The decentralization and the immutability of digital forms of money make them a secure and safe way to invest. Besides, most states allow people to buy Bitcoin using charge cards. While many people are still hesitant about investing their money in cryptocurrencies, you should know that there are numerous advantages of these forms of money. While Gold is still a safe and secure investment, you can also use your charge card to buy Bitcoin.
Bitcoin’s Value Was Irrelevant
In 2008, an anonymous figure, who later went by the name Satoshi Nakamoto, published a white paper explaining the workings of Bitcoin. The paper describes how Bitcoin works and its planned launch date. It also explains how bitcoin is not subject to any gatekeepers and is based on a public ledger called the blockchain. Every transaction is cryptographically signed and recorded on the blockchain, distributed to every Bitcoin network participant. This avoids double-spending, guarantees that each transaction is recorded in a public ledger, and makes it possible to determine the OKX BTC to USDT price.
The original idea behind bitcoin was to replace the central bank. The white paper suggested that people should distrust government-backed financial institutions. However, the popularity of bitcoin grew as a financial tool instead of a currency. While the system may have started as a means to transfer money, it eventually developed trust issues and became an investment vehicle.
It Can Function as a Store of Value and a Unit of Exchange.
In a currency system, a store of value is an asset that does not depreciate. This asset can be saved, traded, or retrieved later to generate passive income. Some examples of such assets are Gold and silver, real estate, and fine art. But money is by far the most common store of value because it is durable, liquid, and has significant purchasing power.
Bitcoin’s unique properties have allowed it to perform remarkably well as an asset. However, it is comparatively young compared to other assets with a more extended history of being viable stores of value. Bitcoin is also highly volatile over short periods. Massive drawdowns of 50% or more are expected, while other assets have more gradual price swings.
The material should be relatively scarce to qualify as a good store of value. Ideally, it should not have a very short lifespan and be relatively liquid. Liquidity, after all, measures how easily a store of value can be exchanged for another. For example, Gold is highly liquid, while real estate is much less liquid. If a store of value is too rare, no one will want to exchange it for anything else.
It Has Hefty Transaction Fees.
Bitcoin has high transaction fees, and that’s a problem. The fees vary but typically range between $24 and $31. The high fees directly result from increased traffic on the network, which has limited space. As a result, transactions move more slowly, and the number of transactions waiting to be accepted has skyrocketed over the past few months.
It Uses Proof of Work.
The rise of cryptocurrencies has revolutionized the way the world views money. Since 2009, when the first block of Bitcoin was mined, thousands of unique cryptocurrencies have entered the marketplace. However, Bitcoin remains the most popular among them all. It is estimated that 8% of Americans have some cryptocurrency investment, and 5.15% have bought Bitcoin.
The process of creating and mining Bitcoin is based on the concept of proof of work, which is a way to incentivize users to create new blocks. The process involves a large amount of computing power and energy, which rewards those who mine successfully. Proof of work is designed to encourage people to play by the rules and not attempt to cheat.
Bitcoin has many advantages over other currencies:
- It is decentralized, so there is no need to pay a central authority.
- It does not require financial institutions to make payments.
- It allows people to send and receive Bitcoin with minimal cost.
Great post, right now Bitcoin is getting hammered, the collapse of FTX, potential struggles with Genesis are not helping the crypto market. However, this too shall pass. I see Bitcoin’s use case as continuing its evolution as a hedge against the uncertainty created by central authorities. I’m not sure it will replace gold but just think about it…..At the height of the market Bitcoin gained a market cap of over a trillion dollars, with $0 spent on advertising, and no figure-head, tweets, or FB posts! It certainly has a future!