Bitcoin claimed to change the payment methodology when it was introduced, stating that people would no longer need to depend on banks for transactions anymore. But it seems that the proclamations have not yet being accepted; so is the bitcoin.
As stated by the developers, the transactions would be verified and authenticated by the bitcoin protocol. However, the main obstacle of bitcoin acceptance is a lack of public awareness and usability. Though the developers and researches tried to use metaphors to make people familiar and comfortable with the blockchain technology, yet it turned out to be more confusing and complicated.
People tend to assume that the cryptocurrency can be used as regular money. Whereas they are mere data which are highly secured in a restricted database. Further, there are no wallets but software applications which monitors and records the transactions.
Adoption of bitcoin as an alternative payment option can be made possible only when it serves as conveniently as other forms of payment. An advantage of bitcoin over other forms of payment is that the transaction fee is not deduced which makes bitcoin cheaper. Further, transactions are not hindered by any third party, including banks which makes its security potent and impenetrable.
If someone wishes to pay using bitcoin, he/she can transact the exact amount in another’s bitcoin address merely by confirming the unique PIN number. The rest is taken care by the miners who verify if the transaction is legit.
Despite such advantages of bitcoin, its usability is less. People adopt the technology they understand and believe in. So, the only way to make way for bitcoin in the market of digital currency is making people familiar with the bitcoin protocol. This can be done by acquainting them with the general terms and procedure of blockchain and cryptowallets.
What is bitcoin?
It is a type of cryptocurrency which is generated and regulated by a network of computers using encryption techniques. Hence, its production is not dependent on any authority including banks or sovereign states. Bitcoins are produced through mining which is regulated and controlled by the peers of the network.
The bitcoin transaction data is saved in a very secured and restricted database which is known as blockchain which functions as a digital ledger of dealings. It’s a platform where cryptocurrency users can record their bitcoin-based transactions just like them as they keep records of money in regular business. The only difference is that blockchain is a decentralized and distributed system. It is an open-access ledger whose records are permanent and verified by the network of a peer. Therefore, all the past transactions can be seen but cannot be altered without the approval of a majority. It indicates the security level of blockchain which doesn’t compromise with the traditional ledgers.
How are bitcoins stored?
Bitcoins are stored in cryptowallet which is a software application that stores private keys. These private keys are further connected to public keys.
Bitcoin hasn’t yet reached the level where it can be used as regularly as any other mode of payment. If the transactions become easier to comprehend. Only then can people develop their trust in this technology. Further, rather than treating it as any old method of payment. Cryptocurrency should be taken as a fresh and revolutionary way of transaction.
We hope this article added a bit of good knowledge in you. You may also want to check out these Central-Bank Digital Currencies: Towards A Cashless Society?