In the past two years, Bitcoin has become the most popular cryptocurrency. What is so special about Bitcoin that people is investing in this currency so much? The answer is the useful features of the Bitcoin. The properties of Bitcoin has set it apart in the financial market. Continuing the discussion, here is a blog post that discusses the five major properties of Bitcoin. Take a look.
1. Bearer eCash
Bearer eCash is one of the most differentiating features of Bitcoin. It works similar to the physical cash.
Blockstream President Adam Back explained that “It’s irreversible. You make a payment; it’s done. You can’t take it back. Later, he explained the other important aspects of Bitcoins by mentioning “There’s no third party, no central point of trust and no bank involved in the system. It’s unseizable because it’s bearer”.
This features make Bitcoin as an easy-to-use currency and increased its value in the market.
Bitcoin’s permissionless nature made it popular among developers as well as users. For instance, if someone wants to build an application above Bitcoin, for that you do not need permission from anyone. You just have to ask the various marketplaces operators’ that are operating on the web.
Blockstream President Adam Back explained how this permissionless innovation always been an important feature of the internet. Back explained “The Internet opened up permissionless innovation, and the permissionless nature of it is significantly credited with driving the fast pace of innovation. Many people think what Bitcoin will allow is that kind of rate of innovation in financial payment networks, where it’s so far been relatively closed and more like the closed telephone networks pre-Internet.”
The permissionless nature of Bitcoin makes it free from any authority and it can be used anywhere with or without an access to the internet.
Back said, “Network neutral meaning that there’s no kind of authority or central party at the base layer who can say, ‘Well, I don’t like that transaction”.
Continuing the discussion, Blockstream President Adam Back gave an example of network neutrality point as WikiLeaks donations. In the year 2011, private payment processors enacted financial blockade in place of WikiLeaks.
Post that, it must be observed that miner have the power of creating transaction selection policies on their own. When it comes to censoring transactions, the mining centralization is pointed as a major issue. So, personalization can reduce the attack ventor of Bitcoin and become the most effective property of Bitcoin.
This is the basic attribute of any fiat currency. The fungibility in currencies was established by Scottish Court Case in 1700. Hew Crawfurd, the man involved in the case sent two bank notes in mail, but before reaching the destination they went missing. The one bank note get showed at Royal Bank of Scotland and then Crawfurd put a case on the bank for taking his right.
On this case, Blockstream President Adam Back explained what will happen if a bank was insisted to return that note to Crawfurd. “If the ruling had been the other way [and Crawfurd] had gotten his notes returned to him, then nobody would want to accept banknotes without rushing to the bank and depositing them. That would cause a currency to basically fail at its primary purpose” Back said.
Privacy is one of the most sought-after features of Bitcoin. However, the reality is Bitcoin privacy need to improve on. According to Open Bitcoin Privacy Project, improvement in the privacy of Bitcoin is much needed in order to secure Bitcoin from threats. Privacy affects each property of Bitcoin.
There is a long list of improvements that are needed for the strongest privacy of Bitcoin. Zero cash or Confidential transactions should be implemented as side chains in Bitcoin. By doing so, the features can be tested in real time before implementing to the Blockchain of Bitcoin.
The improper security harms fungibility of Bitcoin and decreases the Bearer eCash usefulness. To survive, Bitcoin relies on the privacy owing to its use in black and grey market cases. WikiLeaks donations and Silk Road were two major cases.
5. Virtual Commodity
According to Blockstream President Adam Back, a virtual commodity is the attribute of Bitcoin which increases its importance as gold in the world. From here only, Bitcoin gets “digital gold” as a nickname.
Continuing the point, he explained, “There is no central party that can adjust the rate of new coin production.”
This feature of Bitcoin helps in avoiding numerous issues, including inflation related to fiat currencies and central banks. At 2016 MIT Bitcoin Expo, Cory Fields – Bitcoin Core Contributor said, “There hasn’t been a hard work to increase Bitcoin’s block size limit is a sign that the network may be doing a good job when it comes to remaining decentralized (and non-political).”
The above-mentioned features make Bitcoin powerful and useful. These attributes of Bitcoin motivates people to take part in this hyper-growth investment.
In the past, Xapo CEO, Wences Casares gave a presentation explaining the process of Bitcoin that how one day it will become money He said that first it will become a value store and then it will be used as a medium of exchange, and finally it will become an account unit.
After the presentation, Back observed that Bitcoin is already very useful as a medium of exchange and store of value to loads of people. However, its usefulness as account unit is getting affected by price volatility. But now, everybody can see that Bitcoin has become as money of internet and increasing its value day-by-day.
Therefore, it is beneficial to invest in this cryptocurrency. You can invest in it and earn profits on your investment. To know more, visit hashgains.com today!