{"id":490,"date":"2019-06-27T12:38:27","date_gmt":"2019-06-27T12:38:27","guid":{"rendered":"https:\/\/paybis.com\/blog\/?p=490"},"modified":"2023-07-21T15:10:32","modified_gmt":"2023-07-21T15:10:32","slug":"advantages-of-bitcoin","status":"publish","type":"post","link":"https:\/\/paybis.com\/blog\/advantages-of-bitcoin\/","title":{"rendered":"Advantages of Bitcoin as a currency and as an investment"},"content":{"rendered":"

Have you ever been asked, by friends or family, to explain the advantages of Bitcoin and why it makes a great investment?<\/span><\/p>\n

If you started explaining its protocol, goals, and potential, chances are that people laughed it off, telling you that this experiment will not end well.<\/span><\/p>\n

Then again, you might have people who listened to you during the previous bull market and are now looking at you with a passive-aggressive look, still unaware of Bitcoin\u2019s true, long-term potential.<\/span><\/p>\n

So let\u2019s go all the way back.\u00a0<\/span><\/p>\n

We will explain Bitcoin and its main advantages in an easy to understand way, so you can get a better idea of its power and future potential.<\/span><\/p>\n

What Is Bitcoin?<\/span><\/h2>\n

Bitcoin is a cryptocurrency designed to be exchanged and transferred without the involvement of any third party, such as banks or financial institutions.<\/span><\/p>\n

Since its release in 2009, Bitcoin has led to intrigue and controversy, being a new currency form that could potentially replace centralized currencies that are managed by governments (USD, EUR, GBP) or commodity assets such as gold and silver.<\/span><\/p>\n

What\u2019s important to understand about Bitcoin is that transactions are processed through a private network of computers referred to as nodes, which are linked through a sharing program that is known as Blockchain.<\/span><\/p>\n

On top of that, every time an individual sends Bitcoin, these nodes record the transaction on the Blockchain, which is also a transparent record of all transactions completed from each individual wallet.<\/span><\/p>\n

And while all that may sound a little complicated in the beginning, once you get the grasp of it you will soon realize that buying and using Bitcoin can have its advantages.<\/span><\/p>\n

Therefore, this article will analyze all the advantages of Bitcoin, both for usability purposes and as a long term investment.<\/span><\/p>\n

5 Advantages of Investing in Bitcoin<\/span><\/h2>\n

Some of us already know that using Bitcoin in your daily life can offer an array of different benefits. These range from transaction speeds and lower fees all the way to the protection of your privacy.\u00a0<\/span><\/p>\n

Bellow, we will analyze the most important advantages of Bitcoin when seen from the perspective of usability.<\/span><\/p>\n

Eliminates the risk of fraud<\/span><\/h3>\n

\"ADVANTAGES<\/path><\/svg><\/a><\/picture><\/p>\n

Possibly the most important Bitcoin advantage is that only you are responsible for your coins since no third party can control Bitcoin. Each transaction is final and there is no possibility to counterfeit or reverse a transaction after a purchase has been completed.\u00a0<\/span><\/p>\n

On the contrary, when using FIAT currencies and traditional financial institutions, you run the risk of credit card chargebacks and Paypal refund scams.<\/span><\/p>\n

This is one of the most important advantages of Bitcoin, especially when it comes to merchants\u2019 protection.<\/span><\/p>\n

All in all, and since you are the sole individual who holds the keys to your Bitcoin wallet, the only way to become a victim of fraud is by consciously handing over your private keys or sending Bitcoin to another wallet.<\/span><\/p>\n

With Bitcoin, it\u2019s your responsibility to keep your money safe and the fact that it\u2019s decentralized in its nature means no one can take it or freeze your account. Which of course is a massive benefit.<\/span><\/p>\n

Bitcoin is a deflationary currency<\/span><\/h3>\n

Before explaining what a deflationary currency is, it may be useful to give a short intro on inflation and how it is hurtful in the long term.<\/span><\/p>\n

Inflation occurs when the price of products and services increases and there is a corresponding decrease in the value of money.\u00a0<\/span><\/p>\n

