In recent years, cryptocurrency has become the hot word on every investor’s mind, with Bitcoin arguably the most well-known cryptocurrency today. You’ve probably heard all the buzz about it, whether you’re an aspiring investor or not! To the general masses, the world of cryptocurrency might seem foreign and daunting –– which can easily put interested parties off. If you’re interested in investing but afraid of stepping into the cryptocurrency market, we’ve got you covered! In this article, you’ll get a breakdown of what exactly a Bitcoin is, what it does, and reasons for you to consider investing in it today.
What Is Bitcoin?
Bitcoin was first invented in 2009, where its creator envisioned Bitcoin to be a mode of daily financial transactions that people can use on a day-to-day basis. The larger idea behind creating a decentralized cryptocurrency is to remove the centralized power that government agencies hold with money and allow for transactions to be processed quicker and easier.
BItcoin’s main selling point is its decentralized nature –– the fact that it isn’t, and can’t be, controlled or regulated by a central authority, such as banks, economies, and governments. Bitcoin payments are made through a private network of computers that are linked to a larger shared ledger. Each Bitcoin transaction is written down in a blockchain, which serves as the only distributed ledger, and removes the need for a central regulating authority. To obtain Bitcoin, you have to ‘mine’ them through a process of solving complicated mathematical problems or algorithms to verify transactions through the blockchain. They can also be bought with national money currencies and stored within an electronic Bitcoin wallet.
As more places are starting to accept Bitcoin, you can use it to purchase things such as cars, insurance, and technological gadgets. Furthermore, gambling with Bitcoin has also become extremely commonplace –– in fact, you can use Bitcoin deposits here.
Advantages Of Bitcoin
Now that you’ve gotten a clearer idea of what Bitcoin is and what it does, here are some reasons for you to consider using them as soon as possible.
Greater User Autonomy
Having no affiliation to any state governments and state-run banks means that Bitcoin is free from any potential restrictions and risks. Banks are run the risk of boom and bust cycles as they depend on the vulnerability of the economy. In reality, these situations have resulted in multiple bank runs and crashes, which resulted in the money that users hold in the bank disappearing overnight –- and there’s nothing they could do about it.
In contrast, since Bitcoin is not linked to any specific government or central authority, it would not be able to be impacted by external forces. This grants users full autonomy over their own money.
Increased Digital Privacy
Because most online transactions require users to input sensitive and personal information for verification purposes, intermediaries are needed to take charge of the transaction and control the provisioning of services to both parties.
On the other hand, as Bitcoin ensures user anonymity, its transactions are ultra-safe and secure. The only information that the user needs to provide is his blockchain address, which will be provided upon registration. A blockchain address is similar to an email address, with each one having its unique formula of letters and digits. Individuals are allowed to have multiple blockchain addresses, usernames, and passwords as they would like.
Furthermore, since Bitcoin transactions are performed digitally, Bitcoin owners will not be subjected to physical thievery. Well, what about online hacking then? Hackers might indeed be able to steal a person’s cryptocurrency if they have access to their e-wallets. However, with proper security measures in place, it is virtually impossible to seal Bitcoin. From 2009 till now, Bitcoin’s exchanges have remained largely impervious to hackers, which reassures users that any transactions conducted are almost fool-proof.
Bitcoin transactions are done peer-to-peer, which means that Bitcoin users can receive and make transactions with anyone within the network. Any approval or involvement by an external third party is not needed for your transactions to follow through unless Bitcoin is being exchanged with a regulated institution. This gives you more autonomy over your money and saves more time and effort.
Low Transaction And Banking Fees
Since Bitcoin is a decentralized cryptocurrency, international transactions do not have to go through any intermediary or government institutions. This means that the costs of transacting will be lower than bank transfers, which usually involve high fees and exchange costs. Plus, Bitcoin transactions are generally faster and more streamlined, which eliminates the inconvenience of wait periods and authorization requirements.
Whilst it’s normal for fiat currency exchanges to incur ‘maker’ and ‘taker’, deposit, and withdrawal fees, Bitcoin users can bypass any form of costs related to traditional banking. This means that users don’t need to pay any form of minimum balance fees, overdraft charges, returned deposit fees, and account maintenance costs. Bitcoin’s goal is to make online transactions more convenient, not to maximize profits from its users
Ease of Accessibility
As long as you have an Internet connection, you can purchase anything or transfer your coins with a few clicks on your smart device. You will no longer have to physically visit the bank or a store to get things done. How convenient is that? Plus, you don’t need to input any personal information as well!
Additionally, since the only prerequisite is a smart device and Internet access, Bitcoin can also be used by those who do not have access to the traditional banking systems for whatever reasons.
You Can’t Alter Your Transactions
One key attribute of Bitcoin’s blockchain is its immutability. This means that any transactions made with the blockchain are irreversible, and you won’t be able to alter them from a third-party, such as government or financial services agencies. Furthermore, it’s also not able to file a charge-back for Bitcoins that have already been sent over to someone else. The only way to reverse the transaction for any reason is to have the recipient send back the same bitcoin.
Now, Bitcoin is not as confusing as it seems, doesn’t it? Essentially, Bitcoin works like cash –– except that it is not under the jurisdiction of any intermediary or government entity. This saves on any external transaction fees, and ultimately makes the entire process faster, quicker, and more streamlined. All you need is a smart device and Internet access and you’re all set. Cryptocurrency is slowly taking its place in the world and we believe that it may end up dominating financial markets in the future. Maybe it’s time for you to hop on the bandwagon, too!