Disclaimer: I’m not saying that Bitcoins are a good investment nor am I recommending it as a money-making venture—I’m not. If you’re interested in Bitcoin, I simply hope that my take on it can help you come to your own conclusions about it.
You’ve probably heard of Bitcoin, a form of cryptocurrency that first made waves back in 2008. Since then, big and small businesses, most of which are based in the US, have started accepting it as payment. Curious as to why it’s been gaining traction these past few years? Here are six popular advantages of using Bitcoin:
Unlike most bills and coins or fiat money, which can technically be produced as many times as issuing bodies want, Bitcoins are not supposed to exceed 21 million in circulation. While this might change at some point in the future, seeing as there are only close to 2.644 million bitcoins left unmined as of April 2020, the current situation makes them a limited commodity, which, in my opinion, gives them more value.
A digital substitute for gold
Like gold, the value of Bitcoins doesn’t depend on a central body, a nation’s economy, or government stability, but on supply and demand. Another similarity is that both gold and Bitcoins can be exchanged for fiat money. In case you’re wondering, one bitcoin is, as of press time, worth P782,809.10. Don’t be too alarmed. Most people don’t go out buying one bitcoin just as they don’t casually go to a bank to buy one whole gold bar. They buy just a percentage of a bitcoin, which, fingers crossed, will increase in value in the long run.
Potential for growth
Right now, most of us still use fiat money, especially in the Philippines, but the economic landscape is changing, and there may come a time when most, if not all, of the world will use Bitcoin as the primary currency. Once that happens, the value of Bitcoins will likely increase, and early adopters will be glad to have invested in it early.
Military-grade cryptography protects every Bitcoin transaction, making it practically impossible for anyone to override transactions (provided you take proper precautionary measures on your end). But what makes Bitcoin most interesting to me is that it’s not governed by a single body like a bank or a credit card company. Rather, it’s regulated by a community, allowing for all transactions to be recorded at the same time and making anomalies immediately noticeable.
The fact that no singular body is controlling the strings means that no one has monopoly on payment fees or flow of currency. This makes the use of Bitcoin cheaper, even if you use it in different countries.
Without the middle men, Bitcoin makes money transfers so much faster, too. No need to wait for several days or abide by cutoff periods before you can receive your cryptocurrency.
These advantages of using Bitcoin aside, the idea itself isn’t infallible. There are some areas where the cryptocurrency can still improve, and even if the concept itself is sound, not all institutions that make a living out of trading Bitcoin can be trusted. However, I believe the future of currency will continue to evolve, just as it always has, and I’m interested to see what happens next.
Interested in other forms of investment? Check out our investment stories here!