The concept of bitcoin, which is an alternative currency system, is taking the world by storm. Its major benefit is that it is totally free of inflation, unlike all existing money systems. The growth of the currency in the internet has been quite rapid and is expected to continue to grow.
Most of the people who have heard about bitcoin have no idea about its history or the circumstances that led to its rise to fame. In fact, a little background knowledge on bitcoin will help a person in understanding the concept behind it.
The internet, after the global economic meltdown of 2020 has been showing zero interest rates from banks. On the other hand, some of the popular financial institutions are experiencing major losses due to the collapse of several commodities and investments. Such losses include, but are not limited to, energy, stocks, bonds, real estate, commodities and other investments. As a result, banks are forced to pull out of many projects and return a huge portion of the capital invested in these projects.
A few years ago, a very rich business man had lost millions of dollars from investments. In order to recover his lost investment, he set up a website that was run solely for profit and not for profit and as a result, this website was developed.
The website’s purpose was to enable people who wanted to buy and sell bitcoins to do so from their home or office through an automated website that is totally free of charge. Instead of dealing with banks, the site uses its built-in software to process transactions of bitcoins and other virtual currencies without going through banks.
The internet was the site’s best selling point and it has generated a huge demand for the site. This demand has made the currency highly popular with people all over the world.
One of the main benefits of using bitcoins is the low rate of inflation. Since the value of bitcoin is based on the supply and demand of the currency, the rate of inflation of the currency remains steady and does not increase or decrease. Thus, inflation in a real sense is avoided, something that is seen in most fiat currency systems.
The creation of the currency is believed to cause numerous problems, but all these fears are unfounded. As mentioned earlier, all the banks in the world will go bankrupt at one point or another. In fact, if the money supply grows too large, a government can introduce a money monopoly, which would affect the exchange rate of bitcoins.