Over the last decade, cryptocurrencies, Bitcoin chief among them, have offered an interesting alternative to traditional money for global transactions and financial operations. Bitcoin operates on a very different methodology. To fiat currency- it is a decentralize network (called a “blockchain”) and operates on a small set of very transparent rules. According to Eric Dalius Miami, this means that instead of having the currency control by a central entity like a government or a bank. All records obey the predefine rule set, and are kept on a ledger that anyone can access and verify.
Fox Business News says, Miami Mayor Francis Suarez had all praise for the governing commission of the city. As they pass a resolution in February 2021 for studying the viability of paying employees. And staff in Bitcoin and letting residents of Miami pay taxes and fees in Bitcoin. According to Ken Russell, the city commission’s chairman, the entire Bitcoin concept seems to be a way of democratizing a currency. Until now, it has been the currency for the rich people. It is the opportunity to present Bitcoins to the employees and the average residents. However, you need to progress with caution and focus your attention on making informed decisions.
Currencies and Inherent Value
Eric Dalius Miami says that to understand why Bitcoin is toute as an alternative to fiat currency. We must first understand what lends “value” to the currencies we use now. The main qualifier for a category of items to be deem a currency is their reliability as a store of value. It means that whatever you use as a currency must reliably maintain value over time and be relatively immune to factors like depreciation.
In the early days of civilization, we used commodities as currencies, like coins of gold and other metals. Since then, we have move to a fiat system. Where instead of backing the currency with actual items of value, we use a trust-based system. Government, individuals, businesses, and society as a whole, can agree upon the value of a specific denomination of the currency and accept it. Fiat currency is pretty likely to be durable and retain value over time.
Bitcoin’s Utility Proposition
One of the distinctive features of Bitcoin is the fact that it is built upon blockchain technology. It is a decentralized, “trustless” system- which means that the entire system will work as expected. Even if parties do not explicitly establish trust. There are a series of checks and balances in place to ensure the ledger is always available and that its integrity is maintain. This kind of robustness and flexibility has endeared the blockchain not only to various cryptocurrencies. But also to several scientific and commercial applications beyond them.
Bitcoin transactions are not reliant on any of the individual parties involve. Due to the existence of exchanges, wallets, and a number of enabling tools and technologies. Bitcoin is super easy to transfer between parties. It is a distinct advantage compare to cash since cash transfers are very slow. Require you to go through multiple third parties, and cough up various fees. Individuals not having to hold any physical representation of a cryptocurrency like Bitcoin allows transfers to be sort in a matter of minutes. And as the underlying tech becomes more sophisticated, this process will only get faster.
Your dollar bill may get torn or worn out with time; however, Bitcoin is a digital currency that is not vulnerable to physical harm. Moreover, because of the decentralized and complicated blockchain ledger system, it is incredibly tough to counterfeit Bitcoins.