Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a dispersed public ledger called a blockchain, according to finance expert Dan Schatt. Bitcoin is unique because there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2021, over 100,000 merchants and vendors accept bitcoin as payment. Research produced by the University of Cambridge estimates that in 2022, there will be 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.
This digital asset was invented to create a new global currency outside the control of governments and banks. Bitcoin has done just that, but it’s also created opportunities for investors, entrepreneurs, and consumers alike.
The Benefits of Bitcoin
There are many benefits to using bitcoin as your chosen form of currency. For starters, it’s a global currency that can be used anywhere in the world. Transactions are quick and easy, and there are no bank fees or other hidden charges. Thanks to its cryptography-based security features, Bitcoin is also a very secure currency.
Bitcoin provides investors with many unique opportunities. First, bitcoin is deflationary due to its finite number, which means its value tends to increase over time. This works out well for investors who purchase large sums of bitcoin and hold it long-term.
One attraction of bitcoin is its potential to become a global currency. If enough people worldwide begin using it, this could make it very valuable indeed. While that might seem like a big “if,” keep in mind that 3 million people currently use the digital asset as of February 2019, according to Statista. This number is expected to almost double by 2022, which means there’s a good chance more consumers will embrace the idea of using bitcoin as their primary form of currency in just a few short years.
Anyone can start accepting bitcoins as payment without needing permission from banks, or other authorities is one major draw for entrepreneurs. It’s also very easy to accept bitcoins, and you can even get an invoice for your customers to pay using digital currency.
For anyone who wants to start a new business and doesn’t have a lot of money saved up, bitcoin is great because you don’t need much money to get started with it. In addition, bitcoin transactions are anonymous, which means that there’s no credit card information associated with them; this makes it harder for hackers to steal such information from your business.
Bitcoin vs. Other Payment Methods
When comparing bitcoin with other types of payment methods like cash or credit cards, it becomes clear how this digital currency has changed the face of traditional finance forever:
Credit Cards: Credit cards require some type of security, like a PIN or your signature, to authorize transactions. You also need to carry around the card itself to pay with it. Bitcoin is much more convenient than credit cards because your phone and some bitcoins are all you need.
Cash: Using cash can be dangerous because the money will be gone forever if you get mugged or robbed. Meanwhile, if there’s an issue with bitcoin transactions, you can contact support and resolve the problem without any real costs associated with it.
Credit: When you use credit, you’re essentially borrowing money (or goods) to be paid at a later time. This is useful in the short term, but it creates debt for your business if not managed properly, leading to financial ruin. Bitcoin does not require any credit, and transactions are paid immediately after they occur.