Russia has been one of the reasons behind Bitcoin’s drastic increase the past few months since it announced that Bitcoin is “not illegal” anymore in the country. The acceptance towards bitcoin shown by the Russians has boosted the bitcoin value, which is a major advantage to the cryptocurrency.
Burger King is one of the largest fast-food franchise in the world and to hear that it is leaning towards Bitcoin as a payment method is interesting. Although, it is yet to decide the software they’d be using to accept bitcoins.
Let’s not forget, this isn’t the first region to accept bitcoins as a payment option at Burger King. Arnhem Bitcoinstad welcomed Burger King to their list of Bitcoin merchants, by the name of Burger King Arnhem. It was the first Burger King restaurant to experiment with Bitcoin.
Since the cryptocurrency hasn’t exactly been announced as a legal tender, it causes some taxation issues. We are yet to see how Burger King will handle this problem as they move along with their decision.
It is possible that after seeing Russia’s initiative, other countries may begin to implement such payment options as well, which is what every Bitcoin enthusiast is waiting for. This will only open new doors for Bitcoin, especially in Eastern Europe.
Bitcoin’s value increases with time. When bitcoin outperformed the U.S dollars by 30 percent. It became the best performing currency in 2017. Here, I’ll discuss some comparison with you, about the bitcoin profitability.
Gold, silver, litecoin, Altcoin vs Bitcoin
The 2017 year is best for bitcoin. This cryptocurrency achieves $5 bln market cap in early April. Gold is a precious metal with an extremely limited supply. Whereas, silver is a precious metal also limited in supply. The historic gold/silver ratio is 16:1, meaning 16 ounces of silver were equal to the 1 ounce of gold. The recent ratio of the gold/silver is 64:1, or 0.015625.
In 2013, Bitcoin price reaches to $1242 per coin. Unfortunately, on the same day, gold’s price was $1240. Whereas, litecoin reaches $48.47 per coin that time. In addition, silver’s price in late 2011, was $49.76 per ounce.
Bitcoin has an extremely limited supply and its mining is in digital form. Whereas, Litecoin is also limited in supply but not as bitcoin. The designed ratio of bitcoin/lite coin was, every 4 litecoin will equal to 1 bitcoin. The recent ratio of BTC/LTC is 80:1, or 0.01239. An abnormal difference of 20%.
Gold/BTC current ratios are similar. But their values cross each other. It is totally insane to compare gold/silver with bitcoin. The reason is, gold and silver have physical worth. Whereas, BTC/LTC both are the digital currencies.
Yes, we can compare BTC with other cryptocurrencies. Here, a question is, what is the future of bitcoin in 2017. Its answer is completely simple. Bitcoin’s future will be bright. Because it crosses the precious metal price.
Bitcoin vs Litecoin
Block time for bitcoin is 10 minutes. Whereas, litecoin’s block time is 2.5 minutes. The recent ratio of BTC/LTC is 80:1, or 0.01239.
There are a number of litecoins available in the market, i.e. 84 million. Whereas, bitcoins will not exceed the limit of 21million.
Bitcoin uses the longstanding SHA-256 algorithm, whereas litecoin uses the new algorithm known as Scrypt.
Bitcoin vs Altcoin, Ethereum
There are more than 500 cryptocurrencies. Few of them are known in financial markets, all over the world. 2017 is going well for cryptocurrencies. After the success of the Bitcoin, most of the digital currencies are active in the financial sector of the world.
Most of the altcoins are built upon the same framework. Which provide the cheapest ways of transactions on the internet. while ethereum gives developers the opportunity to create all sorts of applications that carry out their own set of operations.
Many other cryptocurrencies trying to target the bitcoin’s perceived limitations. Unfortunately, bitcoin has maintained its value. From above discussion, we conclude that, its golden chance to invest in the bitcoin world.
On 27th March, a public statement was issued by Bitfinex, in which it stated that the platform won’t be supporting the “oil-backed” Petro token, which was launched in February by the Venezuela government.
Bitfinex is a Hong-Kong based crypto exchange trading as well as currency-storage platform, which was established in 2014 and since then, it’s been the largest platform for Bitcoin.
