Blockchain on Bitcoin: Behind The Phenomenal Rise of Bitcoin
January 10, 2018
In 2009, a Norwegian man named Kristoffer Koch bought 5,000 bitcoins for $26.60 ($0.0053 per bitcoin), and promptly forgot about them. In 2013, media coverage on bitcoin jogged his memory. The value per bitcoin has rises to $266 at the time. He sold one fifth of his bitcoins and generate enough money to buy an apartment, as told by The Guardian. In other words, he bought his apartment from a $5 investment.
From the time it was first launched until now, bitcoin keeps rising and rising. The value has surpassed $18,000, and some experts predicts it will eventually reach $20,000 by the end of the year. How this happened? Here are some rationale to the phenomena.
Blockchain technology makes every transactions using bitcoins as peer to peer. There will be no bank, government, or other third party involved, like the traditional way we commonly use these days. For those who are affected by how much money printed by the government after 2008 credit crunch, this decentralized method can be their way of ‘revenge’ and become the new ‘trustable’ currency solution.
Lower transaction cost
Due to its peer-to-peer nature, no other party will be able to charge anything in our transactions. All transfers and transaction are recorded automatically and securely, thanks to the blockchain technology. Threatened by this, even banks are now invested a lot of money to develop their own blockchain technology.
Bitcoin has dual-sided cryptography for each transaction. When transfers and transactions are recorded in blockchain, we need a key to open them. This is a lot safer compared to traditional method. In addition, bitcoin has finite amount, so it can’t be printed, like traditional currency. So there will be no ‘fake bitcoin’.
Purchases are not taxed
We cannot identify any bitcoin transaction without its key, thus, it is impossible for third parties to track or intercept any transaction in bitcoin. Since third party cannot track them, bitcoin purchases are not taxed by government. This is a tremendous benefit for investor compared to other taxable investment properties.
The first mover advantage
The success of bitcoin induces a number of new cryptocurrencies and tokens launched every day. All these new currencies are strengthening bitcoin’s position on top of all cryptocurrencies, known as the first and the most valuable.
Last but not least, bitcoin has a finite supply. Once all of them are mined, there will be no more bitcoin. This created fear of missing out among bitcoin investors. If they don’t own bitcoin right now, there may be no more bitcoin later. The unique blockchain technology behind bitcoin surely is the key why bitcoin has all the charms and their popularity will rise further in the future.
If you want to know more on how blockchain could revolutionize all industry in 2018 you may sign up to CTI IT Infrastructure Summit 2018 and meet the expert there.