Why Use Bitcoin?
Bitcoin may be one the most important thing to arise from the internet since Google
Bitcoin has been a buzzword lately, coming into every major new outlet. From Bloomberg, to Wired, The New York Times, Wall Street Journal, and others, the media is having a field day with the topic. Over the past couple months, the topic has shifted from Bitcoin in general, to its underlying technology, the blockchain. To us, Bitcoin wouldn’t exist without the blockchain, and vice versa, they’re inseparable.
There are many reasons bitcoin is important and arguments to why use bitcoin. People always ask these quesitons when we mention Bitcoin, so we’re going to go into detail for why bitcoin is important.
Bitcoin is a commodity
Bitcoin should be likened to gold, rather than Fiat.
There is a tremendous amount of activity when it comes to commodity trading. Very rarely do people who invest or trade commodities actually own the commodities being traded, rather they trade funds or ETFs. Bitcoin is similar to commodities in the way they can be bought and sold, but also the speculation around them. The environmental factors are not directly tied to the price like say soybeans. It’s tied to other factors things such as general market sentiment influenced by macro economic events.
The blockchain is a global ledger of all bitcoin transactions. Every single transaction is confirmed (once) when that transaction is written on to another ledger on the bitcoin network. This allows unprecedented transparency and authenticity. For if a transaction is only confirmed once on the network over several weeks, there must be a reason why it doesn’t exist on other ledgers, since it is probably inauthentic. This technology underlying makes counterfeiting Bitcoin more difficult.
Bitcoin’s blockchain technology embodies the internet culture, where information is shared objectively.
Bitcoin is Deflationary
Bitcoin’s set limit of 21 million Bitcoin plays a key role in its inflationary characteristics. The final Bitcoin is estimated to be mined in 2xxx and willl probbaly be epic. This Economist Article explains how some people may consider this misleading, but it isn’t true.
Fiat is Prone to Government Manipulation
Although this isn’t a characteristic of Bitcoin, it has value in the sense that inflation is hardwired into the USA economy. Every year inflation reduces the real value of fiat currency by a percentage. This is dependent on a number of government-controlled factors such as money supply, lending, laws, and economic packages.
Bitcoin is Pure, Unregulated, and Open
Pure may some like a nebulous idea, but it isn’t. In regards to Bitcoin, it means that the price is regulated by pure supply and demand. Without any demand, the price will drop. This also relates to commodities in that sense. Ever since governments stepped in, it seems that it’s doing worse and worse.
This also means that Bitocoin’s openness allows people to create their own, unregulated ways to utilize it. Whether it be peer to peer lending, to stock markets of bitcoin service companies, Bitcoin creates an economy of its own, by the people, for the people.
Bitcoin will never die as long as individuals run the bitcoin software. Typically an internet wallet has servers that run the software, but that’s a bit more complicated to describe. If someone wants to become a bitcoin node, they run the software and start to process transactions. The beauty of this is that
Bitcoin has no Borders, Limits
Bitcoin embodies the internet culture.
It is open, free, “unbreakable” and decentralized. The internet was started to share information, and bitcoin is a revolution in that idea. Bitcoin is an idea, firstly, that financial property can be directly controlled by its owner. As we mentioned, banks own the money under deposits, they’re free to do whatever with a percentage of all deposits. When someone owns a bitcoin, it operates similar to cash, in the fact that the one in possession of the private key, has the ability to do with it what they please. Bitcoin is a decentralized cryptocurrency, meaning that it cannot (easily) be shutdown.
The world is changing quickly, Bitcoin embodies that change.
Benefits of Bitcoin could be discussed forever, here are some more key advantages of Bitcoin.
- Low Transaction Fees
Sending fiat over borders, costs surprisingly more than I thought. Even with trade laws encouraging and enabling transfers over long distances, it doesn’t mean its cheap. Bitcoin costs roughly 1 cent to send to anyone else. That’s it, wallet to wallet, address to address. It’s that simple, and the fee can be adjusted according to priority.
- Money is already Digital
Since the dawn of computers, they have been handling financial transactions. Why not trust Bitcoin, with its blockchain technology. It’s built from the ground-up that way, rather than forced upon it like fiat.
These are the reasons why bitcoin is important. We could go on and on. We will continue to edit this article as we think of more, but we believe that the answer should also be simple and short.
Bitcoin has overcome many challenges, and continues to flourish with community support, services, and development.
It’s never too late to get into Bitcoin, Bitcoin is still young. If you’re curious enough, check out our Getting Started with Bitcoin Article.
Sources, or additional reading:
Last Edited: March 26, 2016