Evolving To Bitcoin: How Will Currency Change in The Future?
Humans have been ever evolving when it comes to currency. Right from our barter system to the modern form of cash and notes that we use today, the point is that we can buy whatever we want today without thinking about complexities involved that were earlier existing in the barter system.
While all these currencies are extremely tangible, we also process payments and make exchanges virtually. It means that while cash and coins are something you can keep, there are other forms of currencies that you cannot directly keep. You might have got a list of it that we are talking about cards right now.
The Complexities of Common Payments
Cards are in fact one of the most valuable forms of currency right now and have been able to get us anywhere and buy anything. Obviously that depends on how much money we have in our bank account, but nonetheless, you don’t need to carry truckloads of it, if you are eyeing something expensive.
The point is that money seems so seamless when you don’t physically see it. You are able to do more than a few things on your own and go on making purchases and transactions wherever you like.
While you can count the currency notes and coins physically when you have them, you don’t do any such things with cards. For a person, this means that when you purchase anything, the details of the purchase are stored as transactions in your bank account. No physical money gets transferred anywhere.
The same transaction is processed at the person’s end from whom you are purchasing anything. So, the question is, when you purchase everything without the constraints of physical money, how does the transfer take place?
The answer is simple, Money gets transferred electronically. The financial organizations such as banks etc. make changes to the figures in your account and in the service provider’s account to reflect a transaction. The same is conveyed to you via a notification such as an SMS or email.
When we talk of an electronic change, it simply refers to a change made using a computer algorithm. For example, when you purchase a car that is worth $1000, you pay using a card. The retailer takes your card, swipes it in his machine, and voila! You’re free to take your car to your home.
While the entire experience sounds amazing, the background processes are complex behind it. As the retailer swipes the card in the machine, you are supposed to enter the pin in your machine. This pin is a sign of validation that helps in establishing the authenticity of the transaction.
Once you enter the pin, the information is verified by the financial institution that is the fundamental caretaker of your money. In other words, it is the bank that quickly verifies your pin and decides whether to process a transaction or not.
After your pin gets verified, the algorithm makes changes to the figures in your bank account and that of the car retailer’s. Therefore, while you receive an SMS of a debit of $1000, the car retailer gets a notification of credit of $1000.
Similarly, even cardless payments exist and have been popularized by the audiences across the world. One of the most common forms of payments is internet banking. The form of currency is digital but a user doesn’t get to carry a card or cash to make a transaction for it. Usually, internet banking is extensively used for payments made in eCommerce.
However, another form of currency is taking over which is completely digital in its entirety. Known as bitcoin, the currency came into existence only in 2009 and has been one of the most talked-about currencies in the world.
One of the best advantages of using Bitcoin is that there are no middlemen involved as we talk of payments. If you’re wondering what middlemen exist in usual currencies, it is the bank. Bitcoins can be used without having to get a verification of banks. And that’s because bitcoin currencies aren’t stored in the bank.
They can be used to book hotels on Expedia and buy games for your Xbox, but most of their hype comes because of its trading capability. So, what does it mean to process a transaction without any bank in the middle? Let’s understand it this way- when you process a payment via modes like cards and internet banking or any java development India secure payment, you need to verify a pin at the end of the bank. And that is because the bank is storing your money, so all of our transactions will be tracked.
On the other hand, when you’re using bitcoin, you are completely anonymous in terms of transactions. While regular payments are tied to international regulations, bitcoins are the most free form of currency. Having said that it is presenting a lot of opportunities for people interested in trading. We’ve come a long way in evolving currencies, and while every other currency is tied to a middleman called a bank, bitcoin offers complete flexibility across borders.