Introduction
Bitcoin fall in a broad form of monetary history. Bitcoin is a decentralized digital money that may be sent from user to user on the peer-to-peer Bitcoin network without intermediaries. Network nodes verify transactions via cryptography and are recorded in a distributed public ledger called a blockchain (Baldwin, 2018). A blockchain is a distributed digital database that records all cryptocurrency transactions. It is constantly expanding as completed blocks and new recordings are added. Each block includes the previous block’s cryptographic hash, a timestamp, and transaction data. Bitcoin nodes utilize the blockchain to distinguish valid transactions (Smith, n.d). Bitcoin transactions from attempts to re-spend coins that an unknown individual or organization under open-source. Bitcoin and cryptocurrency can revolutionize how people store, transfer, and create value in money.
Naturally, money is believed to be a physical commodity that may be used as a medium of exchange, such as gold or silver. People consider money a unit of account, a store of value, and a means of trade. Money can be both tangible and accounting units. Money is a physical commodity employed as a medium of exchange and a unit of account when employed as a store of value (Ajami & Goddard, 2017). The method by which banks produce money through lending is so elementary that it repels the mind. For instance, banks generate revenue by lending money they do not possess. Ultimately, confidence must be placed in the honesty and integrity of the organization that issues and regulates the amount of currency in circulation. The government is responsible for issuing money and controlling its supply; it is improper and harmful to allow private entities to do so (Ajami, & Goddard, 2017). Whether issued by a government or a commercial bank, the value of money originates from confidence in the issuing entity.
Investors naturally regard Bitcoin as a speculative asset, and its price has been volatile. Bitcoin fits into the comprehensive history of money in multiple ways. Bitcoin accounts for money in a variety of ways. It is a decentralized currency, meaning any government or financial entity does not control it. It is a digital currency used to purchase online products and services. Bitcoin is a global currency, meaning it may be used everywhere (Baldwin, 2018). Despite these benefits, there are numerous hazards connected with investing in Bitcoin. One of these hazards is that the price of Bitcoin is highly volatile and subject to sudden changes (Smith, n.d). This means that Bitcoin investments could result in substantial financial losses. Another risk is that Bitcoin’s underlying technology, blockchain, is still in its infancy and not completely understood (Baldwin, 2018). This means that the Bitcoin network might be hacked or that Bitcoin’s value could drop if the technology cannot scale.
The emergence of money involves a critical process whereby commodities were utilized as currency in the past. Gold, silver, and shells were universally desirable and acceptable objects. As time progressed, they began to utilize metal bits as currency. These items were easier to transport and divide than commodities. Gold and silver were the first metal coins minted in China at approximately 1000 B.C. People began using paper over time, and the first paper currency was created in China between 700 and 800 AD (Ajami & Goddard, 2017). In approximately 1800 BCE, the Roman Empire established the first banks.
In 1816, England initially adopted the Gold Standard, and in the 1920s, credit cards were first issued. In the 1990s, online payments became available for the first time. Digital currencies initially appeared in the 2000s (Ritchie, 2022). The most crucial event in human history is the creation of money. Throughout the history of numerous nations, money has caused some of the most crucial occasions. The invention of money allowed individuals to exchange products and services without negotiating a fair price (Ritchie, 2022). Due to its portability and compact size, paper currency facilitated international trade. Individuals can invest in potentially growing currencies and spend more easily using digital currency.
Money emerged in the early 19th century, whereby various forms of money were utilized. For instance, DigiCash, e-Gold, and Liberty Reserve were some of the earliest attempts in the 1990s (Ritchie, 2022). Bitcoin, however, is the first digital currency to gain mainstream traction and become widely accepted. It has also revolutionized the way money is transferred, allowing people to exchange money across the globe quickly and securely (Ritchie, 2022). This has made Bitcoin an attractive alternative to traditional banking systems, which are often slow and expensive.
In comparison between Bitcoin and past forms of money, it is evident that Bitcoin is superior to previous types of currency for several reasons. Bitcoin is decentralized, meaning that no single entity controls it. No central authority, such as a bank, verifies and approves Bitcoin transactions (Smith, n.d). This task is instead distributed across a network of computers that anyone can join. Bitcoin is unlike previous forms of money, which a central authority has always governed (Smith, n.d). Traditional payment systems record all transactions through a third party, such as a bank.
