The Transparency of Bitcoin - dummies

The Transparency of Bitcoin

By Prypto

The biggest advantage presented by bitcoin — or to be more precise, the underlying blockchain technology — comes in the form of creating a completely transparent trading system.

For those individuals and businesses who may want to avoid transparency — such as, for instance, in the non-declaration of various taxes, the transparency of bitcoin may be an issue. However, not only does the blockchain act as a public ledger for every financial transaction on the bitcoin network, it can also be adapted to suit other needs such as file storage, property ownership, trading of assets, or even verifying the manufacturing process of medicine. The possibilities are really only limited to the bounds of human ingenuity.

The major focus of bitcoin and blockchain technology has always been in terms of finances. And although bitcoin lets you send money to anyone else in the world at little to no cost — and gives you the ability to track this payment to the recipient — that may not be ideal for everyone. This is why it is so important to keep in mind that bitcoin is much more than a payment method.

For example, you can put the ownership of your car on the blockchain and have it time-stamped by the network when the block associated with your data is confirmed. If you ever sell that car, you can digitally transfer its ownership by sending it to anyone else on the bitcoin blockchain. And once that transfer has completed and confirmed on the network, the new owner can officially lay claim to that car. No paperwork needed — just the exchange of keys and the sending of the digital asset which represents the car.

Not every consumer wants to see his or her financial details broadcasted on a public ledger for anyone to see. That is completely understandable, but you have to keep in mind that everyone is pseudonymous on the bitcoin network — there’s no reason to think that anyone else will find out who are you if you don’t want them to. Your wallet address is what links the transaction, but there is no name or physical location attached to the address itself.

That being said, the current financial infrastructure offers no oversight as to how bitcoin’s stored value is being used. The funds you keep in a savings account are there for you to see, represented by a list of digits in terms of what the bank owes you. But everyone knows banks are using your money to create more money, though you have no idea how that is happening. All you know is that banks are playing with your money, and if they lose too much of it, they need to be bailed out by the government. Or to be more precise: Everyday consumers need to bail out the banks because they lost the money we let them safeguard for us.

The transparent nature of bitcoin and blockchain technology is beneficial in so many ways to so many people. With more and more companies and developers focusing on additional uses for the blockchain outside of the financial space, you never know what might be in store next. And if you have a good idea, why not join in, start using bitcoin, and see where it leads?