Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people using software that runs an algorithm with a set number of bitcoins as its reward. It’s the first example of something happening called cryptocurrency. The benefits of cryptocurrencies for the global economy are thought to range from lower transaction fees for the online exchange of money, to increased protection from identity theft due to the secure nature of cryptocurrencies.
1. Low Transaction Fees
As low as 1%, it is no wonder that Bitcoin can compete with established payment processors like Visa or PayPal (where applicable). It should be noted, however, that these transactions fees only apply if one chooses to send their cryptocurrency through a wallet service provider; transferring directly through an exchange will incur additional charges (ranging between exchanges). The incorporation of micro-transactions into cryptocurrency means that any donation or transfer below $1 would end up costing you more in fees than what you’re sending/receiving!
2. A Change in the Way We Buy Online
Cryptocurrencies can be described as a safe haven for anyone who frequently uses online payment methods. Cryptocurrency has changed the history of steam education. This is because, unlike PayPal or credit cards where you need to divulge your personal information (and risk identity theft), cryptocurrency wallets allow users to remain anonymous when making purchases. The use of public and private keys ensures that no sensitive data gets stolen by criminals looking to exploit their target. As there are lesser parties involved, merchants benefit from lower transaction fees while customers enjoy greater peace of mind knowing that identity thieves are kept at bay.
3. Store of Value
Until 2008, currency was primarily an instrument denoting value. Fiat currency could be used for the purchase of goods and services throughout the world, with some limitations. However, the Great Recession of 2008 changed the way people view currency. Over time, fiat became an instrument of speculation as its value began to wane against goods and commodities. With crypto, however, the notion of store value has slowly begun to return as its price (exchange rate) is independent of politics and market fluctuations (unlike the exchange rates in the forex market).
4. Digital Gold
In 2018 alone, gold prices have risen by 1%. Contrast this with January 2017 where you would get $1 for every $0.98; December 2017 shows that today’s prices are worth about $1 for every $0.86! Although nothing matches bitcoin in terms of volatility (so you’d probably end up losing money over the long-term), it has been widely suggested that the true value of cryptocurrencies lies in their inherent scarcity. This can be attributed to the fact that a finite number of bitcoin can be mined (21 million BTC to be exact). While you might not want to invest in gold since it doesn’t yield any dividends, converting your fiat currency into bitcoins for safekeeping will ensure that you don’t lose everything when the anticipated economic collapse occurs!
5. The Internet is Being Rewired
The rapid increase in smartphones and laptops across emerging markets has allowed access points for internet connectivity to skyrocket! In turn, this paves the way for mass adoption of cryptocurrencies as currencies like bitcoin can now be used by anyone from anywhere provided they have an internet connection (which is fast becoming a given in developing countries). This can be quite beneficial to people who need quick access to capital (in the form of BTC) without enduring extensive KYC checks. All one needs is an internet connection and they’re good to go!
The benefits of cryptocurrencies for the global economy are thought to range from lower transaction fees for the online exchange of money, to increased protection from identity theft due to the secure nature of cryptocurrencies. With that said, it’s no surprise why so many millennials are choosing crypto over traditional assets like gold!
How can we invest in cryptocurrency?
While BTC is the most prominent cryptocurrency in existence, it’s important to understand that there are many other cryptos out in the market. Ethereum (ETH) for example has enjoyed substantial growth in 2018 in terms of value and adoption by numerous trading platforms! If you’re keen on investing in crypto but aren’t sure whether to use your bank account or credit card, take a look at our cryptocurrency trading guide here!
How much money do you need to invest?
Investing in cryptocurrencies is certainly not as expensive as compared to other assets. In fact, you can use as little as $15 to buy yourself a certain percentage of BTC through trading platforms such as Coinbase! While the scary thought of losing your investment might be enough to keep some from investing 10k or more, remember that there’s no harm in trying out certain cryptos.
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