Bitcoin is a digital currency that is much different from any other past form of money that has existed in the past. Unlike traditional currencies, Bitcoin is not issued or backed by any government or central bank and is not physical. It is digital and stored on a distributed ledger system called the blockchain. Bitcoin is also decentralized, meaning any single authority does not manage it. Instead, transactions are verified by a network of computers running specialized software. Bitcoin also has no physical form and is created through mining, in which powerful computers solve complex mathematical equations to generate new currency units (Ginez, 2019). Bitcoin is highly secure, with advanced encryption technology protecting individual users and their funds, unlike past forms of money. Bitcoin offers users anonymity and privacy that is not available with traditional currencies. Its decentralized structure makes it resistant to manipulation or control by any single entity (Ginez, 2019). The digital nature of Bitcoin makes it more accessible than other forms of currency, enabling users to make secure, fast, and low-cost payments across the globe.
Unlike the past forms of money, bitcoin transactions are recorded on a public ledger that anyone can view. Another reason is that only 21 million bitcoins will ever be created, making them scarce (Ginez, 2019). This makes gold a greater store of value than fiat currencies, which central banks can generate indefinitely at any time (Ginez, 2019). Bitcoin is a decentralized currency, meaning no single entity controls it. Instead of a central authority like a bank, a network of computers verifies and authorizes transactions. Bitcoin is likewise limited, as only 21 million have ever been made (Ginez, 2019). This makes it a greater store of value than fiat currencies, which central banks can generate indefinitely at any time.
There are distinctions between Bitcoin and other forms of digital money. Bitcoin is the most popular and well-known digital currency, with its unique characteristics and advantages. While other digital currencies, such as Ethereum and Ripple, are based on decentralized networks and blockchain technology, Bitcoin is the first and only digital currency with no physical form (Ginez, 2019). Another key difference between Bitcoin and other emerging forms of money is that Bitcoin is entirely decentralized, meaning it is not governed or controlled by any central authority. Due to Decentralization, transactions in Bitcoin are secure, and no one can interfere with them, unlike other emerging forms of money. Other digital currencies may be more centralized, and transactions can be subject to interference from a central authority. Bitcoin is the only digital currency completely decentralized, meaning that users can make transactions without needing to trust any third-party (Ginez, 2019). This makes it a secure and anonymous currency and the most popular digital currency in the world. Other digital currencies may require users to trust third-party services or may not be as secure.
Bitcoin is the most established and well-known form of digital money today, but there are other emerging forms. These include Ethereum, Litecoin, Ripple, and many more. These crypto assets offer similar features to Bitcoin, such as Decentralization, low transaction fees, and fast transaction times. However, each of these coins also has its unique characteristics and technological features. For example, Ethereum offers smart contract capabilities, while Ripple focuses on providing a quick and efficient cross-border payment system (Ginez, 2019). This other digital money offers users different benefits, such as increased privacy.
In addition, unlike other forms of digital money, Bitcoin is the only digital currency supported by a major government. This gives Bitcoin the legitimacy lacking in other digital currencies. Many businesses and individuals accept Bitcoin as the only digital currency. This means that Bitcoin, unlike other digital currencies, has value in the actual world. Bitcoin is the only currency not prone to inflation due to its restricted quantity (Ginez, 2019). Bitcoin is the only digital money unaffected by inflation.
Conclusion
In conclusion, Bitcoin is a modern decentralized form that gains its autonomy since any authority or central bank does not offer it. Various forms of cryptocurrency have been utilized, for instance, the DigiCah, e-Gold and Liberty Reserve. Bitcoin, however, is the first digital currency to gain mainstream traction and become widely accepted. It has also revolutionized how money is transferred, allowing people to exchange money quickly and securely. Thus, making Bitcoin an attractive alternative to traditional banking systems, which are often slow and expensive.
Decentralization
Decentralization is a defining characteristic of numerous cryptocurrencies and blockchain-based initiatives. By design, cryptocurrencies are decentralized and distributed, so there is no centralized authority or point of control (Daisyme, 2022). Decentralization in cryptocurrencies provides several benefits, including resistance to censorship and fraud, enhanced security, and better privacy. Decentralization carries several difficulties, particularly in terms of scalability and administration. Cryptocurrencies are a relatively young technology that is undergoing ongoing development.
Therefore, there is no universal approach to Decentralization. Each project must carefully consider the involved tradeoffs to develop a system that works. Adopting Decentralization in cryptocurrency makes firms more resilient and secure and gives users greater control over their finances. The policy enables investors to make independent decisions because the firm’s directives are not dependent on a specific authority (Daisyme, 2022). Consequently, this develops a system of trust, as the system must rely on its integrity to sustain the company’s longevity in the market.
Decentralization of cryptocurrencies has been achieved from the systems’ first enterprise growth in response to market dynamics. As a result of the ability to use blockchain technology in cryptocurrency to reduce rents, most investors prefer these systems, thereby establishing the autonomy of blockchain technology. The new financial architecture eliminates middle management and team member authority to make decisions and provide organizational solutions. By involving all stakeholders, the corporation can decentralize its activities, resulting in organizational growth and opportunity for the business (Indeed Editorial team, 2022). The success of Decentralization has been ensured by allowing middle-level managers and team members to focus solely on their areas of expertise, such as customer insights and business objectives.
