Earlier this year, Bitcoin appeared as an idea in the New York Times Sunday crossword puzzle. The five letter word was “e-coin”. This was a confirmation that this crypto currency had already joined the zeitgeist. Such virtual currencies make use of computer generated encryption to secure and monitor all the transactions, liberal of a central bank. If you remember last year, Bitcoin was the topic of discussion. It made headlines after rising from $960 per bitcoin in the beginning of 2017 to almost $20,000 by the end of that year. In this year, most of the news has been about its descent to a decrease of up to $7,000 in February. It was recently on rebound. Bitcoin has become such an interesting topic to research and talk about. People have had their different opinions and views. That’s right. Those are just opinions. Now, there are facts about bitcoin which you should know. They are all included in this article. So let’s learn!
Bitcoin is Not a Product!
Most people think that bitcoin is a commercial product. Others think that it is a company. There are even others who think that it is a private stock issue. Probably you have also been thinking bitcoin is one of the three mentions. So what really is bitcoin?
There have been previous attempts to create money. Most of the attempts to create money mostly for the internet have not depended on a distributed ledger. Therefore, these attempts were essential centralized by design. Majority of the attempts were managed by one company that we the people had to put our trust on, in order to use them. In return they too had to trust you. However, bitcoin had no trust. It was trustless! This is because; anybody was in a position to run the whole node of protocol. The difference came from here. As a result, the source of the technical stability of bitcoin originated. It is not a wonder that most people had the misguided clue of revolutionary structure of the blockchain. Could be this is the reason why most people keep questioning about its legality and legitimacy and this question, “is bitcoin legal?” has left may pondering and scratching their heads. Though, it is almost a wonder that nobody has composed a song about it yet! Haha!
It is essential to know about the distributed model and first to have clear information of what cryptocurrency is. Bitcoin is not a product. It is not a company. It is not a brand either. Rather it is a technology! Bitcoin is a technology by its design and structure. It does not even have an owner. Let’s make it sound even better. It is owned by nobody and everybody. Hence, it is a distributed ledger. The sole purpose of bitcoin is to particularize on the ownership claims that instead, offer a progressive and impunity aftermath of changes in the rights of ownership.
Bitcoin is a token that gives proof of authority and access for changes to be made in the ledger. Therefore, it absorbs and portrays the value of services that the ledger offers. This realization took a while, actually years! Many people are yet to realize this. They still have the mentality that bitcoin is the same as stock or a proprietary asset, which is wrong!
Bitcoin is Not a Company!
When understanding fails, then confusion sprouts up. Bitcoin is not the same as Microsoft. Let’s be clear on this. It is more like computing or running water. Therefore, it is not like Kohler or Exxon or Honda. Bitcoin is like the internal combustion. It is a technology that is available. That is the reason why, the ecosystem mode of payment for tokens, is way much bigger than bitcoin. Today it accounts for only 37% market dominance in the whole space.
This blockchain technology is able to do more than what money for the internet can do. There have been attempts to form taxonomic systems to classify the many types of innovation that have grown. These attempts are happening and we are seeing them. For example, the one provided by Brave New Coin, which is a thoroughly thought one to be honest.
Anthony Pompliano argues that among payment tokens, utility tokens and security tokens, bitcoin is like the payment tokens. The same case applies to litecoin, monero and the rest. The utility token on the other hand, gives its own service such as recording contracts and registering property titles.
The most spellbinding amongst the three categories is, the security tokens. They help the enterprises to raise funds for certain ventures. Therefore, they directly compete with the ancient lenders and the venture capitalists. The security tokens allow an entrepreneur to go out there and sell the rights of ownership to the future overall performance, of the commercial enterprise.
These security tokens provide more benefits compared to the old means of raising funds. Pompliano claims that, it’s all about the lower rates, the free exposure of the market, a bigger investor base and the reduction in the risks of manipulation by the official institutions. Try and imagine, if a business could raise funds from anybody in the world. This would predict a great future for a anybody who was willing to offer resources. This would be such an upgrade from the old securities, don’t you think?
In cessation, it is unfortunate that, there is a big disagreement between the crypto assets and the old regulators because of the threat that the security tokens poses. It is even easy to assume that the conflict revolving this part of innovation is likely to grow wider and heat up the more compared to that that holds the future of money. It could even create more controversies than the occurrence of capitalism which left the whole world in a state of shock in the 18th century by instigating huge disturbance in the statistics of wealth and the distribution of power in the society. The concept of capitalism put a common person in control of consumption and as a result production came by. The security tokens are likely to take this model to another level by placing everybody in control of the investment part of the commercial society. Therefore, you better be ready because this will be a series you might not want to miss it unfolding.