Effects of Bitcoin revolution on economic development

Since 2009, many people have considered Bitcoin and other digital currencies a niche investment. Despite the crazy Bitcoin’s Bull Run in 2017, many people tried to purchase this virtual currency, and some big players didn’t take it seriously. That’s because many institutions thought virtual currencies were speculative assets lacking substantial value.

Nevertheless, this line of thought has changed drastically, especially during the COVID-19 pandemic. This pandemic occasioned an economic crisis that revealed the fragility of the current financial system. Consequently, both institutional and retail investors opted to purchase Bitcoin because it proved good storage value and a hedge against hyperinflation.

It’s no secret that more individuals and organizations are now purchasing this virtual currency on platforms like https://british-bitcoinprofit.org/. Using these platforms, institutional and retail investors can buy and sell Bitcoin for profits. Ideally, this website allows people to register and then use fiat money to buy Bitcoins. What’s more, people can sell their Bitcoins to get fiat money.

In the past, only die-hard fans were supporting its technology. However, many people now see Bitcoin as a financial tool. And this revolution is affecting economic development and the global financial system in several ways.

Bitcoin and Blockchain

Satoshi Nakamoto, a mysterious entity, created Bitcoin in 2009. Bitcoin’s goal was to be a digital peer-to-peer payment system or network that anybody could access without involving intermediaries.

Bitcoin became the first global digital currency that does not involve any government or central bank. This virtual currency depends on a mathematical process known as mining. This process involves millions of decentralized but networked computers that provide the power for minting new coins.

Blockchain, a distributed ledger system, facilitates this decentralization. Essentially, Bitcoin doesn’t exist in a physical form or shape. Instead, this virtual currency is transaction data on a public ledger. And this makes Bitcoin almost impossible to falsify or duplicate.

The technology behind this virtual currency organizes transactions in chained blocks through cryptography. And this is the reason why this technology is called the blockchain.

Bitcoin Characteristics and Benefits

Blockchain has a decentralized nature that has numerous benefits. Essentially, the inherent properties of this virtual currency have disrupted financial systems in most countries. Here are some of the properties and advantages of Bitcoin.

Capped Supply

Unlike the U.S dollar or the Euro, Bitcoin has a limit for the number of tokens the world can have in circulation. Essentially, Bitcoin supply can’t exceed 21 million coins. Currently, miners have already generated 18.6 million Bitcoins.

Bitcoin scarcity explains why the value of this digital currency continues to increase. On the other hand, governments can print fiat money whenever they consider the move fit. For instance, many governments printed more money and injected it into the financial system in response to the COVID-19 crisis. Consequently, the move diluted the fiat money in people’s savings accounts.

Bitcoin has a deflationary design that prevents such acts. The halving mechanism for rewarding miners ensures that only a few coins can circulate globally over time. And this scarcity causes an exponential increase in Bitcoin price.

Financial Inclusion

Blockchain has a decentralized nature that makes it a permission-less network. Essentially, anybody can participate in this network provided they can access the internet. Consequently, even people with no access to the banking system and those prone to inflation can join in the activities of this internet economy.

Additionally, a decentralized system creates an advanced financial product for everybody across the world. Even third-world countries can now access staking, lending, and interest accounts using blockchain technology.

Fast and Cheap Remittance

Transferring money internationally through the traditional financial system is a prolonged process. That’s because the process involves several intermediaries and can, therefore, take days to complete.

Blockchain technology can solve this problem because it allows for cost-effective and fast international remittances. This peer-to-peer technology enables individuals to complete transactions without involving third parties that increase time and cost.

In a nutshell, Bitcoin has changed how people in the developing world see money. It’s also created a financial system that facilitates faster and low-cost transactions. Thus, its success in developing nations is undeniable, and its revolution will impact economic development further.