Advantages of bitcoin

0 7
Avatar for abdulrehmanoo
3 years ago

Global : It does not belong to any state or government and can be used worldwide, regardless of geographical and political barriers.

  • Foreign to the fiduciary system : you cannot create debt with it, its value does not depend on an intervention of a central bank.

  • Issuance limit : the decreasing and predictable increase in the money supply, allows you to improve the purchasing power of users.

  • Divisible currency : currently it can be used with up to 8 decimal places although there is no limit so that in the future more decimal places could be used.

  • Real-time transactions : the transaction can be completed in less than an hour.

  • Irreversibility of transactions : there is no third party in the middle who can reverse a transaction. Anyway, there are services that guard the bitcoins until the party that receives them has fulfilled its part of the agreement.

  • Impossible to forge : as defined, you cannot build a fake bitcoin or double-spend without being detected by the network.

  • There is no regulator : no committee of "experts" controls the fate of bitcoin . There are rules previously established by the protocol devised by Satoshi Nakamoto that whoever wants to use bitcoin must freely accept .

  • Anonymity : no one is required to reveal their identity which makes bitcoin especially useful for use in countries where totalitarian regimes rule.

  • Cheap : bitcoin has lower transaction costs than using credit cards, transfers or Paypal. Making a payment with bitcoin eliminates unwanted intermediaries.

  • Safe : Bitcoin has a strong cryptographic backing that protects it from counterfeiting and can be stored in multiple locations simultaneously. The technology behind the bitcoin protocol is several times more secure than that used by banks and credit cards.

  • Transparency : all transactions are recorded in a freely accessible register.

  • Micropayments : given its divisibility and low transaction costs, it is an ideal currency for making micropayments.

  • It works 24 hours a day : for bitcoin operations there are no hours or holidays.

  • It accumulates in a very small space : a huge fortune could be saved on a USB memory, which can be saved or moved without depending on third parties

    Disadvantages of bitcoin

  • Emission limit . Although it is positive to avoid the loss of value, the fact that it is deflationary could encourage its accumulation and therefore, as the Nobel Prize in Economics Paul Krugman says, it  could depress the economy.

  • Volatility : since its creation it has had large price increases. 2013 started it at 10.2 EUR / BTC and closed it at 579.9 EUR / BTC, reaching close to 900 EUR / BTC, which makes bitcoin an attractive currency for speculation. Over time, it is normal for the percentage of variation to decrease and have a more stable price.

  • Guarantee of acceptance : although there are more and more establishments that accept them, they are still a minority. It is used mainly by feelances and for the acquisition of computer equipment.

  • There is no regulator : the lack of support behind governments and central banks for many can be a clear disadvantage since they would feel more comfortable with the support of a regulator.

  • Anonymity : as in the previous point, the enormous advantage of anonymous transactions is a disadvantage for many who fear that it will be used for illegal activities and for not complying with tax obligations.

Regardless of its greater or lesser acceptance, as long as it allows doing business, that is, there is someone who accepts it in exchange for goods or services, it will be a useful currency.

1
$ 0.00
Avatar for abdulrehmanoo
3 years ago

Comments