Invest Bitcoins | What Are The Benefits?
Table of Contents
What Exactly Is Bitcoin?
Bitcoin is a decentralized, peer-to-peer cryptocurrency system that conducts transactions using bitcoin as the medium of exchange. Since its inception in 2009, the Bitcoin network has grown to dominate and even define the cryptocurrency space. It spins a legion of altcoin enthusiasts and offers some users an alternative to government-backed fiat currencies such as the US dollar or euro, or pure commodity currencies such as gold or silver coins.
A large part of what attracts these people to Bitcoin is its decentralized nature: it is not managed or overseen by a central body. This quickly differentiates it from fiat currencies issued and supported by central banks. Fiat currencies are also distributed into an economy by organizations like banks that the government regulates.
On the other hand, the production and distribution of Bitcoin are not reliant on government money. Bitcoin transactions are handled by a private network of computers connected by a shared ledger. Each transaction is recorded concurrently on each computer’s “blockchain,” which refreshes and notifies all accounts. The blockchain acts as a decentralized ledger, obviating the need for any central authority to keep such data.
What are the Advantages of Bitcoin?
With a basic understanding of what bitcoin is, we can better appreciate how this leading cryptocurrency may help its users.
1. Bitcoin allows for user autonomy. Conventional fiat currencies face a slew of constraints and dangers. Banks, for example, are susceptible to the economy’s boom and bust cycles. Occasionally, as has happened multiple times in the past, these scenarios might result in bank runs and crashes. This implies that consumers do not have complete control over their money. At the very least, bitcoin theoretically provides users with autonomy, given its price is unrelated to particular government actions. This implies that bitcoin users and owners retain control over their funds.
2. Transactions on Bitcoin are pseudonymous. Most online transactions demand a slew of information to authenticate the party initiating the transaction. For instance, money transfers between individuals are permitted only when the participants’ identifying information is confirmed on both ends. Similarly, making an online purchase requires you to input identifying information. While the verification procedure helps to avoid criminality, it also firmly puts an intermediary in control of the transaction, enabling them to regulate the distribution of services to select parties.
3. Bitcoin transactions are peer-to-peer. Bitcoin is a peer-to-peer payment system, which means that users may send and receive payments to and from anybody else on the network, anywhere in the world. Unless the participants to a transaction are sending or receiving bitcoin via a regulated exchange or institution, they do not need clearance from an external source of authority.
4. Bitcoin transactions are fee-free. While it is common for fiat currency exchanges to levy “maker” and “taker” fees, as well as occasional deposit and withdrawal costs, Bitcoin users are exempt from the litany of typical banking expenses connected with fiat currencies. This eliminates account maintenance and minimum balance fees and overdraft and returned deposit costs.
5. Bitcoin transactions feature cheap transaction costs, ideal for international payments. Fees and currency expenses are often associated with standard wire transfers and international purchases. Due to the lack of intermediate organizations or government engagement in Bitcoin transactions, transaction costs are often lower than those associated with bank transfers. This may be a significant benefit for tourists. Additionally, bitcoin transfers are quick, reducing the inconveniences of traditional authorization processes and wait times.
6. Bitcoin transactions are mobile. As with many other online payment systems, Bitcoin users may purchase their coins from any location with an Internet connection. This eliminates the need for customers to visit a bank or a retailer to make a transaction. Unlike online payments made using US bank accounts or credit cards, no personal information is required to execute a transaction.
7. Bitcoin transactions are final and cannot be reversed. The immutability of Bitcoin’s blockchain is one of its properties. As a result, blockchain transactions are irreversible and cannot be modified by a third party, such as a government institution or a financial services agency. Additionally, it is not feasible to dispute a chargeback for bitcoin delivered to another party. In a sense, the only method to reverse Bitcoin transactions is for the receiver to give back the original bitcoin.
8. Bitcoin transactions are completely safe. Bitcoin is not a tangible medium of exchange. As a result, robbers will be unable to steal it from the possessor. Hackers may steal a person’s cryptocurrency if they have access to the wallet’s private keys. However, it is theoretically impossible to steal bitcoin with adequate protection. While there have been instances of cryptocurrency exchange hacks, Bitcoin’s exchange has remained unaffected. As a result, transactions between two (or more) addresses are safe.
9. Accessibility. Since users may send and receive bitcoins using just a smartphone or computer, Bitcoin is potentially accessible to masses of people who lack access to conventional banking systems, credit cards, and other payment methods.
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