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This means that in projects where developer draw is high, diverse contributors improve the underlying system, building and testing client applications on a broad base of hardware and software platforms. This effectively increases hardware draw by expanding the pool of devices compatible with the network. Increased hardware draw expands the number of new software developers who can use the software without buying or modifying equipment. This virtuous cycle begins with developer draw.

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Satoshi Nakamoto originally created Bitcoin as an alternative, decentralized payment method. Unlike international bank transfers, it was low-cost and almost instantaneous.

An added advantage for merchants (less so for users) was that it was irreversible, removing the threat of expensive charge-backs. In return, consumers benefit from a wider selection of merchants both domestic and international without worrying about exchange fees. Moreover, the details of their transactions are encrypted which protects their personal data.

The improvement in domestic payment methods and the rapid development of alternative (non-cryptocurrency) forms of international transfers, however, has reduced bitcoin’s advantage in this area, especially given its increasing fees and frequent network bottlenecks.
Furthermore, the increasing oversight and regulation to prevent money laundering and illegal transactions have restricted the cryptocurrency’s use for privacy reasons.

In some parts of the world, bitcoin is still a more efficient and cheaper way to transfer money across borders, and several remittance startups make use of this feature. Last year, Coinbase added cross-border transfers and custody services for high-volume clients in Asia and Europe. A recent partnership between crypto exchange Bitex and Uruguay-based banking service provider Bantotal now facilitates direct bitcoin payments across 60 banks in Latin America.

Bitcoin’s cost and speed advantages, though, are being eroded as traditional channels improve and the network’s fees continue to increase and availability remains a problem in many countries.

Also, a number of large and small retailers accept the cryptocurrency as a form of payment, although reports suggest that demand for this function is not high.

And many individuals feel more comfortable holding a part of their wealth in securely-stored bitcoin wallets, where a central authority cannot block access or take a cut. Since the coronavirus lockdown began in March, we’ve witnessed a surge in demand for bitcoin wallets as users search for alternative self-custody solutions. The pandemic has also seemed to accelerate the widespread adoption of blockchain technology, as more and more businesses, payments companies and e-commerce marketplaces turn to digital currencies, especially stablecoins.

Recently bitcoin seems to have assumed the role of investment asset, as traders, institutional investors and small savers have woken up to the potential gains from price appreciation.

According to some sources, bitcoin is increasingly being used for money laundering. But blockchain analytics startups and crypto tracing firms are rolling out new tools to help exchanges comply with anti-money laundering standards. And anyway, bitcoin is not, as is commonly believed, a good vehicle for money laundering, extorsion or terrorism financing, since it is both traceable and transparent – as a spate of recent arrests can attest.



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