The term bitcoin has become very familiar to us in the last few months. Recently, Bangladesh Bank has also issued a circular warning about bitcoin trading. But what is Bitcoin? Many people have no clear idea about this. No such writing was seen in Bengali about this. This article is written to explain Bitcoin and its related cryptocurrency and blockchain issues in Bengali.
Bitcoin is a type of cryptocurrency. Money, dollars, yen, etc. can be exchanged by hand, but not in the case of token currency. Symbolic currency exists only in the form of information in the world of the Internet. In addition to Bitcoin, there are thousands of such token currencies. Among them well known are Etherium, Litcoin, Ripple, Altcoin etc. However, the predecessor and most known of all is Bitcoin.
Bitcoin is a kind of information. For example, a person named 'A' has 100 bitcoins, this is information. What is the source of this information or how can a person named 'A' own 100 bitcoins? To explain this, we need to look at the beginning of Bitcoin. The father of Bitcoin, Satoshi Nakamoto, is a pseudonym whose real identity is not yet known. He created Bitcoin in 2009. The core technology of Bitcoin is called blockchain. In this technology, bitcoin exchange information has to be checked and sorted. This verification-sorting creates an irreversible block of information. It's a lot like building brick walls. Each block is like a brick, once laid it can no longer be broken. As new bricks have to be laid, new blocks of bitcoin are built on the old bricks based on the old blocks. Satashi Nakamoto created the first block and earned 50 bitcoins in return. This is how Bitcoin was created. The key to Bitcoin is that any exchange has to go through a very complex verification process. Through this verification-selection process, one by one, immutable blocks of information are created. This screening process is called mining and those who do the work are called miners. In Bengali it can be said, digger and digger. Bitcoin is the reward for contributing to verification and blockchain. This is why bitcoin mining is compared to digging out mountains and extracting gold. Satoshi Nakamoto wrote his program in such a way that the creation of a maximum of 21 million or 21 million bitcoins could be mined and that would be by 2140. Other symbolic coins are also mined in this way through block creation and verification. Blockchain is the core technology of all.
Coming back to the previous question, a person named ‘A’ can get ownership of Bitcoin in two ways. One is bitcoin mining and the other is buying from others or as a gift. But where is the relationship of the currency with Bitcoin? The main function of currency is to make the exchange of goods possible. Acceptability is related to the exchangeability of currency. A 500 taka or 100 dollar note has no real value. We accept them as currency, so they are valuable and exchangeable. The same is true of coinage. Imagine once upon a time people used cowrie as a currency. There is no difference between a symbolic coin, a gold coin or a paper coin.
Proponents of blockchain technology say that token exchange will make commodity exchanges much easier. For example, someone wants to export something from Bangladesh to Japan. Export money is transacted through banks and other financial institutions, which charge hefty fees. There is no need to pay this fee if you use blockchain technology, so the cost will be much less. Similarly, the cost of using tokens to send remittances from one country to another will be much lower.
This means that other symbolic currencies, including Bitcoin, can easily take the place of conventional currencies, and this is likely to happen in the near future. There is absolutely no doubt about the significance of blockchain technology. But should tokens be considered investable assets like stocks, gold or diamonds? Many are doing just that and benefiting from it. A year ago, a bitcoin cost about হাজার 1,000, now it costs about দাম 14,000. This means that many people have become rich overnight by investing in Bitcoin. Should the rest of us do the same now?
I think Bitcoin and other cryptocurrencies should not be considered as investments at all. One or two may benefit from it but most will lose capital. What is happening with the rise of Bitcoin is like a hollow balloon. Just as a balloon bursts or collapses, so does Bitcoin. But why the consequences? To talk about this we have to go back to a fundamental question of the economy. The question is, how is the value of a thing determined? For example, gold is a precious metal to us, but why? The price of any thing is determined by a combination of two things. One is the ready price, i.e. how much it costs to make a thing. The cost of mining gold, diamonds, etc. is very high, as reflected in the selling price. Similarly, the cost of mining Bitcoin is currently very high. Bitcoin mining requires a very powerful computer, its power consumption is unusual. So the mining value of bitcoin is excessive. In the case of other tokens, the cost is slightly lower. This is one of the reasons why Bitcoin is so expensive.
