To many people around the world, Bitcoin and blockchain technology still make very little, if any sense at all. That may seem only natural, however, even these people will have to admit the concept is not just another hype, as initially thought. There are a handful of reasons why Bitcoin matters to the world, and over time, to every individual on this planet as well.
Clearing Up Some Misconceptions About Bitcoin
While the number of misconceptions regarding Bitcoin and blockchain technology is far too numerous to count, there are some obvious statements that need to be addressed. First and foremost, it seems strange to everyone how Bitcoin has created its value out of thin air, even though it is not the first type of currency to do so.
Gold, one of the most expensive precious metals to this day, started becoming valuable out of thin air as well. While gold may appear to be very shiny and malleable, those factors alone don’t make it valuable. In fact, one could argue that gold, similarly to Bitcoin, has no intrinsic value of its own, and they would be absolutely correct.
However, gold – nor Bitcoin – is created out of thin air, and the amount of effort used to increase the available supply in circulation needs to be rewarded. Both processes are called “mining” for a reason, as both gold and Bitcoin have a fixed supply, and it becomes increasingly harder to bring more “material” in circulation. Dwindling supplies lead to an increase in value.
Both Bitcoin and gold have another common denominator in that they are both excellent ways to store and preserve value. Throughout history, there were no other financial tools that remained valuable over an extended period of time, let alone increased in value. Plus, both gold and Bitcoin are extremely scarce, making them appealing to investors from day one.
However, unlike gold or any other type of currency, Bitcoin can be used in a global manner without users having to exchange funds along the way. Granted, Bitcoin is not accepted on a very broad scale yet, but the number of merchants is growing, both in the online and offline space. At this rate, it will only be a matter of time before Bitcoin becomes a global payment method.
A lot of people assume this lack of adoption is due to Bitcoin not being used by people outside of a very specific group. Nothing could be further from the truth, however, as the number of Bitcoin users grows every month. Furthermore, Bitcoin has been less volatile throughout 2015, which is another sign of the digital currency slowly maturing into a proper form of payment.
Blockchain Technology And Killer Apps
There are other factors determining the future success of Bitcoin and digital currency in general. Blockchain has been the buzzword for investors throughout all of 2015, and a lot of great things can be achieved by embracing this technology. In fact, it will only be a matter of time until Bitcoin’s “killer apps” come to fruition.
Not everyone sees Bitcoin as a way to circumvent a bogged-financial system, although that is still a large reason as to why the concept gained such popularity in the early stages. There are unlimited use cases for blockchain technology, even outside of the world of Bitcoin, and finding the proper use cases will take some time.
Until those killer apps are identified, Bitcoin continues to provide global financial services at little to no costs for businesses and consumers alike. Various Bitcoin startups are looking at ways to bring these new financial services to emerging markets and developing countries over the next few years. Exciting things are bound to happen; that much is certain.
What are your thoughts on why Bitcoin matters? How has the digital currency impacted your life? Let us know in the comments below!
Images courtesy of Shutterstock