Bitcoin, Ethereum & Co- why we believe in blockchain
Note: This is an editorial article expressing opinions. It is not advertising payment services or currencies, or investment advice.
Information: You can pay in our e-boutique with two digital currencies, BTC and ETH. Read here how:
Why we think that Bitcoin and Ethereum are here to stay
The value development of Bitcoin is amazing: Bitcoin (BTC) December 2014:$ 320,19. Bitcoin December 2021: $ 46387,98. Bitcoin December 2022: $ 16547,50. The all-time high was $ 67589,77, and the all-time low was $ 0,05 on July 18, 2010.
So, it is a highly volatile currency. But we don't think the volatility should disqualify BTC from trading with goods.
"Globally, we may see the adoption of bitcoin outpace the dollar," said Neil Bergquist, CEO, and co-founder at the digital currency exchange Coinme. "It is entirely possible that bitcoin will be a widely accepted form of payment," he added.
Over 190 Million users worldwide hold Bitcoin, according to Blockchain Statistics 2023.
Ahead of the game with digital currencies
The currency has several unique advantages that weigh heavily on Fiat money. First, all (financially) literate or illiterate people can similarly access Bitcoin with a mobile network and a power grid and decide how much they invest. Second, no banks are involved, and it takes a shortcut in administration, making it very efficient. It is even so helpful that banks use stablecoins to make large transactions. So, it is a great equalizer and a social and economic opportunity for many. Third, it is an alternative currency that is always and everywhere available for everyone, given the mentioned conditions.
Finally, the deflationary nature of BTC is urgently needed in times of money-printing and inflation. Conversely, there will be a fixed amount of Bitcoin in the future. After 2140, no more BTC will be mined, and the next halving event is in 2024. Logically, following the law of scarcity, the perception of its value will increase significantly. That is even more true as adverse economic circumstances and monetary policy influence private wealth accumulation.
It is that Bitcoin has some similarities with diamonds in former centuries.
Like Bitcoin is now traded by networks, communities formerly traded diamonds. It was for them valuable, just as money and the diamond community decided the diamonds' daily value/ exchange rate.
That network aspect plays a significant role in the accurate valuation of BTC and ETH, as the volume and number of transaction requests influence the price.
The more users adapt digital currencies, the more valuable Bitcoin and Ethereum might become.
The Advantages of Blockchain in the Diamond Trade
The diamond trade is a multi-billion dollar industry, with diamonds being one of the most valuable and sought-after luxury goods in the world. However, the industry has faced several challenges, including issues with transparency, fraud, and supply chain management. In recent years, blockchain technology and cryptocurrency have emerged as potential solutions to these problems, offering several advantages to the diamond trade.
Transparency and Traceability: One of the biggest advantages of blockchain technology is its ability to provide transparency and traceability. By using blockchain, each diamond can be tracked and traced from the mine to the final sale, creating a transparent and immutable record of its journey. This helps to prevent fraud and ensures that customers can have confidence in the authenticity and quality of the diamonds they purchase.
Supply Chain Management: Another advantage of blockchain technology is its ability to improve supply chain management. Blockchain allows for real-time tracking of diamonds and helps to eliminate the need for intermediaries, making the supply chain more efficient and cost-effective. This can help to reduce costs and improve the overall competitiveness of the diamond trade.
There have been many environmental concerns due to the baffling energy use of the Bitcoin Blockchain network.
The Ethereum 2.0 network, on the other hand, has overcome the main scalability problem with Bitcoin by introducing some development updates. The network's switch to a proof-of-stake (PoS) from a proof-of-work (PoW) consensus method akin to Bitcoin's has been perhaps one of the most crucial energy-saving upgrades.
The Merge, a successful update that converted Ethereum from PoW to PoS, successfully combined the old execution layer and its new PoS consensus layer. As a result, the Merge has solved one of the most persistent problems with PoW-based blockchain systems by reducing Ethereum's energy consumption by 99.95%. In conclusion, our preferred alternative is Ethereum that is environmental-friendly.
The future: Hedging risk from all sides
There are more advantages of Bitcoin and Ethereum. Ethereum delivers the gold standard of smart contracts which allows automatic execution of contracts or protocols. Also, the diamond industry is working on traceability and transparency, and financial services hedge risks with compliance.
Ideally, in the future, all sides come together, like blockchain-supported compliance, traceability of the mining enabled by blockchain, and payments made by digital currencies will create a multi-sided system where risks are hedged and transactions can be safer than now.
That is why we believe in the future of blockchain-based digital currencies.
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Do you have questions about payments with digital currencies? Please, always contact our shop before making payments in cryptocurrencies to make sure that the transaction will run smoothly.