Most cryptocurrency supporters see Bitcoins as the future of international monetary systems. They have a strong belief that a time is coming when financial transactions between nations will be done through Bitcoins. Whether such a time will come is up for debate. However, one cannot argue that Bitcoin is becoming increasingly popular with each passing day. This digital currency is gaining widespread acceptance.
If you wish to know about Bitcoins and the advantages of using them over traditional fiat currency, make sure you read till the end. Before we go on to look at the advantages of using Bitcoins as a monetary system instead of traditional fiat currency, let’s first discuss briefly what Bitcoins are.
What are Bitcoins?
Bitcoins are digital currencies that are not regulated by a centralized authority. It is the foremost cryptocurrency; it was created in 2009. The decentralization of Bitcoins is as a result of the generation of a blockchain. Blockchain is the technology on which it is built.
Advantages of Bitcoins over Fiat Currency
The advantages of Bitcoins over fiat currency are enormous. However, most people don’t know these benefits. To give you a better understanding, let’s look at some of these benefits.
1. Low storage and transfer cost: The storage cost of Bitcoin is low compared to that of traditional banking services. Bitcoin is also better than fiat money when it comes to the transfer of money. Although the transfer charge for Bitcoin has increased as a result of the increase in its price, it still is cheaper than fiat currency.
2. Flexibility transacting cross-border: It is not so easy to carry out cross-border transactions with fiat money. The reason for this is that it has no uniform value. However, with Bitcoins, you can easily carry out cross-border transactions. Bitcoin allows currency movement without any restrictions whereas fiat money is restricted to the borders of the respective countries.
Bitcoins have no central authority regulating it and so, it can be used from anywhere in the world without following any strict regulations or restrictions. There is greater flexibility transacting cross border with Bitcoins than fiat currency.
3. Impossibility to falsify: Bitcoin cannot be falsified. It is not a paper currency like fiat money but a digital currency. Fraudsters can make a fake paper currency but they cannot make a fake digital currency.
Blockchain technology, the technology on which Bitcoin is built cannot be bypassed. Details of every Bitcoin transaction are recorded in it. If you purchase anything, it will be recorded immediately in the blockchain technology. The record of each transaction on the blockchain technology is accurate and it cannot be manipulated.
4. Fast transaction speed: Bitcoins transactions don’t only cost low for transfers, they are also faster. Transfers can be made to almost every part of the world and in nearly an instant. This is better when compared with fiat currency transfers that may take days, depending on the amount, location, and transfer means used.
5. Security and privacy of user’s identities: Bitcoin transactions are kept anonymous. Unlike fiat currency transactions, it does not require personal details such as contact details, name, address, etc. Your personal information will not be known by anyone, not even the party you are transacting with; you also won’t have access to the other party’s information.
Another advantage of transacting with Bitcoin is that it lets its users track all completed transactions within the network. All history and transaction information can be traced and identified via wallet addresses.
The factors mentioned in this guide are just some of the advantages of using Bitcoins over fiat currency. Other advantages include the ease of use and accessibility, zero government interference (decentralized network structure), etc. All of these benefits point to one thing: it may not be too long before we see Bitcoin accepted as the global currency for transactions between nations.