Bitcoin began the monetary revolution we are witnessing on Halloween 2008, a month and a half after Lehman Brothers’ catastrophic collapse. Bitcoin demonstrated that new monetary arrangements are conceivable because of technological advancements: money does not have to be controlled by a government or restricted to a sovereign region.

Bitcoin is here to stay, thirteen years later, after constantly repeating all-time highs despite bans and curses. Perhaps not precisely as Satoshi Nakamoto envisioned a “peer-to-peer electronic currency system,” but certainly not as a useless speculative asset with no societal value. Instead, Bitcoin might become the world’s settlement currency.

It has always had the potential to be utilised as an international payment system. It includes an impregnable decentralised infrastructure, dubbed the Bitcoin blockchain, that can handle and record transactions taking place all over the world.

Bitcoin built a worldwide network that is constantly available for anybody with access to a smartphone or computer in less than a decade, with no central authority coordinating activities, guiding investments, or forming partnerships. To put things in perspective, it took Visa decades, multiple commercial agreements, and a significant investment of money and skill to build the incredible network that is now utilised by billions of people.

On the flipside, bitcoin, the network’s native currency, remains volatile. Bitcoin may appeal to investors seeking higher profits, but it may cause concern for consumers hoping to pay their rent or purchase food. As a result of its volatility, Bitcoin’s attractiveness and, as a result, its application as a widely accepted means of exchange that can enable ordinary transactions is limited.

On the other hand, the same characteristics that make bitcoin volatile — its lack of backing and a management issuer — also allow it to do what no other money, public or private, can today: frictionless cross-border and cross-jurisdictional transferability. While a bank client works out how to conduct a foreign currency transaction, a bitcoin can cross the world through several digital wallets.

So, how can these opposing traits be reconciled so that bitcoin can operate as a truly global currency? First, by encouraging rather than vilifying speculators. People and institutions looking to make a fast buck by buying and selling bitcoin not only add liquidity to the market but also help to shape bitcoin prices and (again, counterintuitively) lessen dramatic price fluctuations. The greater the number of individuals trading bitcoin, the more predictable it gets.

More than that, the Bitcoin network is transactional in nature, serving as a “peer-to-peer electronic currency system” rather than simply a secure storage facility for goods. In this viewpoint, bitcoin may be viewed as a worldwide monetary vehicle that allows anybody, everywhere to send and receive money, rather than as digital gold bars safely hidden from view.

The second stage in increasing bitcoin’s usage as a worldwide currency is to have as many reliable exchanges as possible ready to purchase and sell bitcoin in various countries. Unhosted wallets are unquestionably helpful for people seeking monetary privacy but who are also capable of creating and maintaining their own digital wallets and private keys.

What matters most for non-tech aware people who want to conduct secure, rapid, and inexpensive overseas transfers and remittances is to select a dependable custodian who can assist them simply satisfy their needs. That’s what trustworthy exchanges can accomplish, especially those with a global presence and the ability to accept local money in one country, move bitcoin across borders, and deliver local cash in another.

Bitcoin might become a formidable choice not just for foreign senders and receivers, but also for regulators, under these circumstances. Senders and recipients don’t have to worry about volatility since bitcoin can easily transfer from one digital wallet to another, no matter where they are. They may purchase in and out of bitcoin as soon as the international transaction is done in a liquid market with exchanges available 24 hours a day, not days as in the present correspondent banking system.

ALSO READ: Binance Reveals its Most Recent Innovation: BNB Auto-Burn

The volatility would be reserved for investors and speculators in the origin and destination nations who are ready to take on more risk in exchange for better profits. As a result, speculation might subsidise foreign payments. And the exchanges in each of these nations would handle transferring bitcoin and provide each counterparty with their desired exposure, whether it was sovereign money (senders and receivers) or bitcoin (investors and speculators).

Regulators, on the other hand, would be able to track local and international money movements in real-time, regardless of jurisdiction, because all transactions are recorded on the Bitcoin blockchain. Cross-border payments using bitcoin can offer a neutral, robust, and compliant alternative with lower transaction costs thanks to the intermediation of exchanges, which would be responsible for identifying buyers and sellers. There is no other alternative, governmental or private, that compares.


Leave a Reply

Your email address will not be published.