Bitcoin, still very much a nascent trend, is nonetheless continuing to show signs of steady growth as businesses and consumers alike explore the opportunities involved. But just where does Bitcoin’s appeal lie and why is it having everyone from retailers to investors raving?
As the most well-known and widespread form of ‘cryptocurrency’ today, Bitcoin is promising to revolutionise the way people deal with money on a daily basis, with some going as far to suggest that it will one day become a mainstream currency. Here we look at exactly how Bitcoin plans to do this, digging into the main benefits that its proponents are preaching.
1) It’s secure and anonymous
With information security and privacy concerns increasingly gaining traction, those looking to invest in the Bitcoin wave will be relieved to hear that one of its main benefits is a relatively high level of security.
Layers of backup and encryption technologies provide a strong firewall behind which users can conduct transactions, while personal identification information doesn’t have to be transmitted. Identify theft is thus eliminated and transactions are virtually untraceable.
Users are in total control of their Bitcoin wallets and transactions at all times. And despite it being a completely digital currency, it is impossible to ‘steal’ Bitcoins per se without physical access to the computer.
2) It’s fast and cheap
Even in this day and age, digital monetary transactions are not as fast and efficient as we’d like them to be – especially if international travel is required.
Bitcoin offers a much quicker alternative, with money sent anywhere in the world in a matter of hours at most. There are no inter-bank clearance times to wait for or holidays to deal with.
3) It doesn’t need banks – which means no fees
Should Bitcoin ever become a mainstream form of payment, the future of traditional banks could well be threatened.
One of the biggest selling points of Bitcoin is that it is a decentralised currency, with no major authority to oversee transactions. With complete deregulation, the power is truly in the hands of the consumer.
Obviously, this means no or very minimal transaction fees involved, and cutting out of much of the red tape and regulations that can frustrate traditional bank customers.
However, this level of freedom, while welcomed by most, could open up a serious threat – an untraceable medium through which criminals can easily facilitate transactions, completely undetected.
4) It’s relatively low risk
Traditional currencies are constantly open to a number of risks, such as inflation or collapse – one need only look at what happened to the Zimbabwean dollar to see what happens when a currency goes out of control.
With the currencies of today, governments can print as much of it as they want or need, leading to inflation. There is essentially an infinite supply of money, and this can cause havoc.
Bitcoin, however, will be immune to inflation as there will be a finite number – 21 million – of Bitcoins ever issued. The rate of Bitcoin creation is slowing down, and will completely stop once this quota is reached.
Bitcoin therefore promises to be an incredibly stable currency, with its purchasing power safe from decline.
Given these numerous advantages, the appeal of Bitcoin to some is clear to see. And while risks and uncertainties still abound with this technology that is yet to truly take off, its potential to one day break into the mainstream is very much alive.
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