Well, yes -Bitcoin is an amazing idea, and here is why:
- It is a currency aims to avoid the monopoly of governments and corporations. Bitcoin was looking for decentralization – a system in which users get control over a network and there is no entity of any kind ruling over this currency system. Isn’t that a great idea?
Currently, there is a handful of central banks that are printing fiat currencies worldwide. These banks often manipulate the markets through their interest rate changes, quantitative easing programs/ tightening measures, promotion of credits and debt, etc. Even the governments cannot control their own money, as the central banks are often managed and controlled by private faces. Bitcoin was meant to fight central banks, and this is a brilliant idea.
- It uses the distributed ledger technology or blockchain, which is a revolutionary system that ensures security, transparency and speed of transactions and exchange of data. Blockchain is a database that is shared among multiple servers/users in many different places. Every update in the system is reflected automatically in all the database replications. If some hackers would intend to attack the database, they would manage to hack up to several servers, which wouldn’t damage the integrity of the database as the rest of the replications would still confirm the real situation. Thus, it’s almost impossible for Bitcoin to get hacked. I say almost because there are some nuances, mostly related to quantum computers and miners’ monopoly.
- It was meant to be a currency that is not prone to inflation. Today, the USD has lost about 96% of its purchasing power since 1913, when the Fed was created.
This is because the Fed always prints money and throws it into the market. Bitcoin cannot be inflated as it uses a special algorithm and its supply is capped at 21 million coins. Currently, there are over 16.5 million coins.
- You don’t have to share your personal information and go through tons of procedures to make Bitcoin transactions unless you plan to do it via crypto exchanges, but they have no direct connection with Bitcoin’s blockchain.
So, Bitcoin is a great idea in general, but in practice, things are a bit different. Even if Bitcoin is said to be decentralized, it’s actually controlled by a few miners, as the top 5 mining pools have about 70% of the hash power. Also, the distribution of Bitcoin shows that there are only a few rich people holding most of it.
Bitcoin has exploded in price because investors used it to generate profits rather than buying it for its functionalities. It became an instrument for many speculators, which damages its reputation as a currency of fairness and freedom.
The idea might be great, but the human factor generally destroys every good idea. Em2 might be a good idea/discovery, but what about the atomic bomb?