The Future of Bitcoin, Cryptocurrency and the Collapse of Conventional Banks

This week in February of 2018, the bitcoin price is at USD 10,000. In 2011, the price is only USD 1.

If you invest Rp 1 million just to buy bitcoin in 2011, today your investment value will be Rp 10 billion.

is any bitcoin and other cyrptocurrency a radical innovation, or a sensational and irrational bubble?

First of all it should be mentioned that cryptocurreny may be one of the most radical innovations in the history of the currency over the past 1000 years.

bitcoin itself is just one of the most dominant types of cryptocurrency. Other popular cryptocurrency types are Ripple and Ethereum.

Bitcoin and his comrades have a truly heroic mission: to be the world's digital currency, with the same value anywhere in the world. a radical yet plausible idea in this age of digital explosion.

Cyrptocurreny in other words wants to be the global curriculum of a globally applicable world. If this dream materializes, then slowly the role of the Central Bank may become extinct.

in the digital world, the ambition of bitcoin and other cyrptocurrencies to become the world's single currency is a brilliant one: making the transaction process very easy, super efficient, and able to eliminate transaction costs that are often imposed by conventional banks.

cyrptocurreny can also make us store wealth assets only in a "digital safe" that does not require the flurry of old school records.

With all that, cyrptocurrency can also slowly make conventional banks extinct like dinosaurs in antiquity.

the workings of this cryptocurreny is actually similar to gold. These two assets are different thousands of years old, but the essence of its function is similar.

Both can be an alternative currency, without the need to intervene between the bank and the central bank.

thousands of years ago, people traded and traded with gold coins (or dirhams). The gold at that time served as a "currency", which was efficient and not complicated (without the intervention of the central bank and bank, which did not exist at that time).

thousands of years ago, gold and dirham became an elegant currency, and because at that time there was no bank, so also free usury. (This is why some of today's anti-riba people want to promote gold or dirham back as a currency).

the problem, how busy in the current era when buying and selling should use gold or dirham as currency. Cook want to buy goods in Tokopedia, must send gold coins or dirham coins first via JNE. Ribet and unsafe.

It was cryptocurreny.

the basic idea of ​​cryptocurrency is exactly the same as the idea of ​​gold users thousands of years ago: both want to be the world's single currency, simple and powerful, without the intervention of banks and central banks.

but if gold is a bar and coin shape, if bitcoin is a brilliant digital innovation called blockchain technology.

With the form of digital coin, then how easy the financial transactions can be done through the prevailing global cyrptocurrency. no more physical banknotes that are old red, purple or green.

The question: then where are the other bitcoin or cyrptocurrency values ​​agreed?

Again, gold with bitcoin differs in its thousands of years.

but there is an eternal principle that will never change until 3 thousand years. Namely: either gold or bitcoin, its value will be determined based on the balance of supply and demand. This is the eternal law of economics.

from the demand side, the value of bitcoin or cryptocurreny will be determined to what extent businesspersons are willing to use them. How high is the potential number of global business people who are willing to accept cryptocurreny.

the data shows the total world trade transactions per year is currently around USD 100 trillion (do not know how many zero). What percentage of transactions can cryptocurrency take?

the insane rise of bitcoin in the last 3 years, partly fueled by optimism that Bitcoin will be the best cyrpto, and that they can grab at least 1% of the world's trade value (or equivalent to 1 trillion dollars).

so the first determinant of the value of bitcoin and other cyrptocurrency is as described above: how many potential business people are willing to use digital currencies (and forget about conventional currency).

In addition to the DEMAND aspect, the next decisive element is SUPPLY (Supply).

this is where we then get acquainted with technology genius algorithm called blockchain.

Simply: this blockchain system aims to keep the value of digital currency always transparent; trusted, and absolutely can not be manipulated.

the genius of blockchain, the belief system is built via an intelligent algorithm; and does not need a third party like the Central Bank that is pretentious in controlling and controlling.

In addition to demand, the rise and fall of the bitcoin value will depend on the supply. well here we return to meet the similarities with the gold that was thousands of years ago.

Supply bitcoin increases if there is a "miner" (miner) who can decode complex blockchain algorithms. this is really the same as gold: the supply of gold will increase, if there is a miner that for example find gold in a difficult remote location far away there.

supposing: the supply of gold will increase if there is a miner that finds new gold content; while the bitcoin supply will increase if there is a miner that "finds new bitcoin fields" in the form of a complex algorithm.

that's where the genius of Satori Nakamoto (the inventor of the blockchain technology that has not been discovered by anyone yet).

Nakamoto can create and move the difficulty level of gold exploration and mining, into a "virtual mining" algorithm-shaped blockchain.

through blockchain technology, bitcoin supply will be maintained and can not be played at will.

Thus are two aspects that determine the bitcoin and other cyrptocurreny: how high the demand will be, and how much supply will come.

the value of demand will really depend on the extent to which this cyrptocurrency is widely accepted by the business world.

While the supply value is determined by who is the most superior cyrptocurrency. bitcoin is currently superior, may someday be bulldozed by other more powerful cyrpto currency. The law of innovation will play a role here.

whatever happens, with the technology of blockchain created, cryptocurreny has a dream to be just as great as gold: wherever it is, its value is always the same, and it can be the single currency that unites people all over the world.

but there are other cyrptocurreny advantages over gold: this digital money can be moved in real time only through clicks.

from the description above, cyrptocurreny is actually a radical innovation, and potentially give massive impact on the way we do financial transactions.

Through cryptocurreny, later maybe I can shop in Tokopedia or Indomaret with just a click-click. buy airline tickets, buy shares, buy a car and buy a house all without any old physical money.

in the era of this all-round smartphone, wishful thinking above maybe not something impossible. If the adoption of cryptocurreny is widespread, the impact can be absolutely significant for our entire financial life.