The second thing that determines the price is how much people are willing to pay for the product. For example, we consider gold as a rare and attractive metal. There is no substitute for gold and for this we are willing to pay a lot of price. There is no shortage of alternatives to Bitcoin or any other cryptocurrency. Since token coins can easily replace each other, they are equally useful in terms of usage. Bitcoin, on the other hand, has a high cost of mining. So later currencies are much more affordable than Bitcoin. This means that they will take the place of Bitcoin. But they will be able to occupy this place only for a short time. Because the next token coins will be more affordable. Much like buying a computer, the later you buy, the more advanced the technology will be.
The state is the supplier of money in terms of money, dollars etc. So as many states as there are in the world, there are also a number of currencies nearby. No free entry of economic terminology is possible in the conventional currency market. It does not apply to token currency. As long as there is gain in token currency, new currency will enter the token market. So the gain of any symbolic currency will be short term, not long term profit.
Many say that bitcoin will be as rare as gold. Because a maximum of 21 million bitcoins can be created. At the root of this idea is a childish confusion. They do not realize that there is a limit to the divisibility and portability of common resources, which is not the case with coinage. Gold can be broken down into smaller pieces but cannot be carried. For example, it is not possible for us to carry a gold particle from one place to another by hand. Again some resources are portable but indivisible. For example, we can divide 1 taka into maximum 100 parts. But 1 paisa can no longer be divided. The same is true of shares. It is not possible to divide two halves by dividing one share. But coinage is simultaneously portable and divisible. Currently it is possible for one person to own at least 0.000000001 bitcoins. It is possible to make it smaller by writing a code. Thinking of Bitcoin as a limited asset is therefore just a delusion.
Another problem with token currency is the necessity of mining. As I said earlier, the exchange of tokens has to go through some complicated verification and selection process. The power consumption of this process is very high. Those who do so receive incentive money as an incentive, which is currently quite lucrative, excluding the cost of electricity and equipment. If the screening process is not profitable, they will no longer screen. So it is impossible to exchange tokens without the work. This means that a person can own 1 lakh bitcoins but he cannot do anything in return.
In view of the above discussion, I therefore assume that the market value of Bitcoin and other token currencies will be zero in the future. In the short term, some people have benefited or will benefit by investing in it. But long-term investment is inappropriate as the symbolic currency is considered an asset.
We should discuss a little more about blockchain, the main technology of token currency. Related to this, the future role of Bangladesh Bank and various financial institutions in Bangladesh and the direction to be done. Blockchain is a very important technology. It has been said that the blockchain has changed how people can trust or reassure each other. At present, trust and reassurance in financial transactions comes from intermediary financial institutions. Through blockchain, reliable exchange is possible at low cost and in less time without the role of intermediary financial institution. Therefore, blockchain is expected to reduce the role of financial institutions in the future. Just as the Internet has made the exchange of information and news much easier, so the blockchain will make the exchange of money easier. Therefore, in order to survive in the future, it may be necessary to bring about a major change in the activities of financial institutions and the central bank. It will not be possible to stop this storm through just one or two circulars. Unlike camels, there will be no benefit from humming here. Does the catastrophe stop when you are blind?
Therefore, Bangladesh Bank and other private banks should now form a symbolic currency mining cell through a super computer to get a full idea of all aspects of blockchain technology. Super computers, mining equipment and temperature control systems will cost about Rs 50 lakh. There is no need to bring experts from abroad to do the job, there is no need to travel abroad. This can be done by recruiting new graduates from public and private universities in Bangladesh.
Blockchain technology is now in its infancy. No one understood what would happen in the future when the Internet was launched or in the nineties. But today, Facebook, YouTube, Amazon, Google, Wikipedia, smartphones, etc. have revolutionized our lives. Prominent economists, including Suzanne Aithi, have speculated that the same will happen with blockchain.
New technologies such as artificial intelligence, machine learning and blockchain have already begun to transform the functioning of financial institutions in the developed world. A country like Bangladesh will start to feel its impact in the next 5-10 years. We do not know what will happen but we are sure that something big will happen. Bangladesh Bank and private financial institutions should start investing in these areas from now on. It is important to prepare now and change the way things are done in order to survive in the future.
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Very nice article.. Cryptocurrency & Blockchain is very popular in bd