What is bitcoin
Bitcoin is a digital currency. And like other more traditional currencies, it has a value. And that value is determined by supply and demand. As the demand for Bitcoins increases, as requests for Bitcoin purchases increase, the price rises. As demand decreases, the price drops as there are more people with Bitcoins to sell them than there are to purchase them. So just like other currencies and commodities, Bitcoin's value is very much affected by internal and external conditions that drive its worth.
Let's talk about Bitcoin supply for a moment.
There is a finite amount of Bitcoins. As new buyers make purchase requests, the term is mining, so the coins are mined, and new Bitcoins are created. Mining creates new transactions in the Bitcoin ledger, the Blockchain. [On Jun 22, 2022, it was noted that 19 million Bitcoins were in circulation.] Bitcoin has a permanent cap of 21 million, so there can never be more than that. So at its current circulation, around 90% of the cap has been consumed. So if all Bitcoins in circulation are currently owned, new purchases create new Bitcoins, provided the number of Bitcoins never exceeds the cap of 21 million. So it's clear that the limited number of Bitcoins means demand will drive its price.
Bitcoin is in a relatively volatile market. And we see that just by looking at how its price changes over time. But it's a relatively small market, which helps stabilize things a bit for the simple reason that more players lead to a greater chance of volatility. Likewise, the limited number of available Bitcoins helps to buffer some of Bitcoin's volatility. Though pricing can be affected by many things, some of these are apparent elements that affect any market, like scepticism and fear.
The Bitcoin Community
Bitcoin has grown steadily since its inception, and with it is the size of the community advocating for it. The community itself starts with these two sites, The Community Portal and The Wiki Portal. [https://Bitcoin.org/en/community and https://en.Bitcoin.it/wiki/Bitcoin_Wiki:Community_portal URLs.] IRC Channels include #Bitcoin, #Bitcoin-dev, #Bitcoin-otc, or over the counter trading, #Bitcoin-market, and #Bitcoin-mining.
There are many forums, and here are a few, BitcoinTalk Forum, Reddit's Bitcoin Community, and Bitcoin StackExchange for Q&A. And on social networks, there's the Google+ Bitcoin Community and communities on Twitter and Facebook. The community's been very busy, too, with all sorts of events happening offline.
There are also several BitCoin regions and community forums. [The Bitcoin regions are Bitcoin Austria, Bitcoin Center Korea, Bitcoin Italia, Bitcoin Philippine Community, BTCsec.com, BTCsec.com (Russian), Canada's Bitcoin Community, Israeli Bitcoin Community Forum, Polish Bitcoin Community Forum, and Russian Bitcoin Community Forum.] Ranging from Austria to the Philippines to Israel, Poland, and Russia. And there are 45 different community forums held in 31 countries. There's also a tremendous amount of resources for people involved in BitCoin. Or planning to become involved, starting with a number of publications, news sites, and blogs. [The URLs for publications are https://godistributed.com/, https://Bitcoinmagazine.com/, The URLs for news are https://news.Bitcoin.com/ and https://twitter.com/TopNewsBitcoin/lists/Bitcoin. The URL for the blog is https://en.Bitcoin.it/wiki/Category:Blogs. The "Blogs" in the mentioned URL can be replaced with the name of the particular blog to be accessed. The blogs are Bitcoin Economy, Bitcoin Magazine, Bitcoin Market Analysis, Bitcoin Media, Bitcoin Miner, Bitcoin Money, Bitcoin News, Bitcoin News Magazine, Bitcoin Report, and Bitcoin Weekly.] Keep in mind that these are only some of the available resources for BitCoin enthusiasts. And there are new ones coming online all the time.
For example, currencies are typically based on a primary unit, a dollar or Euro. And then multiplied or subdivided into units. Because different commodities have different values, a pack of gum might cost $0.90, for which you'd use a few quarters, a dime, and a nickel to pay. And using different units to comprise a monetary unit is more than convenient; it's a necessity. Bitcoin is no different. We talk in terms of single Bitcoins with the denominator BTC.
