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Singapore Bitcoin

Whilst it's true that Bitcoin has been making very healthy gains this year, the path to this greatness has been (and likely will continue to be) filled with turbulence. After all, the 300% or so hike in value didn't come without a fair amount of volatility. It seems every piece of news, good and bad, is amplified over the internet, undoubtedly by parties keen to influence Bitcoin's value for personal gain, resulting in relentless oscillations, steep peaks and precipitous declines.

But before we go on, let's take a little peek under the Bitcoin hood. Let's see if we can illuminate the world's most famous cryptocurrency. If you're not sure what Bitcoin is and what its potential is, particularly in light of Singapore's Smart Nation ambitions, then this article will be an informative one for you.

In its most basic terms, Bitcoin is a cryptocurrency, a digital kind of money, the grand daddy of them all, as Bitcoin was the first cryptocurrency to ever be created.

And right off the bat, this is where we transect Bitcoin's first peculiarity as compared with traditional currency. You see, unlike regular money, also known as fiat money, Bitcoin wasn't created or issued by a central authority, be it a (central) bank or a government. Instead, Bitcoin was conceived by a private entity by the name of Satoshi Nakamoto, who unleashed Bitcoin to the world with the objective of it being a completely decentralized currency.

As a decentralized currency, Bitcoin does not require a third party guardian to control the money pool, its interest rate, or any other of its parameters that third party guardians - rightly or wrongly - may deem in need of tweaking at any given time.

In effect, Bitcoin cannot be tampered with. Its backbone, the Blockchain, guarantees that Bitcoin is not only tamper-proof, but also that Bitcoin remains fully public, fully transparent and fully non-counterfeitable. In fact, Bitcoin is said to be more secure that its formal currency counterparts, due to the fact that these will always be plagued by their single point of failure architecture.

PayPal, Visa, Mater card, Western Union, private banks, etc, all of these are prone to serious hacking, by virtue of their centralized mechanism. All stored details, personal, financial etc, are stored at one single point, which, when breached, will reveal all.

Now, in order for Bitcoin to be hacked, the hacker would need to break into countless computers of the Bitcoin network, access the Blockchain of every single one of these computers and then amend each and every copy of these computers' Blockchains to suit his/her needs. This exercise is as good as impossible.

But apart from Bitcoin's laissez-faire protocol and iron-clad security, the lack of an intermediary also makes transacting and transferring Bitcoin several orders cheaper than regular cash.

For instance, take a transfer of $5,000 from the US to New Zealand. By telegraphic transfer, this transfer could well take up to a week and may well end up costing the sender $50-100.

The receiver may also be charged for the privelege of receiving money into his/her account. Worse, the sender may not even know the final cost of the transfer until after it's been received.

A Bitcoin transfer of the equivalent amount takes less than a minute and costs less than one dollar.

Of course, if the currency was in USD and needed to be converted to another currency, you'd be charged for this by the bank too. Funds sent in Bitcoin, on the other hand, don't need converting. After all, Bitcoin can be spent as Bitcoin everywhere.

What's not to like?

At this point, it should be clear, given the incumbents' vested interest in the old money system, that established players are none too pleased with the arrival of Bitcoin to the scene. Obviously, Bitcoin is a direct rival of the current status quo.

Banks, clearing houses, payment providers etc would prefer to see the back of Bitcoin. Knowing this should go some way to explaining the disparaging soundbytes by the likes of Jamie Dimon et al. They're all concerned about Bitcoin one day eating their lunch.

Since Bitcoin's ceiling of 21 million units is hard-coded into its Blockchain script, it's clear that Bitcoin, as opposed to regular currencies, such as the USD, EUR, CNY and JPY, which seem to always be subject to helicopter-money manipulation, is not susceptible by inflation-related issues. As a matter of fact, Bitcoin is disinflationary, rather than inflationary.

This fact makes Bitcoin a very suitable store of value. Some have already favorably compared Bitcoin to gold. Hence Bitcoin's oft-quoted sobriquet: "Digital Gold".

With all this being said, it should be noted that none of the above is currently the case, or even about to happen tomorrow. Bitcoin, for all its immense promise, still has a considerable amount of maturing to do, especially in: 1) the realm of government oversight (the good kind) and 2) bitcoin's code/performance upgrades.

However, one thing is for certain, Bitcoin is the world's first digital currency and it is poised to become the digital money of choice around the world. It's early days yet, but given that most of us are already halfway our journey to a cashless society, the time for Bitcoin is right.

Want more information about Bitcoin the cryptocurrency in Singapore? Click Singapore Bitcoin.

I am not an investment advisor and above article is for purely informational purposes and is not to be taken as investment advice. Investors are advised to personally undertake adequate due diligence, or to consult a financial advisor in order to determine what assets - if any - are appropriate to invest in.

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