The 5 biggest benefits of bitcoin
*This article was originally posted in 2019 and was updated in March 2023.
For many, bitcoin is more than an excellent investment; it is one of the most incredible advances in financial technology and has numerous benefits.
Whether you are looking for an investment, an alternative payment method, or a secure way to store your money, bitcoin has something for everyone. Here are the five most significant advantages of using bitcoin.
The technology behind bitcoin makes it one of the most secure ways to transfer and store funds. The bitcoin blockchain is immutable, meaning it's built so all transactions are permanent and can never be changed or tampered with in any way. Additionally, each transaction recorded in Bitcoin's blockchain must be cryptographically verified to ensure that people trying to send payments actually own the bitcoin they are trying to send, eliminating the possibility of bounced payments for insufficient funds.
Additionally, with bitcoin, you have the (highly-recommended) option of storing your BTC in a hardware wallet. This particular type of digital wallet keeps your coins offline in a secure device that resembles a thumb drive. These wallets are so secure that if you happen to forget or lose your passwords, you may totally lose access to your coin, so be sure to write your passwords and phrases on a piece of paper stored in a safe location.
When using a bitcoin wallet, you are assigned two strings of numbers and letters referred to as a public key and a private key. Essentially, the public key is the address to your digital wallet. If someone wants to send you BTC, you share your public key with them, so they know where to transfer the funds.
On the other hand, your private key is something that should only be known to you. If your public key is your digital wallet address, your private key is your top-secret signature because it uses a sophisticated form of cryptography that ensures that no one but you can access your bitcoin.
Overall, bitcoin is one of the most secure methods of storing and sending money. If cared for properly, your crypto will remain safe from hackers, computer viruses, and nefarious actors of all kinds.
The components of bitcoin that make it secure also make it incredibly private. Bitcoin is not entirely anonymous because all transactions are on a permanent public record accessible by anyone at all times. Instead, it is pseudonymous, meaning the blockchain uses cryptography to mask your identity when making transactions. Cryptography makes it virtually impossible to link your identity to a transaction directly.
However, privacy levels depend on whether you are using a third party to purchase and sell your bitcoin. Many third parties like cryptocurrency exchanges and online digital wallet providers require you to submit identifying information when setting up an account. You may have to share your name and phone number in addition to potentially having your IP address linked to your account.
3. Financial freedom
Bitcoin allows you to become your own bank. Traditional banking is costly and inconvenient for many people due to high opening costs, exorbitant transaction and maintenance fees, long travel distances, and excessive paperwork. Bitcoin eliminates many of these obstacles by providing easy access to financial services by lowering costs, making it easier to open accounts, and making those accounts more usable.
For those without access to bank accounts, converting your cash into bitcoin or another digital currency means you can pay bills online, send money to friends and family at a low cost, and so much more. However, it is essential to keep in mind that, unlike traditional banks, there are virtually no fail-safes to protect you if you make a mistake. Bitcoin allows you to be your own bank, which includes the responsibility of keeping your funds secure.
4. Fast, affordable, and easy cross-border transactions
If you've ever tried to send money to loved ones abroad, you know how time-consuming and inconvenient it can be. Standard wire transfers and remittances can take days and be quite costly. Using bitcoin or other cryptocurrencies, you can send money to anyone anywhere in the world within an hour for around $13.
Using a traditional banking or international remittance services service usually requires a bank account. But, if you're using bitcoin to send money abroad, you don't need a bank. All that's required to send cryptocurrency is an internet connection and digital wallets for the sender and the receiver.
5. Hedge against inflation
Bitcoin is decentralized and is not controlled by central banks in any way. When the Federal Reserve increases the United States' money supply, bitcoin is not affected while the U.S. dollar value decreases.
Unlike the dollar, bitcoin is designed to have a cap. There will only ever be 21 million BTC in existence. This scarcity is why many consider it a hedge against inflation. As the dollar weakens and demand for bitcoin grows, the price may continue to increase because bitcoins will be harder to obtain.
Bitcoin is for everyone
These are only a few of the advantages of transacting with bitcoin (and other cryptocurrencies). If you are interested in buying bitcoin, you can do so conveniently and quickly using a CoinFlip by Olliv ATM.
Do you want to learn more about cryptocurrency? We have plenty of resources for you at Olliv. To begin, check out the information on our Intro to crypto page.