Bitcoin is everywhere, but what's the big deal? Bitcoin solves the biggest problem with digital money. Read on to see how.
1 min read
You’ve heard of Bitcoin. It’s been featured endlessly by every news outlet and online publication. But what is it really? It’s more than just digital money (we already have a lot of that). So what’s everyone so worked up about?
The answer is actually pretty simple: Bitcoin is an elegant solution to a complicated (and expensive) problem. Let’s take a look at the traditional problem of digital currency and how bitcoin solves it.
One of the most important properties of money (that we don’t often consider) is singular-ownership. In order for money to work as a system of exchange, only one person can own—and therefore use–a piece of money at any given time. In other words, you can’t spend a dollar and keep that same dollar. It may seem like an obvious observation, but it’s actually a fairly complicated problem–one that cryptocurrencies are designed to solve.
The singular ownership requirement of money isn’t a problem with physical money. Physical money simply can’t be in more than one place at a time. You can keep that dollar in your pocket or you can spend it on a bag of gummy bears. But you can’t do both.
Digital money is a whole different story. There’s nothing that makes digital money intrinsically unique. Since digital money is, at its most basic level, represented by a string of numbers, it’s very easy to create an exact copy. That’s a problem. For comparison, imagine that anyone could feed a $100 bill into a scanner and print out an unlimited number of perfect replicas. If that kind of copying is allowed at any kind of scale, the money quickly becomes useless.
When you spend digital money, you can’t simply transfer your money to the vendor or retailer. The seller doesn’t know you and has no reason to trust you. So you have to get intermediaries involved to make the transaction happen. One or more financial institutions (usually a bank and a credit company like Visa) act as intermediaries to guarantee your transaction and another intermediary does the payment processing. At best, the process takes a few days and most of the money eventually makes it to the seller (never all the money since all the intermediaries take little cuts along the way). At worst, the money takes weeks to transfer (if it gets there at all) and intermediaries charge hefty fees. It works, but it’s very inefficient.
The other solution is cryptocurrency. With Bitcoin and other blockchain-based cryptocurrencies the process is much simpler—and nearly instantaneous. When you complete a transaction with Bitcoin, the payment simply transfers from you to the seller, no intermediaries required.
Instead, the Bitcoin blockchain verifies then creates a permanent record of the details of the transaction (while still allowing you to keep your identity safely anonymous). Due to the way transactions are recorded on the blockchain and the instantaneous nature of the transaction, it’s easy to ensure that no two people own the same portion of a bitcoin. Nearly as important, the blockchain is entirely automated, making the transaction cost negligible to non-existent.
As revolutionary as Bitcoin is, it’s only one of many applications of blockchain technology. Blockchain has the potential to revolutionize nearly every industry, from retail to accounting and tax. Download our free blockchain ebook to learn exactly what blockchain is and why you can’t afford to ignore it.
Explore more of our recent Articles, User Stories, and Ebooks.
2 min read
3 min read
Canopy takes the headaches out of client management by offering a way to keep client info organized.
I love how easy it is to setup a new client in this software. Once set up, it's one click to get IRS transcripts downloaded for my review. This saves me at least an hour each week in comparison to the software I used to use.
This makes workflow for tax resolution manageable. This business is a bunch of hurry up and wait. This system helps to refresh my memory while transitioning to different clients.
The ability to securely share documents with clients as well as complete POAs from client contact data already in Canopy. The ability to route workflow between team members with color coded statuses allows us to work efficiently.
Cool features, outstanding customer service, constantly updating to make it better. I love that I can upload files easily to a secure client portal and we don't have to email files anymore. Absolutely can't imagine not having this software.
It's safe and secure. Clients are able to upload documents and the documents are saved their portal which as a result, keeps us better organized. The task feature keeps us organized and we know exactly the status of each client.
Submit this form, and we will be in touch soon to give you a custom demo.
Set a time for one of our product specialists to give you a guided tour practice.