The rise and rise of Bitcoin (BTC) has led to an incredible increase in interest in this digital currency. Apart from those seeking to know how they can invest in it, there’s a huge multitude of others who wonder what all the fuss is all about. For the latter, the main concern is that Bitcoin (and other digital currencies) don’t represent what they understand to be money or value- fiat and gold.
Bitcoin certainly has its own disadvantages when compared to the dollar and gold, but are there solid reasons that put it on top? The answer is yes. Here are some of the many pros of Bitcoin over fiat currencies or the gold standard.
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Bitcoin empowers the people not the banks
Basically, Bitcoin gives the user the power over their funds and since no one controls it, no one else has power over it. It’s unlike gold and the fiat, which are under the control of established financial bodies like central banks. We could say Bitcoin’s power comes from the fact that its supply and use can’t be manipulated.
There are of course instances when rogue traders can manipulate prices by illegal trading tactics. However, that will soon come into check when Bitcoin’s inbuilt scarcity means no one would hold huge amounts, enough to dump on the market. Bitcoin’s deflationary nature means that prices will increase on the principle of supply and demand.
Bitcoin better as a currency
One of the main disadvantages of the current system of money- whether the fiat currencies or the gold reserves- is that they are too slow. Bitcoin beats these forms of transactions for speed. You can send or receive millions of USD for instance within seconds using Bitcoin’s blockchain technology. The opposite is what happens with fiat currencies like the dollar.
Moving huge sums of money from one bank to another or even from an individual’s account takes hours to days, depending on the amounts involved. In addition, the transactions can be costly, often at the expense of those that were to benefit from the money. All the while, issues of privacy and security are compromised- banks will demand identification and very huge sums of money attract suspicion.
With Bitcoin, money moves fast, less costly, and without the bureaucracy or privacy infringements of fiat-based transactions. Furthermore, Bitcoin transactions are tamperproof and records remain intact forever, as explained below.
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Bitcoin (BTC) beats the dollar and gold on transparency
The blockchain is open-source and anyone on the network can take part in the transaction process, or check records to verify them. The same cannot be said of fiat and the precious metal. The public may not have a clue to the inner workings of the controlling bodies. It’s not easy to tell what the Federal Reserve can be up to, or whether what we have in circulation is really the total amount of gold there is.
Changes to the fiat or gold supply may not be verifiable, but as for Bitcoin, any change to the code is reached via consensus. The world can suffer economic challenges on the whims of a few when it comes to fiat or gold being the accepted forms of money. That can’t happen with Bitcoin, it’s next to an impossibility.
Bitcoin’s public ledger helps to make accounting easy, verifies the validity of transactions, and is essential in preventing counterfeits. These pros are not tamper-proof in relation to fiat currencies or gold.
Bitcoin provides better security compared to the Dollar or gold
This may lead to a debate from some quarters, so let me put it out there clearly: Bitcoin too, isn’t 100 percent secure. However, when it comes to securing money, Bitcoin is way better compared to the fiat currencies (including gold). There are rampant cases of identity theft and counterfeit bills are common all over the world. Losing money is also far easier than losing Bitcoin- especially if the user knows what to do.
Bitcoin, as a result, provides a higher chance of preventing losses due to their digital nature. There are several ways to ensure you keep your money safe when stored in Bitcoins, especially as the world moves towards a digital age.
Cyber attacks do happen and Bitcoins have been lost before, but the rarity of the matter makes it better than traditional fiat.
There are several other reasons that make Bitcoin (BTC) better that fiat (the Dollar) and gold. What’s even more encouraging is that the technology behind Bitcoin is still young and will get better with time. It could eventually replace fiat as we know it.
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