Bitcoin has been tagged the 8th wonder of the world, and many people were caught off-guard by the rise of this cryptocurrency. What would you say of any commodity, asset, or innovation that turned $56,000 investment into $1,100,000 in 12 months? To think this happened to many people in 2017 is almost unbelievable.
The rise of crypto billionaires and millionaires in the past year is all attributable to the debut made by cryptos in world markets. As might be expected, the initial shock to the system of established global framework led to resentment. As the aura of Bitcoin failed to fade, many global finance players, like Goldman Sachs, joined the party.
The concerns raised by all and sundry were not completely unfounded as some salient points came to the fore. Many wondered if this was another Golden Tulip bubble or a Ponzi scheme that was well packaged. Since Bitcoin challenged the status quo of global finance, it was expected that sparks would fly.
As the Bitcoin price surge continued towards the end of 2017, many institutions thought of it as a business threat. Other better-discerning stakeholders have found a way to accommodate the rise of Bitcoin in their business strategy. Here are a few pointers that explain why Bitcoin passes the fraud test:
Bitcoin runs on a protocol that is decentralized. In simple words, anyone on earth can access it without hidden layers. The very first publication on Bitcoin by Satoshi Nakamoto was submitted to the community of cryptography researchers for their input.
Before anything can be branded a fraud, it means the concept underlying it cannot be easily understood. By extension, a semblance of esoteric insight has to be at play. Here is what a fraud actually means:
“Act or course of deception, an intentional concealment, omission, or perversion of truth, to:
(1) Gain unlawful or unfair advantage,
(2) Induce another to part with some valuable item or surrender a legal right, or
(3) Inflict injury in some manner. Willful fraud is a criminal offense which calls for severe penalties, and its prosecution and punishment (like that of a murder) is not bound by the statute of limitations.”- Businessdictionary
Bitcoin passes the economic and financial intellectual test of what constitutes a fraud from the above definition. There is no concealment as to what has to be done for Bitcoin to be mined. The processes are stated, and the governing protocols are subject to public scrutiny without a shadow of a doubt.
The initial doubts and uproar that assailed Bitcoin as the market price hit new highs were traceable to identifiable parties. Business interests lay at the heart of the fiery storm that arose around the globe. Many institutions feared the following and the public had no idea of these motivations:
- Loss of market
- Eroded selling points
- A shift in consumer focus
- Loss of control over a sphere of influence
- Inadequate capacity to accommodate change, etc.
It is clear that the decentralization of input and processing of the Blockchain is paradoxical for any fraudulent intent.
It is Reducible for Transaction Purposes
Bitcoin is reducible for transaction measurement, and no one would say at any time that there was a loss of value due to irreducibility. If a transaction has a value of 0.0000005BTC, you can be sure that the Blockchain recognizes it for processing purposes. Relative to fiat money, Bitcoin value is a reflection of market forces.
Such clear and predictable transaction support shows there was no fraudulent intent built into the Bitcoin algorithm. No matter how big or small the transaction value is, it can be correctly computed and accommodated for processing. Clearly, far more recognition needs to be given to Bitcoin than what exists at present.
Many fiat currencies used around the globe are pegged at the divisibility by 100, and this means that you can have 1 cent, 10 cents, and 100 cents. There is no currency that has less than 1 cent in use in everyday life. Bitcoin presents the smallest divisible amount possible that makes it more flexible than fiat money.
It is Limited in Supply
Unless a change in algorithm occurs for Bitcoin at some point, the supply is fixed at 21,000,000 as shown in this coinmarketcap image:
The clear and concise data that is made available by the Bitcoin community removes any fraud coloration. Any interested party in the workings of Bitcoin can follow technical updates and protocol update suggestions on the GitHub page.
There are no underhand dealings that can be pointed at when it comes to evaluating how Bitcoin works. Criticism and highlighting of the shortcomings of Bitcoin have been an ongoing debate that is open-source driven. Even Central Banks fail to let the public in when policies are debated for implementation.
It Provides Real-Life Use Cases
The relevance of Bitcoin would have been a basis to see it as a fraud if it had no real-life uses. The Bitcoin Blockchain gave the world the first insight on how the Blockchain works. Far from becoming a single-use innovation, the world is now alive to the reality of the Blockchain innovation.
Bitcoin demonstrated the capacity to become a global medium of exchange beyond national boundaries. Today, a Tokyo merchant can exchange services or goods with a buyer in South America without a foreign exchange conversion angle. As Bitcoin has proven to be convertible, widely accepted and durable, its utility has grown.
Today, many interest groups are reviewing what they can do with Bitcoin, and there is no end to this just yet.
It is Evolving
Rather than crumbling under the fraud slur, Bitcoin is evolving at least to modest expectations. There are several fronts of approach to improve its efficiency and usage. The global Tech powerhouse, Microsoft recently validated a protocol that can improve Bitcoin’s transaction efficiency.
There is no way that Tech giants would lend their name to a fraud knowing that their corporate image could plummet. From logical reasoning, the Bitcoin revolution offers more pluses for humanity than minuses. This standpoint points out that Bitcoin is misunderstood in several segments of society.
As long as interest groups feel threatened by an innovation, there would be slurs, calumny campaigns, and outright prejudice. “Truth can be covered but not for long” according to a sage.
It is Community-Driven
Bitcoin is community-driven, and this fact is in the public glare. There is not an individual that can be said to have the fortunes of Bitcoin tied to personal whims. The lead innovator of Bitcoin known as Satoshi gave up the cryptocurrency and its governance long ago to make it objective.
Building Bitcoin into such a community-driven platform was as a result of the foresight of its innovators. There is no way to easily defeat a community if they are not building on a fraud. This is what the story of Bitcoin shows to date.
One of the criticisms against Bitcoin has been the rigidity of rule-change or amendments to its protocols. The model of its governance shows that consensus will always precede any changes that will be made to its algorithm. This measure itself is a guard against fraud in the operations or modification of how Bitcoin works.
It is Wrapped in Transparency
The transparency of Bitcoin is mind-blowing. While in its early days some regulators pointed to it as a function of the dark web, it is now clear that it is not. All transactions on the Bitcoin Blockchain can be seen publicly.
When individuals open Bitcoin accounts there is a digital signature that points to who owns what and the origins of each Bitcoin wallet address. The clarification that Bitcoin is not anonymous in function and design has gradually rolled away the allegations of anonymity against it.
Some supporters of Bitcoin have pointed out of late that national currencies have values that are determined by fiat. Bitcoin has a value that is subject to the laws of demand and supply. In effect, Bitcoin is more transparent relative to fiat money. As the mechanism of Bitcoin is understood, many people are able to see it as transparent.
The Bitcoin Blockchain is Auditable
Before anything can be audited, it means there must be records to work with. The vital inputs, outputs, and outcomes have to be available along with their component units for a review to be done. Bitcoin passes the audit test as every transaction chain persists on the Blockchain.
The audibility of Bitcoin and its Blockchain is a huge plus that its proponents can point at when necessary. Despite the scope of Bitcoin transactions carried out, the unique identity that underlies every transaction promotes its integrity.
The hash which results when a transaction is completed is evidence of a process that adhered to a logical procedure. In other words, how the hash resulted, its initiation, and all contributory parties can be easily identified on the Blockchain.
Our world is witnessing an explosion of changes in the digital sphere that is clearly exponential. Bitcoin represents an era of modern-day innovation that is transparent and evolving for the good of mankind. Bitcoin is certainly not the greatest fraud of the 21st century!Opinions expressed here by Contributors are their own.