Bitfinex Blog Post
On Bitfinex, the statement was posted:
“The government of Venezuela (“GOV”) has recently introduced the Petro token (“PTR”), which purports to be a cryptocurrency backed by oil.”
In this blog post, which was posted on 27th March, the world’s number four crypto-exchange by trade volume (24-hour), clearly explained their decision, stating the fact that recently, the US had banned all of its citizens from buying Petro cryptocurrency, as well as other Venezuelan digital currencies similar to Petro that could be introduced anytime in future. It was written by the exchange that it perceives the coin as it has limited utility.
“We have never had plans to include the PTR or similar tokens in the Bitfinex trading platform. In light of the U.S. sanctions and the other clear sanctions risks of dealing in these products, Bitfinex will not list or transact the PTR or other similar digital tokens.”
According to the Bitfinex team, the limitations are not only applicable to the US clients, but also to the consumers of the platform. They are also linked to all of the activities on the platform, like;
The platform also further added that regardless of location, all of its employees and contractors are also banned from transacting in the Petro. This news from the crypto-exchange Bitfinex follows the latest exploratory work by “Time magazine” that connects the Petro cryptocurrency to the Russian government.
There is a huge bank of indications to advocate that this digital currency issued by Venezuelan is a Russian experiment in sanction dodging. According to Time Magazine, Russia have been considering to use cryptocurrency to dodge the sanctions globally, however, they decided to assess the idea in a state, when there’s very little to lose.
Bitcoin is a decentralized digital currency. There is no physical existence of Bitcoin, just the verification and value it has been given by a global peer-to-peer network. All these transactions are recorded in Blockchains.
The blockchain is very much like a public shared ledger. All the confirmed transactions performed ever using Bitcoins are recorded in this ledger. These blocks are an ultra-secure data, treated like cash. All the transactions are received and sent through wallets which are digitally signed. To ensure security, bitcoin wallets come with a private key or seed. These signatures ensure that the transaction is performed by the current owner of the wallet and provides with the mathematical proof. In reality, there is no transfer of Bitcoins but the change of ownership and quantities of Bitcoins.
How Does a Transaction Work?
If person A needs to transfer Bitcoins to person B, the transaction carries three parts.
An Input- record of wallet of person A
An Amount- the number of bitcoins person A sends to person B
An output- person B’s wallet
How Can You send Bitcoins?
To send the Bitcoins to anybody you require two things.
A bitcoin address is generated by an individual randomly. It mainly consists of a sequence of numbers and letters.
A private is a secret key with a unique sequence of numbers and letters.
When person A wants to send coins to person B, she signs a message with her private key to authorize the transaction. The transaction will include,
Input (source wallet)
Number of Bitcoins to sent
Output (person B’s address)
Person A then sends the number of Bitcoins to the Bitcoin network from her wallet. Once entered in the network, miners will then verify the transaction included in the blockchain. The miners will then solve the mathematical puzzle and in the end, it will verify that person B is the new owner of the specified number of coins.
Just like account ledgers containing amount and names, blockchains function almost the same. People exchange money by changing this file.
For instance, if person A sells a product to person B for $5, person A’s balance goes up by $5 and person B will have a reduced balance of $5.
There are no third parties involved in the system, like banks or other financial institutions. So, who takes control and responsibility of controlling and maintain this ledger? Every coin holder maintains their own copy of the ledger. All the participants can see each other’s ledger and their balances. In Bitcoin ledgers, these names are exchanged with specific numbers to ensure anonymity.
To keep every ledger synced and harmonized, there is a protocol that needs to be followed. To do a transaction you tell everyone by broadcasting a message with your account number, the receiver’s account number and the amount to be transferred. Every coin holder around in the world will update their ledger.
There are people who help in maintaining the system. You can simply use the system to perform the transaction without maintaining the ledger.
To ensure sender is the real owner of the account, Bitcoin requires a signature to verify it, but a mathematical signature.
When an account is created, a private key is generated mathematically linked to that account number. The private key and the text from the transaction are processed through a special cryptographic function to generate a signature. To make sure the signature is done by the wallet owner and to the specific transaction, another function allows the other people to verify the signature. These signatures cannot be copied as they are unique to each transaction.
