Bitcoin has been one of the most talked about topics in the FinTech community ever since it became the first decentralized cryptocurrency. Thanks to its popularity, Bitcoin has gained plenty of media coverage as well as an incredible following, not just among enthusiasts and early adopters but also among critics who warn that it’s not ready to become an accepted form of currency and payment method. To most people, Bitcoin was simply viewed as an investment vehicle; however, other people saw in it the potential to revolutionize the financial industry by providing a secure means of digital transactions between individuals and businesses from all over the world at minimal costs.
What is FinTech?
Many observers and market researchers agree that FinTech is one of those buzzwords that brings together two disparate industries – finance and technology. Yet, there are still many unanswered questions when it comes to what actually constitutes FinTech. Well, we’re here to set your mind at ease: it’s an umbrella term used to describe any type of innovation in financial services.
The F stands for financial, while the T stands for technology. A great example of this is cryptocurrency.
All cryptocurrencies have a finite number of coins in circulation, which can be traded for goods or services among people on some public bitcoin forums. The best cryptocurrency will be determined by its liquidity, transferability, stability and applicability.
The term fintech can be applied to any technology which offers a service which manages financial services via software, such as mobile payment apps or online banking. Fintech can be described as a general category, which encompasses many different and new forms of finance.
What role do cryptocurrencies play in FinTech today?
Cryptocurrencies are new to society, but they have already significantly impacted FinTech. For example, cryptocurrencies such as bitcoin help facilitate the transfer of digital money worldwide at a low cost. One advantage to cryptocurrency is the users ability to transact privately with user-generated coins and peer-to-peer networks. Additionally, cryptos enable instantaneous exchanges of money and assets in both online and brick-and-mortar locations.
Therefore, cryptocurrency is popular in places with unstable currencies, as in Venezuela. When the bolivar went into free fall, cryptocurrency gained popularity because it was less susceptible to inflation and could be more trusted. Cryptocurrencies, in particular, are highly relevant to the 1 billion people who are unbanked in the world, who don’t have a bank account but have access to a mobile device. These people can’t use traditional banking products, but they can use cryptocurrencies that have mobile functionality.
Theoretically, cryptocurrency helps create new markets for Fintechs, and also lets customers who couldn’t have accessed Fintechs previously benefit from their products. Some might argue that bitcoin is the best, but the debate seems to have concluded.
Bitcoin has gained momentum since its inception in 2009, reaching a market cap over $300 billion USD and capturing more than half of the total cryptocurrency market share. Some argue it’s not fair to call bitcoin a true currency because it doesn’t meet two key qualifications: it isn’t widely accepted as payment for goods or services, and its value fluctuates too much for it to be considered stable enough for everyday use.
Where did bitcoin come from?
Until 2009, no one had ever heard of cryptocurrencies. In 2009, Bitcoin arrived on the scene and suddenly cryptocurrencies became ‘the best cryptocurrency’. Because it was first to market, and because people saw value in its digital currency, it’s often called ‘the father of all cryptocurrencies’.
The history of Bitcoin began in 2009. Satoshi Nakamoto, creator of Bitcoin, mined the first block of the Bitcoin network on January 3, 2009. Satoshi embedded the headline of the newspaper The Times on the first block in order to reflect the economic and environmental preconditions that gave rise to the Bitcoin technology. The first block of 50 Bitcoins is now referred to as the Genesis Block. Bitcoin had very little value at the beginning of its lifespan. Within six months of their birth in April 2010, a Bitcoin was worth less than fourteen cents. The pizza’s price per unit was highest in early November and fluctuated within a range from 29 to 36 cents.
Today there are over 1,500 cryptocurrencies available for trading (although not all can be considered digital currencies). There are also variations that use blockchain technology but don’t necessarily use digital currency, such as Ethereum. So what is best cryptocurrency? It’s impossible to say which is best because they’re all different and have their own features and benefits; however, some of the more popular ones include: Bitcoin (first), Ethereum (allows developers to build apps without having to learn a new programming language), Litecoin (has faster transaction times than bitcoin).
What are some well-known cryptocurrencies?
The most popular cryptocurrency is Bitcoin, but there are many others. The list of cryptocurrencies continues to grow as new currencies emerge in response to public demand and market competition. The current market cap of these digital currencies is more than $905 billion, with bitcoin representing over 70% of that value.
Some other notable cryptocurrencies include Litecoin, Namecoin, Peercoin, Dogecoin and Mastercoin. Litecoin has been said to be the silver version of Bitcoin because it trades much faster and costs less, although it has lower maximum number of coins. Namecoin is a fork from Bitcoin which originally was called Zerocoin but was rebranded because its main feature was merged into another cryptocurrency named Zcash (which we will discuss later). Peercoin differs from most other cryptocurrencies because it relies on an energy efficient proof-of-stake system rather than proof-of-work.
Dogecoin, also known as dog money was originally meant to be a joke currency based on an internet meme. However, it quickly gained traction and even led to fundraising campaigns that raised thousands of dollars for charitable causes. Mastercoin was originally conceived as an extension of Bitcoin but has since evolved into its own cryptocurrency and is completely separate from bitcoin.
Other cryptocurrencies include Litecoin, Namecoin, Peercoin, Dogecoin and Mastercoin.
Why should we care about cryptocurrency now and in the future?
This is a very real question now as both governments and private institutions are seemingly still deciding how to regulate and react to cryptocurrency. A quick look at its market capitalization, and you can see that it will probably only continue to grow, especially if and when bitcoin or other cryptocurrencies are accepted into mainstream finance.
On top of that, there are many people who believe blockchain technology (the underlying tech behind most cryptocurrencies) has huge potential to be used in more than just currency exchanges- one example being smart contracts- which would completely change the way we do business online.
And finally, some experts argue that bitcoin could be better suited for use as an investment than fiat currency- making it a perfect opportunity for those who missed out on investing in the stock market during 2008’s financial crisis.