Bitcoin’s place in the economy

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In the economic market today, there are two types of money: the real one and the virtual one. In the second category, Bitcoin is the benchmark cryptocurrency. Being the first virtual currency, it is, to date, the best known and the most used. However, it is now an accepted method of payment and has an important place in trading. If bitcoin made a timid entry in 2008, since 2020, it has experienced a meteoric rise exceeding 50%. Let’s see all this in this article.

What is bitcoin?

Bitcoin is a cryptocurrency officially put on the market in 2009. Its code is BTC. He is especially recognized for being the precursor of crypto-currencies and for having initiated the first capitalization of cryptocurrencies.

It was from 2012 that it began to be widespread and began to be more and more accepted. And this, despite a reputation that is not always to his advantage. Indeed, it is a currency without a central bank and the transactions seem blurred. One of its peculiarities is that you can make a purchase of bitcoin without verification .

Bitcoin is based on peer-to-peer exchanges that internet platforms allow. In other words, it relies entirely on blockchain technology. In addition, its encryption algorithms are difficult to understand.

As bitcoin is fully decentralized, it is not subject to state control. All of this contributes to its being easily associated with the financing of illegal activities and money laundering.

A financial bubble

As a benchmark, bitcoin capitalization supplanted Finland’s GDP. This is to say the place that this cryptocurrency occupies on the market. However, it is also characterized by the absence of a monetary authority.

The exchange of this currency is done almost on an international scale. Payments are virtually instant regardless of your location on the globe. Transaction fees are very low, if not zero. They almost boil down to the cost of the internet connection. No identity check is required for this. All of these specificities lead to characteristic issues in relation to economic and legal regulation.

A growing economic mass

The figures regarding the capitalization of this cryptocurrency are staggering. Indeed, it totals 887 billion dollars as of August 27, 2021. The economic weight of bitcoins is indisputable with its occupation of more than 44% of the market capitalization. Bitcoin’s ups and downs rank in the top 30 most popular mediums of exchange. Economists refuse to attribute this currency status to them, but the facts are indeed real and the figures are there to prove it.

If we refer to data from specialized sites, bitcoin is poised to continue its rise. Indeed, in the crypto-economy, the milestone of 2000 billion dollars has again been exceeded. This same scenario has already been observed in April and May 2021.

First comer on the market, bitcoin is now overtaken by Ethereum and is positioned in second place.

This meteoric rise is not, however, without risks. Observers even fear an implosion that could occur at any moment.

Real risks

There have certainly been efforts on the financial normalization of bitcoins. The futures contracts launched by the Chicago Stock Exchange even reinforce this approach. However, investors run a risk by investing heavily in certain bitcoins . Let’s not forget that transactions are essentially done on the web. Hackers are on the lookout for the slightest flaw in the blockchain system and everything is to be questioned.

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