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Understanding Bitcoin-Differences Between Bitcoin And The Traditional Banking System-Lesson 29

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· Bitcoin,BitClub Network,Crypto Currency,Crypto Coins,Cryptocurrency

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Author : Bitconnect

Network capacity. Bitcoin has a fundamental problem which has come to light as demand for the currency has increased. This is called the ‘block size’ issue. Each block is currently capped at 1MB in size, limiting the amount of transactions which can be recorded on the ledger. Different developers are struggling to agree on what to increase the block size to, although many solutions have been proposed to solve this problem, such as the lightning network at At times of peak demand, it can be typical to increase your transaction fee to jump the queue for the limited block space. The network capacity solution is being worked on by the bitcoin core developers and the community, although the lightning network solution seems the most likely to be implemented, along with an increase in block size. The advantages and disadvantages of bitcoin will be discussed below: Advantages. Trust less, does not require trust of any one entity or corporation to work. Even the creator himself cannot manipulate it to his own advantage on his own. Cheap to send transactions with no extra charges between countries, money can be sent with ease from one end of the world to another in seconds. Bitcoin debit cards exist to serve as a link between bitcoin and the traditional system, allowing its use even with merchants who do not accept bitcoin directly. Free from the manipulation which plagues the traditional baking system. One easy to use currency that is global. Acceptance gradually increasing. Disadvantages.

Not accepted by the majority of merchants currently, although some major ones support it. Blockchain databases are expensive to secure, the power consumption of the entire bitcoin network is enough to power a small country, although this is well distributed. Has legal issues in some countries, such as Ecuador. Provides an easy way for dishonest entities to move money with limited ability to trace them. The inability to reverse transactions in the event of fraud. The risks of a 51% attack, at especially in the case where large mining pools hold a large quantity of the networks mining power, this has been somewhat negated with the opening of many more mining pools. Summary. Bitcoin is a relatively new technology, but is slowly gaining traction due to its ability to be tamper-proof and free from the manipulation which cost average people around the world billions during 2008, while the banks were bailed out. The need to put the power in the hands of the people lead to the creation of bitcoin. In any country with an internet connection, the bitcoin network can be used, the one exception being North Korea which does not allow its citizens access to the public internet. It can send transactions around the world with ease, and the price is slowly becoming more stable as it becomes more accepted in the mainstream. In many places you can buy your coffee with it, you can purchase games on steam with it and in some cases do shopping with it. Using a bitcoin debit card at can complete the link between it and the traditional system while they both co-exist.

If you want to be a part of helping free people from the control of rich individuals and corporations, want an easy way to move money around the world for business or personal reasons, using bitcoin can assist in this. Bitcoin vs Traditional Banking. Both systems are currently co-existing alongside each other. Both look like they are here to stay for the foreseeable future, although the rise of bitcoin is causing banks to rethink certain areas like transaction fees and how they link between countries, among other things. The banking system is open to manipulation while bitcoin is pretty much tamper proof and allows the control of no one individual or corporation. The chances are the adoption of bitcoin or other decentralized currencies at will increase due to its ease of use and being tamper proof. The developers and community are working on capacity issues which would when the solutions are implemented and coconscious agreed, solve this hurdle. In poor countries with limited access to the internet or areas without electricity such as many places in rural India for example, there are still hurdles to cross there. Both bitcoin and the traditional banking system will co-exist for the foreseeable future, although bitcoin is potentially the start of the fall of the manipulated banking system and allows a safe place to store savings and cash away from prying eyes, it is easier to conceal a private key than it is to hide funds in bank accounts.

This could protect people in the event of malicious divorce cases, among other things provided no link between the two systems is proven and no laws are broken. In traditional banking your every action can be audited and picked up by governments, for both good and ill. Traditional banks can charge high fees for transactions between countries, while bitcoin can do it for very little cost, anywhere in the world bar North Korea, at the same rate. Use of a decentralized currency like bitcoin has responsibility, due to the lack of chargebacks and the privacy it offers over traditional banking, and loss of private keys or being scammed means no one reimburses you and the coins are lost forever in the event of a private key loss. Only if you are ready for such responsibility should you begin with bitcoin, as the banks do take on many of these responsibilities and reimburse customers usually if they are hacked and funds stolen, etc. Conclusion. Overall, both systems are here to stay for the foreseeable future, although bitcoin has the potential to change commerce, and the financial system as we know it. Both systems have their advantages and disadvantages which have been discussed. Both will co-exist for the foreseeable future for the time being, although the world of finances and commerce has the potential for a revolution in how it operates due to the invention of bitcoin and other currencies derived from it and the blockchain has other uses, such as smart contracts, as used in the Ethereum at platform. Bitcoin is an advance in technology, and potentially one that puts more power in the hands of the people, are they ready for it?

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