London, UK, Binary News Network, Bitcoin has been around since 2009, and it’s been slowly gaining traction as a viable currency. It’s completely digital, with no physical form, and it can be used to buy things online. It’s also gained momentum as of late, with some countries even issuing Bitcoin-based debit cards that are accepted widely.

Bitcoins are generated as a result of a process known as mining. They may be traded for other currencies, commodities, and services. FinancialCentre Broker Leo Garcia says that the tokens have become popular with merchants as a way to accept payments and as an investment because their price is not tied to the performance of any particular country or economy. Like other virtual currencies, bitcoin is vulnerable to theft by hackers. It is also irregularly traded, can be hard to set up for use by non-techies, and its anonymity has attracted people involved in illegal activities. It has also become a tool of hackers who have used it to disrupt several government websites.

Bitcoin is considered digital gold by some because its finite number of 21 million bitcoins makes it more scarce than regular currency. Like other virtual currencies, bitcoin is vulnerable to theft by hackers. It is also irregularly traded, can be hard to set up for use by non-techies, and its anonymity has attracted people involved in illegal activities. It has also become a tool of hackers who have used it to disrupt several government websites.

Exponential growth

Garcia says that the crypto fever has not spared any country in the world. In a way, virtual currencies have been a lifesaver for countries seeing a shortage in their fiat supply. For example, Venezuela has turned to cryptocurrency mining in order to make up for its cash shortage and prop up its economy. This trend is being followed by other countries going through troubled times at the hands of hyperinflation such as Zimbabwe.

While successful, the increasing number of miners is not without problems as well. It is said that the system can’t handle such a large number of transactions as it was meant for older systems like fiat currency and land-based banking. With its limited capacity, there have been issues with delays in transactions being processed by the system which has led to increased fees. The difficulty in mining bitcoins has also led to an increase in energy consumption by miners trying their luck at it.

Dollar and Bitcoin

The dollar has always been the number one currency all over the world. It represents a sound monetary system and has an equally strong value as compared to other currencies. Bitcoin, on the other hand, is not far behind in terms of its value. The difference between the two is that Bitcoin is a digital asset and not physical.

As the world shifts to a digital era, more and more people are turning to Bitcoin as an investment. Mr Garcia thinks that this is because it is not tied to the performance of any particular country or economy and its price is not affected by inflation in any way. The upside with Bitcoin is that the system has a limit of 21 million Bitcoins and this makes it better than regular currency and gold which can be mined infinitely.

As far as mining for Bitcoins is concerned, there are only 21 million coins available to mine. Hence, this might eventually lead to a situation where the demand for Bitcoin will exceed its availability, driving up its price in the long run.

Globally there have been many debates to figure out if Bitcoin will be able to replace the US dollar as the numero uno currency around the world. Mr Garcia says that while there is no doubt that Bitcoin has all it takes to become a successful medium of exchange, its volatility makes it an unsuitable asset for storing value. As of today, the short term value of Bitcoin depends on what people are willing to pay for it at any given time.

CEO Twitter is team bitcoin

Mr Jack Dorsey, CEO of Twitter, thinks that Bitcoin will replace the dollar. He said so while he was having an exchange of words with Cardi B, rapper. While this might be true, it is important to take into account that Bitcoin is still going through its teething stages and might not be as stable as the dollar just yet.

Mr Garcia says that there are pros and cons to both Bitcoin and the dollar which need to be considered before making any decisions or forming opinions. The US dollar is well established and has been around for a long time. It also enjoys the backing of the Federal government whereas Bitcoin doesn’t have any legal or regulatory authority to support it. While this cannot be held as an argument against cryptocurrencies, it is good to note how far these new currencies can go in their quest to replace fiat.

Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.