Is it finally time for the general public to accept that Bitcoin is real? The currency has been on an absolute tear over the last year, rising approximately 605.5% in value from the last year. The current price of just one bitcoin is around $4300 and the upward trend appears to be continuing. The same can be said for other Cryptocurrencies like Ethereum and Litecoin. At the heart of it all is blockchain technology, which naturally restricts the available supply of these cryptocurrencies.
Why Crypto?
For starters, investors and individuals have been attracted to the idea of something like Bitcoin for its decentralized format.
Rather than relying on middlemen for payments, bitcoins can be used to purchase from trusted contacts directly. In addition, because there is no current regulation of cryptocurrencies, these are free from government influence.
In addition, because this crytocurrency is made by individuals and used by individuals, it could become a universal currency. Instead of paper, this digital form of money could be used for all payments throughout the world, without paying those pesky foreign transaction fees. This digital form of money is exactly what most people want in 2017, especially as less and less people carry cash with them.
In addition, those wishing to raise money can now do so through an ICO (initial coin offering), which is far less expensive than what banks charge for IPOs.
What Backs US Dollar?
A common criticism of Bitcoin is that there is nobody backing it, which isn't quite true. The system really operates on trust, and those who mine bitcoins are the ones that keep the system going to process payments. But still, there's no government behind the device.
In contrast, the U.S. government backs the Dollar, but what do they back it with?
After Bretton Woods, it was no longer gold, just paper. The Federal Reserve controls the monetary policy and makes sure inflation stays at a consistent level. And if we ever run into trouble? The government can just print more money. That can't happen with Bitcoin, which automatically restricts its supply. In one sense, the US government really does control your money, even if you work for it.
Of course, there is a security in the US dollar. But can we really trust a government that propped up a financial system that was far too greedy in 2008? Many are saying no, and turning to bitcoin as their preferred currency.
