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Even though it is gradually getting around, many people are still not familiar with the positive aspects of the cryptocurrency Bitcoin. Transactions away from the classic banking world or the stock exchanges are not trusted by some investors. The reason is the many rumors about possible dangers and risks of abuse of digital currency. The objective truth, however, looks different, more positive. There are a number of important advantages of Bitcoin, which we present to you in a compact form at this point.
Point 1: Transparency and Independence of Bitcoin
The Bitcoin system was limited from the beginning to a limited number of coins. A maximum of 21 million units should ultimately exist and be in circulation on the market. Currently, the quota worldwide amounts to about 17 million Bitcoin. Anyone who invests here knows that it cannot be “mined” endlessly. Mining or “digging”, by the way, refers to the process of creating new bitcoins within the blockchain. Since the Bitcoin start, the blockchain has been reproducing all transactions and serves as confirmation via other users for the correctness of executed transfers. Bitcoin users arrange themselves internally and decentrally within the system, without authorities or banks being able to exert influence.
Point 2: the Decentralization of the Bitcoin Universe
The term already appears briefly under point 1. Decentralization here means that the Bitcoin system – more precisely the blockchain – cannot be assigned to a specific location as a central database. Unlike the normal banking system, in which the control function is the responsibility of (central) banks, control over the payment model lies in the hands of all participants in the blockchain. Once again, this ensures a maximum of transparency. Decentralized in the sense of independence also means in the context: No bank is involved in the transaction execution. Here the term “peer-to-peer” (P2P) is used. A user of the system transfers data or coins directly to other users.
Advantages of Bitcoin: Users Can Do without other Financial Service Providers
In addition to the abbreviation “P2P”, you will often encounter the credo “Be your own bank” in explanations about Bitcoin. This refers to the aforementioned independence from the banking system. This ultimately also affects the costs for transactions. In addition, Bitcoin payments can be made around the globe across national borders. In addition to the limitless usability, you as a user also benefit from the very fast processing of your transactions. Furthermore, the transaction costs in the blockchain, especially for international transfers, are significantly lower than the fees of most other payment options.
Point 3: Value Creation and Trust in Bitcoin
It is particularly positive here that entries in the order book (where all transactions are recorded) are largely forgery-proof. A system that, like normal currencies, is dominated by a few is much more vulnerable. The Bitcoin blockchain is commonly regarded as “unhackable”. “Indestructible” is another attribute that is often attributed to the world’s first digital currency. New coins are generated by members of the blockchain themselves up to the stated upper limit. Despite current efforts to regulate crypto, states have no way of influencing this. The fact that the blockchain functions “independently of banks and states” ensures several Bitcoin advantages.
Bitcoin not susceptible to risks such as inflation & interest rate corrections
The independence makes Bitcoin, like the majority of cryptocurrencies as a whole (apart from so-called stablecoins), unsusceptible to the consequences of political or economic crises – a keyword: inflation rate. Bitcoin as such also remains unaffected by central bank interest rate targets. However, the past has shown that Bitcoin is particularly interesting for investors when other asset classes such as stocks promise little return. In conjunction with secure crypto logging, the comprehensible Bitcoin concept is for good reason increasingly convincing not only real “tech nerds”. Many normal Internet users worldwide are also increasingly convinced of the Bitcoin advantages and the qualities of the current number one on the market. Important for cautious beginners: Large investments are not necessary at the beginning. For the first test, you can also buy small units of Bitcoin and store them in your new wallet.
