Gamza Khanzadayev
Ripple’s David Schwartz highlights Bitcoin’s hidden beauty
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Bitcoin (BTC), the first and largest cryptocurrency, is often discussed among financial experts and enthusiasts. Recently, amid ongoing discussions about BTC becoming the US reserve asset, Ripple Chief Technology Officer David Schwartz highlighted some of the unique advantages of BTC that are not always fully understood.
The conversation began with a question about whether the Federal Reserve should consider holding Bitcoin as a reserve asset. To be on the safe side, Senator Cynthia Lummis has introduced a bill that calls for the creation of a strategic BTC reserve in the United States.
The aim is to reduce the national debt by purchasing 1 million BTC over a five-year period, with the purchased BTC to be held for a minimum of 20 years.
However, there are concerns about Bitcoin’s ability to scale to a larger user base, especially as transaction costs rise as demand increases, raising doubts about its practicality as an everyday currency.
The beauty of Bitcoin
Schwartz responded by explaining the flexibility of BTC’s transaction processing. He noted that users can conduct transactions directly on the blockchain or in other ways that suit their needs. Blockchain is a secure distributed ledger that guarantees at least a basic level of trust and transparency.
But in some situations, Schwartz said, a centralized service could process transactions more efficiently without using a blockchain, striking a balance between security and cost-effectiveness.
This dual function of using blockchain for secure record-keeping while enabling more efficient transactions over centralized systems demonstrates the adaptability of cryptocurrencies. Schwartz noted that blockchain provides a minimum standard of quality while giving users the freedom to choose the method that best suits their needs.
About the Author
Gamza Khanzadayev
Financial analyst, trader and cryptocurrency enthusiast.
Gamza graduated with a degree in Finance and Credit, specialising in Securities and Derivatives, and subsequently completed a Masters in Banking and Asset Management.
He covers economics and fintech topics and wants to educate more people about cryptocurrency and blockchain.
