The first time you learned about bitcoin what did you think? Is bitcoin a pyramid scheme, or a new trick or maybe a pump-and-dump …? If you thought so, do not worry. Most people who first hear about bitcoin have this reaction. It's okay to be cautious and not to cast yourself blindly in the first project that promises you the moon in the sky.
We have discussed with many bitcoin users about love at first glance. When it comes to bitcoin, “fellowship” appeared for most of them only after they researched. Here are the most frequent doubts reported by users who have become passionate in the meantime.
- Why is the creator of the bitcoin anonymous?
The Bitcoin Code software was launched in 2009 by an anonymous author, under the pseudonym Satoshi Nakamoto. It may have been created by a programmer, or a whole team, a university or a company. No one has learned the identity of Satoshi Nakamoto in the meantime.
When you plan to invest, you always look for company identification data. It includes the jurisdiction to which it belongs (to know the laws under which the company is governed). Then a state registration number, names of administrators with clean records. Moreover, last but not least, have experience in similar, successful projects.
Satoshi Nakamoto offered no data to legitimize “business.” Why? Because he did not propose to people to invest in the business. The more he did not intend to invest in his “business.”
How did it start?
Bitcoin was not designed as a business, an investment, or a company. It was launched as an economic and social experiment. Is it possible to install a new currency on the market, issued by a protocol and not by central banks? How much interest will this currency bring and how does a community receives the tools? What will be the authorities' reaction to contact money that has the potential to disturb their activities? As you can not control this coin, how will they try to counter it?
Taking all this into account, Satoshi Nakamoto may well be anonymous or reveal his identity. We add to this that Satoshi Nakamoto is provoking powerful institutions in the global economy. We also add that the nature of the bitcoin is decentralized. So why give people a symbol of authority over the coin?
It is clear why Satoshi Nakamoto chose to remain anonymous for his safety and the success of the experiment. He has retired altogether for more than five years from the bitcoin community. This is to give people the opportunity to create their government without resorting to a powerful mediator.
Let's not forget that in the case of bitcoin, “you are the bank.” The nature of the experiment proposes the absence of a central head. Moreover, then, you are responsible for everything that can go well or poorly in the system. That's right from losing private passwords to coinage policy. So, if you are responsible, who else can or can you be held accountable for? However, this is not all! Learn more here.
2. Can the Bitcoin lose its value?
An extra reason why people are afraid to invest in bitcoin is that it can lose its value. Undoubtedly, it also had fluctuations in the market over the nine years since it appeared. In comparison, the cost of gold, for example, was more stable over the same period. However, although it saw rapid increases and dramatic falls, the bitcoin would most likely remain.
Why do they say that?
Bitcoin transactions are safer than those using the central bank's current means of payment. Bitcoin is hard to fake, broken or stolen. These attributes are part of the reasons why it was created and for which it will continue to exist.
Check out more info: https://news.bitcoin.com/
3. Many people do not understand it
Instinctively, people generally fear what they do not understand. That's why it makes sense to document and learn as much about the subject. Think of a definition of bitcoin as the digital currency. Of course, you can find more searching for the term on the internet. However, simplified, it is part of the encrypted digital assets that can be used in financial transactions.
Transactions made through digital coins do not use classic banknotes or coins in their circuit. The digital coins do not have a physical shape. They are traded via computers, which define the very space in which the digital currencies exist.
4. Bitcoin is not “backed by gold.”
Governments and central banks create the illusion that gold backs national currencies. In other words, every state has the same money in circulation from the gold in the treasury. The principle is simple. There must be a higher limit of funds emitted by a central bank. Otherwise, if a central bank can issue a discretionary banknote, then inflation is created. The value of the money on the market (according to the simple law of supply and demand) decreases when new money is injected into the economy.
Gold is a limited resource that takes time, effort and resources to be issued. So any coin that sustains gold has some immunity to inflation. Bitcoin is not supported by gold. It is the story that central banks and governments sell. We all know that reality is entirely different. Perhaps until the economic crisis of 2008, we were all willing to overlook this. Inflation had a bearable rhythm that most people ignored.
Therefore, fiat money is not supported in their value in gold. It does not mean that they were abandoned or that the excess was resorbed from the system to reflect reality. The currency does not support its value in gold. Instead, it helps the fundamental principle of limiting production. The Bitcoin protocol cannot issue more than 21 million chips in total. These chips are mined, like gold, over time, using effort and resources.
The principle is identical and very transparent. It also resets the economy to the basic laws that banks only claim to respect. Even if the bitcoin is not “backed by gold” it supports the idea of ”backed by gold”.
5. Bitcoin can be banned at any time!
Governments have the law at their fingertips, as everything that exists through the goodwill of the authorities. We are not witnessing backstage games. We have no control over them. I admit, however, that it is difficult to change the set of thinking of society. The reality is that yes, the decisions start from the top down and not the other way round. On the other hand, governments can not oppose the laws of physics. Of course, tomorrow legislation can stipulate a speed limit for the light, but how does it impose it? The word of order when you issue law is how capable you are to defend it?
The Governments, as they see today, fail to protect themselves from decentralized attacks. A recipe has not yet been found to reject them forcefully, and this has been seen throughout history. The fact is that technology is far outpacing the capacity to implement and advocates a law prohibiting bitcoin. They can certainly make it harder to use, and send it underground. They are aware, however, that in the underground the value of the bitcoin will increase, just like any forbidden property.