In the same way, it's impractical to price goods and services in purely integer values. Just dollars or yen, for example. You need to be able to divvy up Bitcoins so you can actually use them to make purchases. With that in mind, the creators of Bitcoin decided to assign a single Bitcoin as having a value of 10 to the 8th power, or 100 million units. It's quite an elegant solution because it provides a very high degree of precision over Bitcoin units. And it bucks the familiar metaphor of integer values that we usually use with hard currency. This was smart because there was no way of knowing exactly how valuable Bitcoin would be.
And rather than having hyperinflation scenarios where you were buying a pizza with a billion Bitcoin, the total number of Bitcoins in circulation has been capped at 21 million. And a high degree of subunits is favoured. The method for subdividing Bitcoins was adopted from the International System of Units. [International System of Units is also called Système International d'Unités.] Which defines the modern metric system, of which seven basic units are listed here. [The current metric system was established in 1960. The seven basic metric units are meter, kilogram, second, ampere, kelvin, candela, and mole.] But these aren't the units used by Bitcoin. Let's look at how Bitcoin uses the International System of Units. The Bitcoin system of units uses divisions of 10, just like the metric system. 10 is the number of choices because the Arabic numbering system is based on 10. And that's what the world uses to count. It's easy to multiply and divide by 10. And if you're familiar with the metric system, you know how easy it is to work with.
Examples of standard Bitcoin units are the deciBitcoin, which is 1/10. The centiBitcoin, 1/100. The milliBitcoin, 1/1,000. And microBitcoins often referred to as bits, are worth 1/1,000,000 of a Bitcoin. But there are also other systems used to subdivide Bitcoins. Tonal Bitcoin uses the tonal numbering system, which is a base 16 system and is not new. It dates back to the 1850s and has been used as an alternative to the metric system, the base ten system. [The Tonal Bitcoin is not new to Bitcoin, it dates back to 1859.] The tonal system provides infinite binary division. And I won't get into the weeds by trying to explain its intricacies. Just say that people like the tonal design because it provides very granular and precise values of measurement. And there's also the Satoshi system, which is currently the smallest unit of Bitcoin available. It equals one hundred millionth of a Bitcoin. And it was named after the person or persons who invented Bitcoin, known to the world as Satoshi Nakamoto. The Bitcoin blockchain uses satoshis; internally, every amount is measured in Satoshis before being displayed in larger units.
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It is difficult to say whether or not blockchain technology can replace chartered accountants. The role of a chartered accountant is far more complex than simply maintaining records on a blockchain. However, with the increasing popularity of blockchain technology and its many potential applications, the role of a chartered accountant will likely change in the coming years.
Suppose you are thinking of pursuing a career in accounting. In that case, it is important to stay up-to-date with developments in blockchain technology and how they might affect the accounting profession.
Alternatively, suppose you are already a chartered accountant. In that case, it may be worth considering specializing in blockchain technology and learning how to use this new technology for businesses.
Don't worry; you're not alone! Many people feel like they need to be technical to work in the blockchain space. But that's not the case at all. There are a lot of great opportunities for non-technical people in the blockchain industry.
Here are a few tips on how to get started:
1. Learn about cryptocurrencies and blockchain technology so that you are familiar with concepts
2. Get involved in the community. There are a lot of great forums and chat rooms where you can learn more about blockchain and meet other people working in the industry.
3. Look for opportunities to work with or collaborate with blockchain startups and companies.
4. Find a job or internship in the blockchain industry. There are many companies that are looking for people with experience in cryptocurrency and blockchain technology, so this could be a great way to get started in this field.
It's not news that The Institute of Chartered Accountants of India (ICAI) is planning to adopt blockchain technology in auditing. The decision was announced by ICAI chairman Nilesh Vikamsey. He stated that the technology would help reduce the time taken for auditing processes and improve their accuracy.
The current Institute of Chartered Accountants of India (ICAI) president Prafulla Kumar Mitra, says blockchain technology will be adopted in auditing to maintain transparency and reduce fraudulent activities.
"The adoption of blockchain technology would help reduce fake transactions and promote transparency," Mitra said.