Firms have successfully achieved Decentralization by establishing values and culture that serve as a foundation and guide for their stakeholders. This creates a strong culture in the workplace by restoring and reinforcing the company’s values, allowing the company to achieve Decentralization. By prioritizing openness in communication, cryptocurrency-related businesses have established a relationship between customers and staff to facilitate collaboration on business operations (Indeed Editorial team, 2022). This has allowed the company to create Decentralization.
Cryptocurrency-related businesses have achieved Decentralization due to the all-inclusive nature of their workforces. Diversity in thoughts and decision-making has resulted from the inclusiveness of employees. This is accomplished by interviewing employees, consumers, and stakeholders. This has enabled businesses to have a deeper understanding of particular issues, helping them to make well-informed choices. Employers are able to prioritize training that helps employees grasp their jobs, roles, and expectations due to the inclusiveness of their workforce (Indeed Editorial team, 2022). The training programs have provided employees with a deeper understanding of the firm’s culture and management, enabling them to meet company expectations and foster a healthy working culture (Indeed Editorial team, 2022). This has thus enabled cryptocurrency-related businesses to attain Decentralization.
Different cryptographic strategies, like hash functions and zero-knowledge protocols, have enabled businesses to achieve Decentralization. For instance, using key rotations in everyday operations has reduced the likelihood of data compromise. The frequent rotation of master keys on the firm’s key stakeholders enables the development of secure information that safeguards the information (Das et al., 2022). Thus, this aids the company in preventing data phishing and cybercrimes, enabling it to attain Decentralization.
Various network architectures have been developed to ensure the Decentralization of data ownership in cryptographic procedures. For instance, network design’s peer-to-peer (P2P) architecture provides data decentralization without using intermediaries. By distributing tasks among its nodes and peers, the network architecture enables the transfer of digital currency from user to user via blockchain integration (Alizadeh, 2021). Consequently, with the aid of a decentralized blockchain, p2p designs can achieve irreversible transactions. The network nodes are equipped with ledgers that distribute information. The nodes function by replication and ledger duplication. This aids in attaining Decentralization by decreasing trust costs and government support, as well as the need for agents, clerks, and other authorities such as assent officers. Each transaction’s consensus and immutability are not dependent on centralized entities such as governments (Alizadeh, 2021). Thus, this provides Internet of Things (IoT) systems with a security solution.
Using a distributed Hash table (DHT) permits businesses to store data using vital data-based pairs. The distributed hash table nodes constitute a decentralized collaborative structure. The created systems are fault-tolerant, allowing them to handle several information nodes. The capacity to support many nodes equips the systems with massive amounts of data in any desired format. The DHT nodes are easily removable and extensible, facilitating data rebalancing in system clusters. Interplanetary File Systems (IPFS) are decentralized and designed to store and combine data in a decentralized manner as part of cryptographic processes (Alizadeh, 2021). This helps the company discover difficulties and maintain data records that guarantee security.
In addition, it is claimed that Decentralization in hash functions is achieved by distributing the hashing algorithm across multiple network nodes, as opposed to having a centralized entity perform the hashing. This makes the hashing process more resistant to attacks, as an attacker must compromise multiple nodes to alter the hash output. Merkle tree is utilized in hash functions to decentralize them. Each node in a Merkle tree contains a hash of the data it is responsible for (Alizadeh, 2021). The tree’s root then contains a hash of Merkle trees are frequently employed in cryptocurrency systems because they enable efficient and secure verification of data (such as transaction histories) without requiring storage of the entire data set.
Numerous information-protection features, such as the usage of anonymous usernames and user profiles, ensure adequate security for a user’s personal information. Zero-knowledge protocols, which allow data to be shared without revealing any information about it, provide a more flexible approach (Alizadeh, 2021). This is accomplished by allowing two parties to share data without decryption, making it more efficient than homomorphic encryption.
In addition, because zero-knowledge protocols are decentralized, they do not necessitate data storage in a centralized location. Secure Sockets Layer (SSL) and Transport Layer Security (TLS) provide data security for the zero-knowledge protocol (Alizadeh, 2021). SSL and TLS provide confidentiality and data integrity between communication applications. They prevent man-in-the-middle attacks and eavesdropping, tampering, and forgery of the communication’s content. SSL and TLS use asymmetric encryption methods to generate a secret key that is exchanged between two parties. Asymmetric encryption makes use of a pair of public and private keys. Only the corresponding private key can decrypt anything encrypted with the public key. This ensures that neither party has access to the secret key. Message authentication codes (MAC) are utilized by the two applications to ensure data integrity. A MAC algorithm computes a hash value using a secret key (Alizadeh, 2021). The hash is used to ensure the integrity of the message. In addition, SSL and TLS use digital certificates to validate the server and client’s identities. This enables cryptographic processes to safeguard data, thereby facilitating Decentralization.
