject to federal oversight or controls. Money is exchanged using so-called digital wallets, which ensure that all senders and recipients remain anonymous. Only non-identifiable digital wallet IDs are presented, preserving the platform’s unobtrusive nature. In addition, despite its anonymity, all transaction documents are saved, making it very straightforward. Individuals, i.e. aspects of the financial exchange, are still untraceable, but archives make bitcoin more reliable. Apart from the aforementioned advantages, bitcoin transactions have a number of other advantages, such as being fast, easy, completely digital, more convenient, and so on.
Availability is another aspect that has contributed to bitcoin’s popularity. When the number of internet users grows, so does the popularity of digital payment services and virtual currencies. Bitcoins can be bought or sold to other sovereign currencies on the internet in a matter of seconds. As a result, Bitcoin FX brokers, such as Hotforex Forex broker can now be seen in a variety of countries, improving the crypto industry’s operation. Many young, particularly technical businesses choose to use bitcoin over conventional currency because of the ease with which they can be exchanged, purchased, or sold.
Bitcoin isn’t the only cryptocurrency that has gained popularity throughout recent years. Every year, more and more digital payment mechanisms emerge on the global web. When Bitcoin, which is now regarded as the most popular cryptocurrency on the planet, rose to prominence, many expected it to cause a significant change in the way the finance sector works. Then, in 2017, bitcoin’s price plummeted, raising new concerns about the currency’s value and reliability. The markets were rocked by events that year, owing to extensive media reports of the bitcoin market price change. However, whether it affected conventional equity markets in major financial capitals such as London, Tokyo, and New York remains to be seen.
Skepticism towards Bitcoin
Many economists and financial market experts agree that cryptocurrencies’ rising influence and current conditions are unsustainable. Many countries and their respective legislations continue to refuse to accept virtual currencies as a part of their financial realms, causing them to fall behind in meeting demand. They are either totally unrestricted and allowed to float free, or they are strictly supervised.
As a result, companies that lack their own visibility are gradually turning to cryptocurrencies like bitcoin and others. It allows them to conduct financial transactions without having to rely on conventional banking and money transfer services. This is what led to a series of booms along bitcoin’s journey to where it is now. Despite its advantages, it still faces several obstacles and lacks adoption in conventional economic sectors, reducing its relevance and presence on the global capital system.
Influence on Traditional Financial Market
As previously said, bitcoin and blockchain stock market hysteria sometimes make their way into the mass media. More notably, the 2017 financial crisis sparked a global outcry and had a marginal impact on related financial sectors. However, also after more than a decade since its inception, bitcoin is still considered a niche currency. Many people could be surprised by this, given that the article begins with a mention of the company’s significant market capitalization. However, its ceiling of nearly $1 trillion USD pales in contrast to the overall large money in the United States, which stands at more than $18 trillion.
With such numbers, bitcoin cannot compete with them in any way on conventional markets, limiting its position and overall influence. Gaining traction in more constrained markets, such as those in Europe and major economies around the world, is much more daunting as bitcoin fails to incorporate itself into its ecosystems.
Summing It Up
Finally, to sum up, without a doubt, the future will bring us more technical progress and creativity. As a result, digitalized financial institutions and cryptocurrencies have a good chance of succeeding and influencing existing economies. However, given the current state of affairs, sovereign currencies will continue to dominate conventional markets for some time. One of the main reasons for that might be mentioned to be the fact that there is no shared agreement or idea of what does bitcoin represents, is it a way for exchanging goods and services, a valuable asset, or investment for the future. As a lot of countries are trying to find the best purpose of its use, it is expected to gain momentum and use it to reach higher levels.