Bitcoin was introduced as the first cryptocurrency in 2009 that aimed to provide an alternative to fiat currency users. Fiat currency is the government-recognized legal tender used in bitcoin leads. It had been the only currency type that was available to the people for a very long time. However, a need was felt to phase out the central regulatory body so that a transaction can occur purely between two parties without any external interventions.
So, it can be safely said that when Satoshi Nakamoto designed Bitcoin, he certainly saw it as a currency that had as many practical usages as fiat currency, if not more.
Use of Bitcoin as a currency
Bitcoin was introduced as a digital currency. It means that its primary use is being used as a medium of exchange in any financial transaction between two entities. Nakamoto dreamed of a world where a similar currency will function but it must be completely free from the shackles of the banks and the government. Also, since this currency exists in the virtual realm, each transaction will be cryptographically verified and stored on a blockchain, giving the entire transaction process the much-needed security and credibility. The two main features of the blockchain technology on which the functioning of Bitcoin is founded are that it is decentralized; meaning, no intervention of any third-party regulatory body and the other equally significant feature is that each transaction data is digitally stored on the blockchain and once it is verified and stored, it can be accessed by the users at any point but these information are typically stored in program languages and complicated codes which are impossible for normal people to understand. Hence, it is one of the reasons behind the high profile security of the bitcoin trade market.
In the initial days, however, Bitcoin was mostly used arbitrarily among the miners who received the coin as a reward for their efforts in finding the most accurate answer to the complex puzzle generated by the blockchain algorithm. The very first recorded use of Bitcoin as a medium of exchange was on May 22, 2010. A Florida, U.S, based Bitcoin miner Laszlo Hanyecz negotiated with a local pizzeria and bought two Papa John’s pizzas in exchange for 10,000 BTC which at that time roughly amounted to $25. This made the Bitcoin price to be a quarter of a cent. Since then, Bitcoin started being used as a currency but its scope of usage was rather limited because of the limited number of Bitcoin users.
However, with the upswing in Bitcoin’s fortune that started in 2017 when its price exceeded $1000 and climbed steadily all through the year to almost achieve the $20,000 mark by the yearend. It can be rightly said that this was the year when Bitcoin came into public consciousness and joined the global financial scenario. Since then, Bitcoin has started been taken seriously as a currency that has immense potential for becoming the global currency in the future. Today, the incorporation of Bitcoin by big and small businesses and recognition by governments and financial institutions proves that Bitcoin is here to stay as a currency.
Bitcoin as an investment asset
Bitcoin is also referred to as digital gold. It can be used as a commodity or an asset that is used for trading and investment purposes. In fact, in recent times with the acceptance of Bitcoin as a currency still in its nascent stage, it is used more as an investment asset. Its high liquidity makes it a popular short-term investment asset, while its high demand makes it an ideal asset for the long term. Bitcoin is effectively used to diversify your financial portfolio, as a risk management tool, and safeguards your assets against inflation or other factors that may otherwise negatively impact your fiat asset value.
Also, with the kind of frenzy seen in the crypto market, there is an influx of traders and investors making Bitcoin one of the most exciting and in-demand investment assets. Seeing this emerging trend, several crypto exchanges and trading apps have come up that enable an increasing number of people to start investing in the crypto arena. One such highly recommended trading app is the crypto superstar app
Conclusion
Though Bitcoin may not have a physical presence and is limited to the digital sphere, each day the increase in its scope of usage in the real world has proved that the dream with which it was created is finally coming to fruition.
