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Much has been said about the surge that Bitcoin has had in the past few months, an increase which has prompted financial experts to ask for both caution and carelesness when investing on it. In lieu of such a contrasting panorama, thousands of investors are still questioning if it is project–if it can be called that– worth investing in. Millions of established names have already put forward millionaire contributions that have strengthened the electronic currency’s value in the market without a thorough knowledge of how exactly it works.
The main problem behind the investments being put forward is the blind generosity they seem to be done with– a general disregard for a complete study of what Bitcoin does in the market or if it is even legal has sparked worries about how long this trend will last or the repercusions it may have on current global business needs.
What worries many is its dubious background. Created in 2008 by a mysterious Japanese businessman called Satoshi Nakamoto, Bitcoin was initially part of a paper published by him in which he detailed the creation a new blockchain via a secretive mailing list. His identity, like that of the currency he created, is completely unknown.
The biggest question in everyone’s mind–or at least for those who are not well acquainted with the financial world– is what exactly do they mean when they talk about a blockchain? First, we have to separate it from the concept behind Bitcoin. They might be paired up, but a blockchain is actually the infrastructure that cryptocurrencies (we’ll get to that in a second) like Bitcoin are used on. It is the backbone on which all digital transactions are made, via Bitcoin or others.
Bitcoin is a cryptocurrency. As its name indicates, it is a monetary system that utilizes codes–digital codes– to make transactions happen. The value of Bitcoin stems from its wiring, which many experts have said is so difficult to hack, it makes it one of the safest ways to maintain commerce online. It is programmed to be an efficient and scarce currency, capable of keeping its face value on a long term, which many say is catering to all the current business needs that the digital realm presents for companies worldwide.
Why is there so much skepticism? Considering how its silent nature has provided grounds for many to use it for illegal purposes, Bitcoin’s popularity has suffered greatly. A big part of its infamy comes from suspicious transactions that are ultimately hurting the blockchain systems on a global level. With this in mind, many wonder if it is viable or even secure to invest on such a volatile endeavor.
According to a survey by Price Waterhouse Cooper’s, at least 77% of businesses will adopt blockchains –Bitcoin included– as part of their global financial services by 2020. This marks not only a trend, but a considerable change on the global financial landscape. A change similar to the introduction of credit cards as «charge-plates» back in 1928.