He added that ICAI has recently launched an Audit Quality Maturity Model, which will help chartered accountants assess and improve the quality of their audits. The model considers factors such as risk management, use of technology, data analytics, and auditing standards. Mitra believes that blockchain technology will play a critical role in maintaining audit quality.
While there are many potential audit-IT points for blockchain technology, some of the key considerations include data governance and controls, identity management, and cryptography.
Data governance and controls are essential for ensuring that the data stored on a blockchain is accurate and can be relied upon. Identity management is also critical for ensuring that only authorized users can access the blockchain network. And cryptography is necessary to provide security and integrity to the data stored on the blockchain.
The blockchain can be used to prevent fraud by creating an immutable, public ledger of transactions. This ledger can be used to verify the legitimacy of transactions and to track the movement of funds. Additionally, the blockchain can create smart contracts that automatically execute when certain conditions are met. This can help reduce fraud risk by ensuring that agreements are carried out as intended.
While the term "ledger" might conjure up images of a physical book or piece of paper, blockchain is purely digital in the context of blockchain. Transactions are added to the ledger as so-called "blocks," and each block is chained to the previous one using cryptography.
This forms the basis for how blockchain works - each transaction is verified and recorded.
In the context of blockchain, a ledger is simply a digital record of all transactions that have taken place on the blockchain. This could be seen as analogous to a traditional bank ledger, which records all financial transactions that take place within the bank.
In layman finance terms, a blockchain is a digital ledger of all cryptocurrency transactions. Unlike traditional ledgers, which are maintained by central authorities, blockchains are distributed across a network of computers. This decentralized structure allows blockchains to be more secure and resistant to tampering.
Transactional data is anchored to the chain as blocks (i.e. each transaction includes a timestamp and transaction data). Hovering over any block will reveal comprehensive information about the transaction – who was involved, what occurred and where. When new transactions are made, chains fork into longer sequences to form a blockchain.
Blockchain technology was first proposed in 1991 by a group of researchers who wanted to create a system that would allow electronic documents to be timestamp-verified. However, it wasn’t until Bitcoin launched in 2009 that blockchain finally found its first real-world application.
No one person or organization created blockchain technology. Rather, it was developed through the collaborative efforts of a community of researchers and developers. While the exact origins of blockchain are difficult to pinpoint, the first successful implementation of Blockchain was created by Satoshi Nakamoto in 2009 as part of the cryptocurrency Bitcoin. Since then, numerous other blockchain-based applications have been developed, each with unique features and use cases.
A blockchain currency is a digital asset that is created through the process of mining and uses a blockchain to track its ownership. Bitcoin, Ethereum, and Litecoin are all examples of blockchain currencies.
Blockchain currencies are decentralized, not subject to government or financial institution control. They are also secure and transparent, meaning that anyone can view the balances and transactions of any account on the blockchain. This makes them ideal for online transactions and makes them perfect for use in digital cryptocurrencies.
A blockchain wallet is a digital wallet that allows you to store, send, and receive cryptocurrencies like Bitcoin. The blockchain wallet software connects to the blockchain network to allow you to manage your cryptocurrency. It's important to note that a blockchain wallet is not the same as a cryptocurrency exchange. A cryptocurrency exchange is an online platform where you can buy and sell cryptocurrencies.
There are many blockchains, but the most popular ones are Bitcoin, Ethereum, and Litecoin. Each blockchain has its unique features and purposes. For example, Bitcoin is mainly used for digital payments, Ethereum is used for smart contracts and decentralized applications, and Litecoin is similar to Bitcoin but has faster transaction speeds.
A smart contract is a self-executing contract with the terms of the agreement between buyer and seller written into code. The code is stored on a blockchain, which is a public ledger. When both parties agree to the contract terms, the code is executed, and the transaction is completed automatically.
A smart contract eliminates the need for a third party to act as an intermediary in transactions. This can reduce costs and increase efficiency by streamlining escrow and title insurance processes. Additionally, because data on a blockchain is decentralized and tamper-proof, it can be used to securely store information about contracts or other sensitive data.