Digital currencies are on their way to becoming a major way of trading in an economy. What’s more surprising is that each country’s economy may now be familiar with using 2 or three currencies! With countries all over the World experiencing rapid digitalization of their economies with less cash being used, this day may not be too far. Let us ask ourselves, what is money? Money today is not the number of notes, but it is a number in your bank account, in your phone. Money is a number that represents what you hold in terms of shares, securities and other investments. All currencies are numbers that have a certain value. A Dollar, a Pound, a Rupee and a bitcoin, all have separate values.
A bitcoin is a digital currency that is still very new to the World and it’s just a matter of time before we get used to it. Bitcoins are gaining popularity mainly because trading these is very safe and secure. It is practically very difficult to hack into a blockchain system that hosts the bitcoins and steal this money. Credit card companies, banks, NGOs and other financial institutions face many cyber-attacks everyday, and just one of them has to be successful to cripple the institution! Hackers have stolen Billions of Dollars of money and other financial and personal data in this way. Bitcoins have never been hacked or stolen till date. Another advantage of Bitcoins is that they are completely encrypted and no personal data is exchanged when a payment is made or received. Thus, even if there is any security breach, the chances of a user losing confidential information are very low.
Digital currencies operate in a very different way than traditional banks. Banks rely on a single or a few servers, which when hacked cause chaos. Digital currencies operate with a blockchain network that is a peer to peer system. Making this transition is what will take sometime, but once done, it is sure to change the way the World of Finance operates. Japan is one of the few major economies to recognize Bitcoin as a legal payment method and tender. It will be building a proper exchange, other requisite infrastructure and shall begin training employees for the same. The Swiss too use Bitcoins quite freely. Creating an infrastructure for this currency is bound to create a lot of jobs in this sector that shall change the way we do business.