Bitcoin (BTC), along with thousands of other cryptocurrencies, is continuously gaining popularity because of its exceptional and valuable offerings in today’s global financial system. While some parts of the world—if not all—have witnessed the many benefits of using bitcoin and the significant contributions of digital currencies to different industries, the majority of the global population today still relies on the use of traditional fiat money issued by the government.
Bitcoin vs. fiat currency
Fiat currencies, known as paper money or government-issued money, have always been the primary means for any monetary transaction around the world. This legal tender is not backed by any commodity such as gold and other precious metals but is instead reliant on its issuing government’s economic and financial stability.
Since fiat money is printed, issued, and distributed by the central banks, the government regulates its circulation and value. However, as it is considered the dominant player in every country’s monetary system, a vast number of people trust and are confident using it for any financial transactions.
The way people spend money today is evolving; thus, we’ve seen the evolution of the world’s financial system through the birth of cryptocurrencies and other digital assets. As of today, there are over 5,000 cryptocurrencies available in the market, and bitcoin still ranks on top in terms of value, market capitalization, and popularity in the finance and technology space.
The said number of virtual coins is expected to rise over time, which implies constant growth in adoption. Because bitcoin has a lot of notable features, a lot of crypto enthusiasts, holders, and investors consider it to be more beneficial over fiat currencies. If you are not very familiar with bitcoin’s remarkable features yet and why it is dubbed more helpful to use over fiat money, read ahead to find out!
Advantages of bitcoin over fiat currency
There are a lot of benefits of using bitcoin, the leading cryptocurrency, over traditional fiat currencies. This includes having a decentralized system, privacy and security for users, and fast and cheap transactions, among others.
Decentralized network structure
Bitcoin is known for its distinct feature of having a decentralized system—meaning it needs no central authority or any governing body to run its operations. Unlike traditional fiat money that is distributed and regulated by the government’s central bank, bitcoin uses nodes that verify each transaction that enters the network. These verified transactions are kept in a public ledger that works the same way as bank records.
While this ledger is available for the eyes of everyone in the network, all personal and confidential information of every user is kept private. This prevents fraud and other possible breaches from arising in the network.
Security and privacy of users’ identities
Unlike transactions with fiat currencies that require personal details such as name, contact details, address, and more, transactions with bitcoin are kept anonymous. Even the person you are transacting with will not know your personal information and vice versa. With the identity protection in bitcoin’s network, there is a growing number of people who prefer to make transactions using this cryptocurrency.
Another notable feature that this network has is enabling users to track every transaction completed within the network. Transaction information and history can be traced and identified through wallet addresses.
Ease of use and accessibility
At first, the terms Bitcoin, blockchain, and cryptocurrency might sound overwhelming. However, contrary to what many people claim about this ingenious technology, bitcoin is efficient and handy to use, most notably for payments in everyday monetary transactions. Bitcoin uses digital wallets where amounts are stored, monitored, replenished, and spent. A bitcoin wallet can be installed on smartphones and personal computers, which makes it accessible and easy to use.
With bitcoin, payments can be made anytime and almost anywhere. There is no need to go to banks or other monetary institutions to send out cash, as transactions with bitcoin will only require you a few clicks on your devices with no business hours or holidays to watch out for.
Fast transaction speed
Transfers with fiat currencies vary depending on the location, amount, and means of transmission that you decide to use. These factors usually identify how long a transaction will take to complete.
With bitcoin, users only have to access their digital wallets and fill out the necessary items needed for the transaction to proceed. Bitcoin transfer is available 24/7 and in almost every part of the world. Unlike with banks and other money transfer service providers, payments with bitcoin can be made in nearly an instant.
Low transaction charges
Aside from having a speedy processing time, bitcoin transactions are also known for having minimal costs compared to most fiat currencies. Since fiat money makes use of third parties or intermediaries, there are additional fees collected for the transfer processing. Wire transfers usually base the percentage of the amount charged on the source of remittance, currency, amount, and purpose.
Digital wallets cut off the use of intermediaries as it can perform direct transfers to banks, monetary institutions, and even individuals that own bitcoin wallets. With this, the cost of remittances with bitcoin is cheaper.
A good option for market investment
Bitcoin is known as a highly volatile asset. This feature is also what makes it very attractive to market investors and business people in the finance and technology world. Since its value can rapidly hit extreme highs and lows, a lot of people see it as a good option for market investment. Aside from this, a lot of crypto enthusiasts also see it as a reasonable means of value storage and preservation of wealth.
Get started with bitcoin
These are just some of the many notable benefits of using bitcoin over fiat currencies. There is a lot more that this leading and financial system-changing asset can offer.
Are you interested in entering the fascinating space of bitcoin? Get your free bitcoin wallet from us! Jumpstart your cryptocurrency journey by creating an account on Paxful. Explore suitable offers, earn passive income with our affiliate program, and learn more about bitcoin and its uses.
Check out the links below to learn more:
- Practical Ways to Make Money with Bitcoin in 2020
- Different Ways to Use Bitcoin
- Smart Tips for Buying and Selling Bitcoin