The valuation of Bitcoin has been a topsy-turvy affair since its inception in 2009. The explanations regarding the ledgers and how the currency is mined has been for all practical purposes the domain of experts in the field of cryptocurrencies. However, the rising popularity of Bitcoin has made it necessary for many to seek a greater understanding of the workings of Bitcoin.
PSI-Pay has taken note of the fact that the complexities of the topic at hand have precipitated much confusion on the part of media sources attempting to explain Bitcoin technology as they often become confused with another popular technology known as electronic money.
PSI-Pay explains that electronic money and cryptocurrency actually depend on different types of financial institutions to function and operate on a completely different business model. The explanation is provided to highlight the most vital differences between the two technologies.
Electric money is a platform that provides conventional money to be electronically stored. This money is backed by fiat money and is usually regulated by a central bank. Users are required to use services like ecoPayz to create electronic accounts. PSI-Pay explains that it is important to remember that despite the fact electronic money is used to facilitate money transfers online that it is linked to money in the ‘real’ world.
Electronic money’s most common use is through online applications but consumers can also use prepaid debit cards to obtain physical money if linked to an account.
Bitcoin, on the other hand, operates by facilitating peer to peer exchanges of money. There is no need for a central banking authority to oversee Bitcoin transactions as these actions are authenticated by computer networks.
To ensure that Bitcoin remains unaffected by inflation a limit of 21 million coins has been put in place. The value of these coins rises and fall with demand for the coins and the trust of the public that is placed in the currency.
Bitcoin is not printed like typical fiat currencies but is instead mined by volunteers using computers across the globe.
PSI-Pay is an alternative banking company that is based in the UK and aids companies with the management of financial affairs. Businesses that use the services of PSI-Pay are benefitted by being provided with sponsorship payment solutions from an institution that is regulated by the FCA. PSI-Pay is licensed to issue debit cards and other financial products for 44 different currencies in more than 170 countries. PSI-Pay has also been a Principled Member of Mastercard since 2009.