Additionally, zero knowledge ensures data decentralization by guaranteeing appropriate data storage on computers, hard disk drives, or servers. Data is saved in a file that separates the data and stores it on many servers, requiring the development of a signature containing information about each component (Alizadeh, 2021). The zero-knowledge protocol ensures that the signature is stored in a location distinct from where the data parts are stored and that the signature can be reconstructed using a data verification checklist.
Conclusion
In addition, Decentralization in blockchain initiatives has enabled firms to resist censorship and fraud, enhance security and better privacy. Firms consider using tradeoff systems that make them more resilient and secure. Firms have utilized Decentralization by adopting policies and strategies like hash functions and zero-knowledge protocols. These strategies have enabled firms to establish and develop secured systems that protect their data against data phishing and cybercrimes.
References
Alizadeh, M. (2021). Blockchain and distributed hash table technology in decentralized systems. Doctoral dissertation, Luleå University of Technology.
Ajami, R. A., & Goddard, G. J. (2017). Global business: competitiveness and sustainability. Routledge. Web.
Baldwin, J. (2018). In digital, we trust Bitcoin discourse, digital currencies, and decentralized network fetishism. Palgrave Communications, 4(1), 1–10. Web.
Daisyme, P. (2022). Why Decentralization is crypto’s greatest strength and greatest threat. Entrepreneur. Web.
Das, D., Sethuraman, S. C., & Satapathy, S. C. (2022). A decentralized open web cryptographic standard. Computers and Electrical Engineering, 99, 107751. Web.
Ginez, F. (2019). Bitcoin versus traditional payment systems: is one more effective than the others. Wisdom tree market insights, pp. 1–9. Web.
Indeed Editorial team, (2022). Building a decentralized organization. Web.
Ritchie, J. (2022). The history of money: how our currency evolved from pelts to money. Web.
Smith, N. Bitcoin in history of money. Altus investment management, pp. 1–33.
Appendix
In numerous ways, my contribution to the group discussion was enormous. First, I ensured that I arrived on time at the discussion location and followed up with the other members to ensure they managed their time well. I was always the first to introduce the group and review what we discussed in the prior reading. I ensured that all members completed their assignments and had the necessary materials for discussion. I always insisted that our team read all materials to ensure they were well-informed, and if needed, they would conduct additional research on the topic. I urged my teammates to seek clarification from other students and teachers in certain situations. This allowed us to maximize the group discussion preceding the presentation. Facing a variety of instructors helped me gain confidence. I ensured that everyone contributed to the conversation. I challenged every group member to offer a pertinent opinion on the subject of our research. Our discussion included asking questions, which enabled me to seek clarification and actively participate in any discussion to obtain all necessary information.
As it was a group discussion preceding our presentation, all members were instructed to maintain focus. This allowed me to remain focused on the discussion so that others could benefit from it. In addition, I remained attentive to what my peers were saying. This allowed us to detect errors such as inadequate content mastery. I have learned that the most efficient approach to learning is to take brief notes on what people say for future reference. I only expressed my opinion at the appropriate time, and this taught me that it is proper to allow others the time and opportunity to express their views. I always instructed my team members to pose questions that prompted further investigation.
Consequently, this taught me the importance of seeking clarification when necessary. As we were preparing for a presentation, I challenged every member to take advantage of his or her chance to speak; thus, giving every member a chance to speak helped some members gain confidence during the presentation. Therefore, it is prudent to allow everyone to speak.
We consulted with peers from different groups to assess their progress and gauge our own. Consequently, I learned the significance of comparing my results to those of others. We consistently met to discuss the most critical aspects of our research topic. This allowed us to create a schedule that guided our research and presentation efforts. In addition, I urged my group members to look sharp and dress appropriately for the presentation.
Consequently, this taught me that cleanliness of the body is crucial when serving others. In addition, I urged my team members to arrive early on the day of the presentation so that we could adapt to the environment. Consequently, this taught me that punctuality is a crucial aspect of life.
In addition, I offered my ideas clearly and concisely and was open to other people’s ideas. I was respectful of everyone’s opinions, which made me reach a conclusion that everyone agreed on. After the discussion was over, I thanked everyone for their participation and took notes on any decisions that were made. By following these guidelines, I was an active and valuable participant in our group discussion.