March 12, 2020
We are all used to fiat currency or, in more simple terms, conventional money. It makes perfect sense because it has existed for thousands of years, and even if it has problems, such as devaluation, which then leads to inflation, we still feel confident about it.
Cryptocurrency or more specifically bitcoin, isn’t a new thing, but it is undoubtedly young being only a bit more than a decade on the market. Moreover, there are many frauds and controversies related to doing business alone, so it’s no surprise people are suspicious about virtual currencies. Additionally, bitcoin news has only recently started to spread widely so that more people can get informed about it.
Nevertheless, there are plenty of reasons why bitcoin is better than traditional money.
For instance, if you are traveling to a country that doesn’t use the same currency as yours, you need to pay attention to conversion rates. Otherwise, you risk losing some money. This will not happen when you are using bitcoin.
When we first heard about it, we also had some doubts, and it seemed unreliable. However, we decided to investigate and were pleasantly surprised by the findings. Today we will share them with you, discuss the reasons to use bitcoin, and explain what it is.
What Is Bitcoin
Some people talk about virtual currency and money as if these are two different things. But this is wrong; for example, if you have Indian rupees and money (USD), you won’t claim that dollars are money while rupees are something else. The same goes for bitcoin – it’s also money – just another, virtual form. By definition, it is a cryptocurrency – digitalized currency without a central bank. Although it is virtual, it does have all elements that fiat money has – it is a means of payment, a unit of account, and a store of wealth. Therefore, we can conclude that it is money. If you wish to find out more about it, you can read here.
There are plenty of reasons why it is much better to use bitcoin today. In the following sections, we will see how bitcoin works and look at some other crucial details.
Why Use Bitcoin
It is not hard to understand how it functions because it is nothing more than a computer file kept in a virtual wallet app. You can send and receive bitcoins directly from and to your wallet through online transactions that are recorded in the blockchain. The purpose of tracking and recording these transactions is to ensure security and prevent people from perpetrating fraud.
1. Low Transaction Charges
This is one of our favorite advantages. Unlike fiat, cryptocurrency has very low transaction and transfer fees. Even if you are transferring bitcoin amounting to millions of dollars, it will cost you just a few hundred bucks – that is how low the charge is when exchanging bitcoin to USD. This is because there is no intermediary, and it is an excellent benefit for people who often travel.
2. No Borders
You can take it to any country in the world and exchange it for fiat currency once you arrive there. The only thing you need to find is the best bitcoin exchange office that will give you reasonable rates. Carrying bitcoin is much safer than conventional money or credit cards.
3. Impossible to Steal
We live in a time when poverty is increasing, and, therefore, more people resort to stealing. However, it is not possible to filch bitcoin unless the thief has, for some reason, private keys necessary to access the wallet.
Cryptocurrencies allow users to have autonomous control over how, and how much, they are spending without addressing a bank or a government body.
5. No Banking Fees
This doesn’t mean that you don’t have to pay anything because there are still things like withdrawal and deposit charges. But you can forget about all those monthly account fees such as maintenance, minimum balance, and many others.
6. There Isn’t Counterfeit Cryptocurrency
Almost everyone is at some point afraid of getting fake money. Well, when you are dealing with bitcoin, you can be sure that this won’t happen. In this case, you don’t give it to an unknown person but to the network that checks everything first before proceeding with your transaction.
7. Online Shopping
Many of us don’t have time to go to supermarkets or shopping malls. Besides, it can be frustrating when you need to go from store to store to find what you need. That’s why many people opt for online shopping. Of course, you can buy things online with a simple credit card, but bitcoin makes it more convenient because you don’t need to leave any personal data on the Internet.
8. It Is Accessible
All you need for transactions is a smartphone or a computer with Internet access, and you are good to go. This means working with bitcoin is much simpler for people worldwide, particularly those who, for whatever reason, cannot use traditional systems of payment and banking.
9. Open but Secure
This means that people can receive and send bitcoins between themselves without intermediaries. However, it doesn’t imply that anyone can do whatever they want because there is a network that controls the safety and security of transactions. Also, users have a password called a private key, which is necessary for operations.
When you use traditional banking or payment systems, usually you have to wait a day or two before your withdrawal/payment is processed. With bitcoin, you have instant transactions. When you send bitcoins to someone, they will see the amount within seconds. Of course, then they need to wait for it to be confirmed, but it is still shorter than with a bank.
We hope that we managed to explain why bitcoin is better than traditional money. The purpose is not to convince you of anything but to make sure that you have all the facts when deciding on the type of currency to use. If you find this topic interesting, we believe you would like to read about how to earn bitcoin as well. Have you thought about switching to cryptocurrency before? What are your pros and cons?
Chele is an independent financial advisor, and a few years ago, she became interested in the phenomenon of cryptocurrency. She focused on researching the topic, and now she writes a column sharing her findings and opinions with others. Chele enjoys horseback riding, playing Book of Ra, and traveling with her partner.