For example, one needs to take a look in the past to see how inflation works. The best way to illustrate this is with a shopping cart. In 1998, $20 could fill up a supermarket cart with a whole lot of things.\u00a0<\/span><\/p>\n

Then, in 2005, the same amount of money can only fill up about half of the shopping cart with groceries. This gradually continues until $20 seems like a very small amount of money to buy the essentials with.<\/span><\/p>\n

\"Advantages<\/path><\/svg><\/a><\/picture><\/p>\n

Generally, when looking at the long term, inflation has a huge drawback. The financial value of one\u2019s savings reduces over time, which can have a devastating effect on the savings of retirees.<\/span><\/p>\n

Deflation, on the other hand, does the exact opposite.<\/span><\/p>\n

One of the most important advantages of Bitcoin over fiat is the popular coin’s design that is programmed as a deflationary currency. Its total supply is restricted to 21million coins by the protocol.\u00a0<\/span><\/p>\n

This means that the more people that show interest and buy Bitcoin, the higher the price will rise to meet demands.<\/span><\/p>\n

Adding to that, the rewards given to miners are reduced every 4 years through a process known as halving. This is an added measure of scarcity that may positively affect Bitcoin\u2019s price in the future.<\/span><\/p>\n

Low transaction fees<\/span><\/h3>\n

\"low<\/path><\/svg><\/a><\/picture><\/p>\n

When Bitcoin reached its peak during the bull market of 2017, many people worried that the high transaction fees of the network would act as a negative catalyst, turning people away from adopting cryptocurrency.<\/span><\/p>\n

How could one use Bitcoin as a payment method at their local coffee shop, if the transaction fees were higher than the price of your cappuccino?<\/span><\/p>\n

During that time, the Bitcoin network had to confirm over 450,000 transactions per day which clogged the network.\u00a0<\/span><\/p>\n

As a result, the transaction processing time increased and so did the accompanying fees.\u00a0<\/span><\/p>\n

During its latest all-time high, Bitcoin\u2019s median transaction fees reached a high amount of $34. As you may have guessed, these high-fees were counterproductive for new investors and defied Bitcoin\u2019s purpose – cheap, transparent, and fast fund transfers worldwide.<\/span><\/p>\n

Thankfully, the problem got solved with the introduction of the <\/span>Lightning network<\/span><\/a>. The <\/span>fees required for Bitcoin transactions decreased drastically<\/b> and the median transaction fee is currently lower than $0.02.<\/span><\/p>\n

Adding to that, the bear market of 2018 saw a large number of investors (temporarily) leaving the industry, which resulted in additional decreases in the transaction fees.\u00a0<\/span><\/p>\n

At the moment of writing, the average transaction fee for a Bitcoin transaction is just under $0.18.<\/span><\/p>\n

Easy to use in any situation<\/span><\/h3>\n

Another great benefit of Bitcoin is its functionality and usability around the world.\u00a0<\/span><\/p>\n

More and more people and businesses are becoming more friendly towards crypto payments and see the benefits of the network.<\/span><\/p>\n

As such, you can spend and transfer your Bitcoins in a lot of different ways – eating at your local pizzeria, buying from reputable online stores, paying your internet bill and even your taxes.<\/span><\/p>\n

Another way that highlights Bitcoin ease of use is the way p2p transfers happen. One does not need to manually input a lengthy 32-digit wallet address and use it to transfer money.<\/span><\/p>\n

Instead, Bitcoin wallets include a feature which allows users to simply scan a QR code which is linked with a public address, in order to make a transfer.<\/span><\/p>\n

No involvement of third parties<\/span><\/h3>\n

\"Advantages<\/path><\/svg><\/a><\/picture><\/p>\n

From all the advantages of Bitcoin, this is probably the most important one and the only one that sets it apart from all its competitors.<\/span><\/p>\n

Bitcoin has no central authority. It is not controlled or influenced by the banking system, a government or any other financial institution.<\/span><\/p>\n

In one word, Bitcoin is a <\/span>decentralized<\/span><\/i> currency.<\/span><\/p>\n

And here is why we consider this to be one of the main advantages of Bitcoin:<\/span><\/p>\n