Fundamentals of the Bitcoin Economy

2017-02-20 00:00:00

Forecasts regarding future technological development, the integration of new resources, as well as the advancement of maxims, taking into account the desires and interests of both individual states and individuals, may fundamentally differ from the assumptions made by a specific person. The theses put forward concerning the forthcoming reforms in the sphere of the world economy should not be taken for granted, since the experience and title of an ordinary "diviner" can be questioned. Is it possible to declare with complete certainty about the indispensable fulfillment of predictable precedents?

When people talk about upcoming events, they tend to analyze each argument and carefully assess the possibility of a potential scenario in the development of the economy. Self-nominated candidates propagandize the inevitability of the implementation of the only possible scenario in which they unconditionally believe. It cannot be denied that a genuine confidence in their own righteousness inspires the trust of several thousand people who are aflame with an idea. This factor has a powerful impact on the scale of the development of the situation.

The topic, which is now being vigorously discussed by the broad masses, is related to the future of the Bitcoin economy. Supporters of digital cash put forward hypotheses regarding the promotion of cryptocurrencies and the use of innovative technology in the banking sector and government organizations. Lets try to separate the real arguments about Bitcoin, which constitute a classic set of axioms and can be used to further study the symptoms of cryptocurrencies, from common misconceptions.

The publications in the media amaze the imagination with the infinity of inconsistencies between the participants and the real opinions of experts. It is not surprising that a user seeking to thoroughly understand an urgent problem may get lost among a large number of existing points of view, where facts from one informational material are interpreted by different people in exactly the opposite way. However, the essence of heated controversy lies in finding real truth against the background of current events and forming ones own maxims.

The initial position of the opponents is the same; they all start from the idea of developing a cryptocurrency protocol that underlies the creation of peer-to-peer currencies. The similarity of opinions, among the overwhelming majority of supporters of ideology, lies in the desire for a multifaceted study of aspects of new technology.

In the course of the study, adherents and opponents of a unique phenomenon assimilate facts that cannot be refuted, after which they begin to assess the possibility of developing one or another further scenario. At the same time, the emergence of favorable arguments, such as the idea of an early replacement of fiduciary monetary units with digital counterparts, causes a counterbalance in the opinion of skeptics who consider cryptocurrency to be an ordinary “soap bubble”, “candy wrapper” or “pyramid”.

Protocol theorem

Despite the reluctance of some world leaders to acknowledge the power of Bitcoin, its protocol continues to operate smoothly. Naturally, it has some rough edges, which cybercriminals are trying to catch on to, inflicting one attack after another. However, no one can stop its movement. The most interesting thing is that the result of such attacks carried out by hackers is the modernization of the Bitcoin protocol and the subsequent work on eliminating some of the shortcomings. Thus, a more perfect development path is set for cryptocurrency.

Cost theorem

The value of Bitcoin lies not only in the material, but also in the ideological component. The cost of scientific development lies in the well-thought-out work of the mining algorithm, the implementation of bilateral transactions, the accounting and storage of all executed payments, as well as the exclusion of double spending.

The material value of digital currency increases every year, depriving fiduciary monetary units of the right to be called inflation-resistant title units. Acceptance of Bitcoin, increasing the number of adherents, expanding the network and improving infrastructure are factors that have a beneficial effect on increasing its exchange value.

Competitiveness theorem

The traditional economy has already felt the onslaught of Bitcoins growing power every year. Already today it is a worthy competitor to all national banknotes existing on the planet. The government bodies of some developed and developing countries do not want to admit this fact, therefore they are fixing all kinds of obstacles to cryptocurrency. However, many European regulators are more liberal about the phenomenon. Shifts in the direction of increase were outlined in Russia as well.

Timeliness theorem

An inevitable consequence of the development of the Internet, which previously performed exclusively functions in the field of sending information flow, has become the emergence of a new role, where it appears as a full-fledged economic space that allows you to conclude financial transactions, perform certain work, sell goods and services, as well as property and intellectual rights. ...

Currently, fiat money is holding the lead in the implementation of financial processes, which are struggling to satisfy the needs of their owners. However, it is obvious that traditional banknotes can no longer cope with their tasks against the background of the growing economy in the virtual world, therefore only digital means can completely replace them.

Bitcoin is the next generation of money that will enable the Internet economy to enter a phase of intense growth. This is the promising and bright future of cryptocurrency.

Globality theorem

Digital currency can be used with equal success by representatives of different nationalities inhabiting the earth. It is noteworthy that sending Bitcoins can be carried out at any distance, in a short time and with minimal losses on commission fees. Created in mathematical language, it is able to meet the needs of the inhabitants of the "golden billion" and "third world" countries.

Attractiveness theorem

Digital currency is equally attractive to all segments of the population. The presence of the privacy function allows citizens who do not trust the government to store and increase their capital in an incognito mode. In any case, even the most influential person in the world cannot take money away or "freeze" an account. Internet merchants and freelancers see Bitcoin as a means to increase earnings and reduce costs, as well as release from banking claims for a share of the money received by workers in the knowledge segment.

Bitcoin "erases borders" because it allows you to transfer money anywhere in the world in unlimited quantities, at the same time as cheaply as possible, quickly and without the participation of intermediaries.

And in conclusion, I would like to note that some of the properties described are basic, and some of them are in addition to them. However, questions regarding the adaptation of cryptocurrencies to new conditions of existence, which are dictated by the information space and the network economy, remain open today.