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Why use Bitcoin?

Started by admin, Oct 15, 2019, 06:12 pm

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Why use Bitcoin?
Bitcoin is often hailed as the future of the monetary world for a variety of reasons.
It's decentralized and brings power back to the people . Launched just a year after the 2008 financial crises, Bitcoin has attracted many people who see the current financial system as unsustainable. This factor has won the hearts of those who view politicians and government with suspicion. It's no surprise there is a huge community of ideologists actively building, buying, and working in the cryptocurrency world. Freedom. The concept that one could carry millions or billions of dollars in Bitcoin across borders, pay for anything at any time, and not have to wait on extended bank delays is a major selling point. Security. Bitcoin payments don't necessarily need to be tied to one's personal information. Since personal information is left out of the transactions, users aren't as exposed to threats such as identity theft. Bitcoin can also be backed up and encrypted to ensure the security of your money. Low Transaction Fees. Banks and companies like PayPal charge to send and receive money. Bitcoin replaces the 2.5% "transaction fee" with one that's only a fraction of that.
The Immutable Ledger. Bitcoin's blockchain public ledger is objective. People trust it to be fair because it is based on pure mathematics, rather than the human error and corruption of questionable politicians.
What are the disadvantages of Bitcoin?
For all its advantages, Bitcoin does still pose some significant issues.
Perhaps one of the largest reasons everyone hasn't jumped on the Bitcoin train is because its price is shrouded in uncertainty. Many people are concerned with...
Legal Gray Area. Major governments have largely remained on the sidelines, and this has created both a sense of potential and apprehension for Bitcoin proponents and critics respectively. Bitcoin isn't backed by a regulatory agency and a government would technically be ceding power by supporting a decentralized currency. This has been largely officially unaddressed. Bitcoin's price, however, tends to be very sensitive to any news concerning the US government's opinion of cryptocurrencies. For example, when the SEC denied the approval of bitcoin-based exchange-traded-products--essentially bitcoin-backed assets on the stock market--in 2017, Bitcoin's price dropped 18%. Yet while the price and adoption of Bitcoin would be affected by government action, governments are unable to criminalize Bitcoin. In fact, governments such as the United States and China have invested in it at some capacity. Exchange hacks. As stated above, an exchange hack has nothing to do with the integrity of the Bitcoin system... but the market freaks out regardless. This trend seems to minimize as users see that cryptos recover from exchange hacks. As exchanges evolve and become more secure, this threat becomes less of an issue. Additionally, outside investments funneling into exchanges are providing the capital for them to grow stronger. Illiquidity. This is mostly moot due to Bitcoin's $47 market cap but it still makes users sweat. It's highly unlikely that Bitcoin's price would plummet and you'd be unable to take action, but it's still unsettling. As more investors invest, however, illiquidity becomes a negligible risk, as there will likely always be a buyer for Bitcoins waiting. Volatility. This very reason many speculators are attracted to Bitcoin is the same reason many potential users are hesitant to get involved. Users that look at Bitcoin as a speculative investment option are essentially gambling on the process, and the future price of Bitcoin is largely unknown. There are estimates that Bitcoin will both be worth pennies in a few years, while some predict that a single bitcoin will be worth $500k in three years. As new investors continue to invest and the market cap grows, Bitcoin's price could become more stable. Lack of adoption by businesses. The price volatility is a large reason that many businesses have yet to adopt Bitcoin as a form of payment. Increased consumer adoption and price stability will eventually mitigate this disadvantage.
Another disadvantage is that while many people have heard of Bitcoin, few understand exactly what it is or how it functions. Guides like this help to push the needle and build a foundation, but it's ultimately on the users to seek out more information.
Bitcoin's strength lies in its networking effect. The more we spread the word and grow the Bitcoin community, the better off our bitcoins will be.
How to Buy Bitcoin.
As mentioned above, in the early years of Bitcoin it was difficult to find a trustworthy place to buy the cryptocurrency. With the increase in demand for Bitcoin, numerous new companies have sprouted to help facilitate easily purchasing Bitcoin.
These days, many Bitcoin exchanges have received huge investments from venture capitalists. They're also now more heavily regulated, especially those based out of the United States. You can compare exchanges and view our in-depth reviews in our How to Buy Bitcoin Guide. We've also listed our top two recommended options below:
Coinbase launched in 2012 with the hopes of giving users an easier way to buy Bitcoin. Since its launch, the San Francisco based startup has become the most commonly recommended buying option for newbies. You can learn more in our complete Coinbase Review and User's Guide.
Gemini was founded in 2015 by Tyler and Cameron Winklevoss. While they launched more recently than many of their competitors, the New York-based cryptocurrency exchange has quickly built a great reputation in the crypto community. You can learn more in our Gemini Review and User's Guide.
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