Bitcoin is the latest buzzword in the digital currency world. But, this virtual currency is an exchange medium that people use online. It’s a virtual currency like the other cryptocurrencies. However, people are expressing a lot of interest in this virtual currency globally. So, what makes Bitcoin better than any other conventional currency like the U.S dollar? Here are the top reasons why investors and traders are rushing to buy Bitcoin using fiat money.
Digital and Decentralization
Bitcoin is a digital and decentralized currency. That means nobody can have a physical Bitcoin in their hands or wallet. Additionally, decentralization makes Bitcoin challenging to control or regulate. Thus, people can use Bitcoin to exchange value without involving intermediaries like government agencies and banks. Consequently, Bitcoin transactions are cheaper and faster.
On the other hand, governments control conventional currencies through their central banks. That means the government owns fiat money, while people own Bitcoin. And this gives individuals more liberty when transferring value. What’s more, the absence of intermediaries makes Bitcoin transactions more secure and faster.
Bitcoin is Frictionless
A peer-to-peer system in the blockchain powers Bitcoin. That’s why people transfer their bitcoins without consulting their banks or other financial service providers. Ideally, you need a public address for the recipient’s crypto wallet to send bitcoins. What’s more, you can use this address to view the transaction history, thereby verifying the recipient’s authenticity.
With Bitcoin, you don’t have boundaries or limits. You also don’t need third-party intervention or an exchange value. Thus, you transfer bitcoins from one place to another without incurring hefty transaction fees or facing restrictions. And blockchain creates a public ledger that records all transaction details.
With fiat or traditional currency, you need your financial service provider to transfer funds. What’s more, you incur hefty fees, especially when handling international transactions. And traditional currency transactions can take days.
Bitcoin is Traceable
A primary disadvantage of traditional currency is that you can’t trace it or track the cash. While conventional notes can have serial numbers, the source or origin of money remains unknown unless somebody follows them.
On the other hand, Bitcoin uses the blockchain to create a distributed network comprising computers that make a public record that nobody can tamper with or edit. Thus, you can track the tokens and even know their current owners and the amount in their crypto wallet.
Bitcoin Can Be an Investment
Many people purchase Bitcoin and hold onto their tokens, wait for their value to increase, and sell them for profits. Also called crypto exchanges, these platforms allow people to convert traditional money into bitcoins.
Investing in Bitcoin’s cryptographic hardware and embedded systems come with volatility risk. However, investors have confidence that their investments can grow to achieve the maximum potential. That’s because Bitcoin value has increased over the last decade this cryptocurrency has been around.
Ideally, you can buy Bitcoin when its price decreases and then sell once it appreciates. Thus, you can gain a profit from the difference in Bitcoin prices at different times. While you can keep some traditional money in your bank account, you can’t be sure that fiat currency will experience a price or value increase.
Bitcoin has many benefits compared to traditional currency. Being decentralized makes this virtual currency quite volatile. Nevertheless, some investors take advantage of this volatility to trade Bitcoin for profits. To some people, Bitcoin is an investment or a haven for storing value. Nevertheless, this cryptocurrency is slowly transforming the way people see and use money. Some people prefer Bitcoin to traditional money. Nevertheless, Bitcoin’s acceptance and usage remain low compared to conventional currencies.