When Bitcoin was launched it was envisioned as a medium for regular transactions by the inventor Satoshi Nakamoto. The concept behind decentralized digital currency was to discard centralized control over the money from any third parties like government agencies to make sure that there is speedy processing of transactions. There are many advantages and disadvantages of Bitcoin. So there are various benefits of Bitcoin, which we will be discussing now.
After a decade, questions on whether the digital currency has failed to cater to its original cause. Very rare daily transactions take place via BTC as an exchange medium. But the concept of alternate currency, beyond federal agency and government control, is powerful. The latest improvements in the technology of Bitcoin like the Lightning network have the power to return Bitcoin to its original cause. Let us have a look at the benefits of Bitcoin over cash.
What Is Bitcoin?
Bitcoin (BTC) is a decentralized digital coin that the customers can purchase, sell, and even exchange directly without any third party like a financial institution. The formulator of this currency Satoshi Nakamoto defined the requirement for “an electronic payment system based on cryptographic proof instead of trust.”
Each and every transaction of Bitcoin that has even been fulfilled remains on a public ledger that everyone can avail, enabling each transaction hard to reverse and impossible to copy.
Since the public launch of this coin is 2009, the Bitcoin price has risen dramatically. Even though, once it was valued at below $150, as of 11.10.2021 at the time of writing the value of 1 BTC is $56,510.60 (11.10.2021, 04.00 GMT). Because the supply of BTC is limited to 21 million coins, there are many crypto experts who predict that the value of this digital coin will keep on increasing in the future.
Benefits Of Bitcoin In The Present Market Scenario
Now that you have witnessed a brief overview of the idea of Bitcoin and why it initially came into existence, let us have a look at the benefits of Bitcoin. Bitcoin is used in several ways now, as a mode of payment, like trading, and also as mining. There are many benefits of Bitcoin mining as well.
Bitcoin offers user autonomy
Conventional fiat currencies carry various restrictions and risks. For instance, banks are exposed to bust and boom cycles in the economy. At times, these situations can end up in crashes and bank runs as has taken place for many times in the past. This implies that the users are not really in control of their cash. There at least cryptocurrencies like Bitcoin promises autonomy as the price of these cryptos is not connected to any specific policies of the government. Not only with Bitcoin, but this is also a generalized benefit of cryptocurrency on economy.
Transactions in Bitcoin are pseudonymous
This is another benefit of cryptocurrency. Most transactions that take place online require a range of data to identify the user conducting the transaction. For instance, transferring money from one user to another can take place only after identifying information from both ends and after being verified.
But transactions in Bitcoin are pseudonymous. This implies that they are not fully anonymous, the transaction can only be identified by the blockchain address. A user can have more than 1 address. IP (Internet Protocol) address or any other information is not required for the process of identification.
Transactions in Bitcoin are conducted on a P2P basis
The payment system at Bitcoin is a completely peer-to-peer basis which means that the users are able to receive and send payments from or to anyone on the network around the globe. Unless they are receiving or sending Bitcoin from any regulated institution or exchange, the parties to a transaction do not need permission from any external authority or source.
Bitcoin transactions do not require banking fees
While it is thought standard among fiat currency exchanges to charge a “maker” and “taker” fees along with occasional deposit and withdrawal charges, the users of Bitcoin are not subject to the invocation of traditional banking fees that is related to fiat currency. This implies that no maintenance of account or minimum balance charges, or things similar to that is required.
Bitcoin payments are mobile
As with many of the online payment structures, Bitcoin users can pay Bitcoin any time anywhere with just a stable internet connection. This implies that to purchase anything, the users are not required to travel to the bank to withdraw money. They can directly pay with Bitcoin.
Because the user can receive and send BTC with only computers and smartphones, theoretically it is available to a population of users without access to the traditional banking systems, debit cards, credit cards, and other methods of payments.
The Bottom Line
There are several advantages of using Bitcoin as a mode of transaction. At the time of creating this coin, the aim of the creator was to use this as an alternative to fiat currency. But now it is more widely used as a method of payment. But with the change in use, the benefits of Bitcoin cannot change. So in the above section, we have discussed some of Bitcoin’s benefits.