Bitcoin has been around for nearly ten years, and still, the debate rages around the introduction of this revolutionary financial technology and the use of cryptocurrency for mainstream transactional payments and banking.
Why was Bitcoin Created?
The Bitcoin developers proposed that the system would provide a method for electronic transactions that have no trust reliance. The Bitcoin developers decided to move away from the traditional banking framework where digital signatures provide firm ownership control, but which have no prevention for double spending. In 2009, Bitcoin developers Satoshi Nakamoto took a peer-to-peer network using a proof of work to publicly record the transaction history that in turn becomes computationally impractical for dishonest hacking because the “majority of CPU power is controlled by honest nodes.”: Ref - https://nakamotoinstitute.org/static/docs/bitcoin....
"The network is robust in its unstructured simplicity. Nodes work all at once with little coordination. They do not need to be identified since messages are not routed to any particular place and only need to be delivered on a best effort basis. Nodes can leave and re-join the network at will, accepting the proof-of-work chain as proof of what happened while they were gone. They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism". Ref: Bitcoin Whitepaper https://nakamotoinstitute.org/bitcoin/
The Dark Side of Bitcoin: Illegal Activities and Fraud
The value of Bitcoin gets people around the world, asking why crypto-assets like BTC have investment potential. The technology behind Bitcoin has made both exciting and fascinating advancements since 2009 and cryptos (digital currency) provide low-cost payment methods which for people who do not have bank accounts.
One of the more sinister reasons that cryptocurrencies are appealing and what makes them dangerous is that they are decentralised and without need for a central (bank) control and it is this anonymity that makes cryptos one of the best vehicles for money laundering and financing terrorist or illegal drug trafficking.
Bitcoin vs. Banks
Fighting fire with fire is one of the best ways that the banking and traditional finance sector can get behind the technology. The latest innovations behind the crypto asset ecosystem are precisely what will help regulate them. Many large financial corporate institutions around the globe, including the International Monetary Fund, are taking a more informed approach by encouraging the banking sector to adopt not only the crypto technology but also the currency system.
The traditional banking sector has been slow in investing in crypto technology – partly due to the bad press; Bitcoin (and other cryptocurrencies) have had through fraudulent activity. The Mt Gox affair, coupled with the sharp rise and fall in BTC between 2017 and 2018 did nothing to allay the calls of crypto naysayers.
However, there are many who believe that it is the very protocols used in Bitcoin that will be the saving grace for banks and bring about changes to the financial ecosystem that have to happen if there is to remain a viable liquidity to the financial sector given the extraordinary growth being experienced in the crypto asset and exchange markets.
For example, regulatory and supervisory technology that is used in the blockchain both have the power to be the solution:
- DLT (Distributed Ledger Technology) which provides instant global transactions using verified customer information can be applied to government and regulatory bodies to bring standardisation and a more streamline system of control.
- The Artificial Intelligence, cryptography and biometrics used in digital security that identifies suspicious transactions in the cryptocurrency ecosystem are precisely the methods being called for by lobbyists and regulators such as the SEC (United States Securities and Exchange Commission). By applying the same laws to cryptocurrency as those attached to standard securities to bring about more transparency and lower risks to consumers. Adoption of these systems will bring about more liquidity in the markets bringing about sound investment platforms for more mainstream users.
Bitcoin uses vast amounts of energy, and one report in 2018 estimates that the BTC energy consumption increases by 20% on a regular, monthly basis. MTCORE is designed to be a "green cryptocurrency."
By abandoning the proof-of-work (BTC mining strategy), MTCORE uses a more competitive proof of stake that requires different participation and more democratic voting protocol. This is one of the most innovative crypto advantages and will take the world financial sector to the next level because it would break from the banking sector weakness to bring about a real crypto economy for mainstream customers.