The main problem with the system is that this cannot verify when a transaction was performed.
For example, if a person falsely has to withdraw 2 cheques out of an account but it has enough money to cover one account. the bank will refuse the second cheque due to an inadequate amount of cash after the with drawl of the first cheque. It is much harder to determine the order in Bitcoin. Due to the scattered individuals all over the world taking part in the transaction, there may be a delay in different orders in different places. Fraudsters could lie about these time lapses.
Two recipients might both think their transaction is first and ship a product allowing the fraudster two spent the money twice.
New transactions go into a pool of pending transactions. These transactions then get into the giant chain that locks in their order. A lottery is then held, enabling participants to choose a transaction of their choice to solve a special problem to link them to the end of the chain. The person to find the solution first wins and gets their transaction next in the chain.
That’s how pretty much all the transactions in the Bitcoin system are performed.
Since the introduction in 2009, Bitcoin has been on an incredible rise. The value is always going up, and so is the speculation about BTC’s future.
At the time of writing, Bitcoin had already gone past the $2500 mark – and the trend is still expected to continue. Incredible! Isn’t it?
Considering bitcoin’s popularity, it is clear as rain that this currency is surely going to play a huge role in the B2B (Business to Business) community in future. However, the question is; what role will it play and how will bitcoin affect the B2B community worldwide?
Anyone with the slightest of the knowledge of business community would know that the volume of B2B transactions is way too higher than the volume of P2P (Person to Person) transactions.
Moreover, bitcoin in business has all the potential and tech to replace traditional payment systems – wire transfer being the most common one. In terms of speed, wire transfer is quite slow. The transfer between two countries may take up to a week; which, in business terms, is a waste.
Another traditional payment method used in the business community is ACH (Automated Clearing House). The method is cheaper but slower than the wire transfer, so it needs replacing too.
On the other hand, the client, as well as the merchant prefer instant Bitcoin payments and is a perfect fit for it. The crypto can be used to send/receive payments within a short period of time which may range from one to a couple of hours.
After reading all that, one might wonder: “if Bitcoin is instant and convenient, what’s stopping it from breaking into the Bitcoin B2B community?” It’s the acceptability and lack of usage. Bitcoin payments can only work if both parties are willing to use it – and considering the risks associated with this currency, not many are ready to accept bitcoin as a payment method.
However, if the business community decides to go with bitcoin, here are some benefits that they can enjoy:
Compared to conventional payment methods, Bitcoin is super-fast. The ability to complete international transactions within a few seconds/minutes can solve the speed issues.
Low transaction cost is another advantage of Bitcoin. Where other methods cost up to 10-40 USD, transactions through Bitcoin only cost a few cents.
The majority of the adult population relies on services like Money Gram or the Western Union for money transfer. Services like these follow a set of rules and restrictions imposed by the government; which greatly affects one’s ability to do business.
However, Bitcoin can solve the issue as it is regulated by a third party to impose restrictions on users. It ultimately provides users with more freedom and makes the transfer process simple. Anyone with a regular PC and access to the internet connection can transfer the coins to whichever part of the world they want.
These are some of the pros that Bitcoin brings with it for the business community. However, all is not that simple. Bitcoin adoption in B2B community can also bring about some harms with it – security and price volatility being the most common ones in Bitcoin community.
One of the biggest issues with Bitcoin is that the security is the responsibility of the individual making payments. For example, if someone is sending a certain number of bitcoins to someone else, the first thing they will need to make sure is to send it to the right address. A slight mistake and the coins are gone forever.
Another issue is that your computer at which bitcoins are stored must not have any spyware and other suspicious programs installed on it. It compromises the security of the bitcoins.
Another issue with Bitcoin is high volatility. The value of Bitcoin changes in a matter of minutes. With such instability, it’s almost impossible for the business community to adopt Bitcoin payments.
Although Bitcoin is the most popular form of cryptocurrency and allows instant transfers, there some issues with it – stopping it from a wider adoption. Once these issues are dealt with, there is no doubt that bitcoin will rule the business world.