Opinions

Need for Bitcoin (BTC) to be Divided into Two Parts

The use of Bitcoin (BTC) in recent times has derived the need for bifurcation of the cryptocurrency around the world into multiple ways of utilization.

Bitcoin has been used for different purposes over the years. Some institutions using the digital currency for investment purposes while some purchasing it to be a part of a decentralized network at a reasonable cost regulated by government institutions.

While both the processes have proved to be fruitful for Bitcoin users, they may also be a subject of a rising conflict in the crypto industry. Nonetheless, this conflict could also prove to be a healthy one as it may help divide the use of bitcoin in different parts of the world with accordance to the rules and regulations of different countries.

If bitcoin can be identified as a greater form of currency due to its monetary policy, more investors might be interested in investing in it. These institutional investors might be the pension funds, endowment funds, insurers and maybe even the central banks. Not only the institutions will look to make use of the digital currency, the benefits that bitcoin holds and the ability of the cryptocurrency for trading and holding, individual investors will also be attracted.

A major challenge of owning bitcoin will be its custody for many institutions as institutions hardly ever take custody of their own assets. The ownership of these assets are often overseen by external bodies in a centralized system while bitcoin is primarily based on a decentralized network.

The centralized system which is followed by custodians of assets of different institutions is opposed by many bitcoin users due to the fact that it kills the essence of a decentralized system and those institutions are held in question on how they would execute the split of bitcoin according to its use around the globe. The objection of bitcoin users against the centralized system is rather justified because bitcoin is a censorship resistant money where everyone can transact with the network on the same terms and a centralized system serves in contrast to this function.

Since bitcoin serves as a medium for people to carry out their functions away from government institutions they are not comfortable around, many countries automatically write off the usage of bitcoin in their premises. China and Zimbabwe are two examples of such events where a decentralized network is more effective.

Presently, if bitcoin isn’t successful as an instrument for opportunity due to any reason, it is probably not going to be taken in consideration all things kept in view, in which case this entire dialog is unsettled.
The cryptocurrency should fundamentally enhance in its usability, especially around key administration. It will require a decrease in apparent instability, and liquidity in these nations that require censorship resistant money, that by their temperament likely have capital controls limiting cash development.

Eventually, the need for bitcoin to be seen as a possible alternate of gold will be required but it will certainly be no accomplishment achieved and while there is possibility of that happening in reality, the journey to achieve that is definitely a long one.

If bitcoin somehow manages to accomplish this desired status then it will give rise to the possibility that bitcoin can successfully achieve the longed dual status all across the world. There are countries where the practice of following a centralized system is a priority, the censorship resistance becomes slightly less important for investors in such countries and thus, bitcoin can be used as an asset similar to the value of gold, held in centralized institutions.

The idea of bitcoin being operated in a more centralized system is not such a bad one after all considering that it will still be used for other purposes in different markets. However, bitcoin should more preferably be operated under a decentralized system keeping in mind the nature of the cryptocurrency which is a censorship-resistant medium of value transfer and storage that differentiates it from other assets.

Jaudat Sulehri

A management student, sports enthusiast and a writer. Jaudat gives his insights on the cryptocurrency in the world of trade and blockchain technology in particular. He also holds investments in XRP and BCH. Contact the editor at editor.opinions@blockpublisher.com

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