Because of its volatility bitcoins are seen as unstable currencies, however, bitcoins were designed and introduced for “systematic stability” not for its price factors. This is why bitcoins are considered to be the exact opposite of fiat currencies which are much more stable when it comes to the price factor but are prone to financial and systematic fluctuations. This is where new cryptocurrencies are being developed like facebook’s libra. This new cryptocurrency was designed to give price stability just like all fiat currencies.
Bitcoins are even seen as lucrative investment opportunities as well, as there are no government taxes applicable to these cryptocurrencies, many of the investors do want to get more profits from there bitcoin investments. Over time several other bitcoin variations have emerged in the market which are faster and more suited for business exchanges. You get Ripple, DASH, Libra, and much more. These cryptocurrencies give you a much faster rate of transfer and are more customizable. As bitcoin’s transactions are stored on a public ledger, it is nearly impossible to change the data or delete it without mutual consensus. This is where these altcoins can be used. They grant their users complete access to the data stored on the server and also give you additional features like partial transparency of the records. This is why this tech is much suited for private businesses.
There are several online investment and trading options that you can use as an investor to get into the world of cryptocurrencies. One such online tool is Bitcoin Era that allows you to perform automatic online trading of bitcoins. You get robots that are designed to carry out complex computations and market analysis so that you can invest your money in the bitcoin market and reap profits without any significant participation in the process.
As we see drastic changes in the financial market we see how the demand for fiat currencies depends on several global factors as well. This is where the banking sector interferes and makes fiat currencies much more stable but also disrupting the natural financial market. This is where bitcoins and other cryptocurrencies are quite helpful.
Bitcoins are designed for system stability and are designed in such a way that their technology focuses more on that only. This stability is seen as a result of blockchain tech that bitcoins utilize.
So What Makes Bitcoins More Secure And Stable?
This is where the term Hash power comes into play. It is defined as the computational power required to perform and confirm any transaction that is done through the bitcoin network. As we see higher hash power in a network, it gets really difficult for hackers to crack the security of the bitcoin system. In order to so, they need much higher hash power which would make the task of hacking much more difficult.
Bitcoin’s hash power is what makes is invincible and more stable as opposed to fiat currencies. This is what made bitcoin survive all this time through all the adversities and criticisms.
Also, as we see a rise in more computers connecting with the bitcoin network, we get more security, but the supply of bitcoins is limited under all circumstances.
This is how we see as the bitcoin network rises globally, it gets more secure and more stable. This is what makes bitcoin prone to risk as well, as the hash power of this network decrease the system gets much more prone to security risks and online thefts.
Moreover, we see how there is an intrinsic value in bitcoins which is why they are often seen as online gold. As some critics think that bitcoin will fail the economic market eventually as unlike gold they do not possess any secondary use. This is quite wrong as we see how bitcoin can not only work as digital currency as well as a medium to carry out online transactions and secure exchanges. With bitcoin, you can easily and instantly exchange or transfer money online without the help of any of the intermediaries like a bank or an online exchange platform.
As this whole system is working on bitcoin, you can see how important bitcoins are and what value they possess.
Price Stability Offered By Fiat Currencies
With the help of central banks, you get much more stability in price with fiat currencies. In case, there are any price fluctuations with the prices of fiat currencies you see these banks getting into the market to provide more stability. This is how they prevent short term fluctuation in the financial market as well.
Bitcoins are quite popular and widely accepted in countries like Zimbabwe where the traditional money systems have failed to work. This is where bitcoins are seen as a more reliable and stable form of currency. With an increase in bitcoins credibility and liquidity we will witness fewer fluctuations in its price making it more reliable and user-friendly.
As we see a change in the market of these digital currencies it is really difficult to predict what the future of bitcoins will be. As the market suggests the value of fiat currencies will depreciate due to the rise in inflation, bitcoins’ value may decrease with the failure in its network. Although, there are several ways like, increased security, consumer awareness, and price stability with which the bitcoin community can make sure that the bitcoins stay in the market.