In its initial phase, Bitcoin was written off as a failed attempt at being an alternative to fiat currency. It got a lukewarm response from financial experts, economic scholars, traders, and investors. The association of Bitcoin with criminal activities further hampered its future prospects. However, there were many who believed in bitcoin payments and its ability to revolutionize the global economy. Even if the stakes for Bitcoin were low, it did not completely disappear from the global scene and finally, after a tough 8-9 years, it did manage to break through and surge ahead.
Decentralization: the core of Bitcoin
Bitcoin Is based on decentralized blockchain technology and was created to redress the drawbacks of the traditional fiat currency-based global economy.
The principle of the decentralized blockchain is that all financial transactions will be conducted without the presence of a regulatory central authority. The Bitcoin owners will themselves be responsible for the verification of all transactions.
5 main reasons for Bitcoin’s immense growth prospects
- Bitcoin is easily accessible to all
In the earlier days, to own a Bitcoin, you had to mine it. Mining involves a complex process wherein you have to solve a difficult mathematical problem and the first person to do so is awarded a Bitcoin. You need an appropriate infrastructure of computers to enable you to solve the algorithm.
In recent times, several crypto exchanges and brokerageshave come up that has made Bitcoin easily available to everyone. You need to open an account with a reputed exchange. After the verification process, you are allotted a wallet to store the Bitcoins. You can start trading right away. You can check out different payment methods that are available, and there are many other popular options that are available apart from PayPal, and these are Venmo and CashApp.
Several crypto trading apps like Bitcoin Era also help traders and investors to buy Bitcoins and convert them into profitable ventures in the crypto market.
- Bitcoin trading is cost-effective and faster
Bitcoin transactions are minimal and include no taxes to be paid to any governing body. The verification fee charged by miners is not much. However, if you buy the cryptocurrency from an exchange, it is best to know beforehand the fees that they will be charging for each transaction. In fiat currency, the fees for internal and international transactions vary. If there is a rate of inflation which is reduced by half and the stock-to-flow ratio gets doubled, then also you will have more benefits in terms of Bitcoin trading.
All Bitcoin transactions happen in a matter of minutes as opposed to the traditional money transactions that can take days. Bitcoin trading occurs 24X7 which eliminates the waiting period too.
- Bitcoin is safe
As mentioned above, Bitcoin is based on decentralized blockchain technology. All transactions once verified are added to a block or ledger that is accessible to all the nodes. This block when full is shut, time-stamped and linked to the preceding block. As opposed to other types of crypto, when you invest in Bitcoin, you need to check out the safety and you will find that it is safe from every aspect. Unauthorized alteration attempts are easy to identify.
- Bitcoin resists inflation and is a good hedge against inflation
The number of Bitcoin is capped at 21 million coins. This limited supply enables Bitcoin to resist inflation. Fiat currency is susceptible to inflation. High inflation can cause the value of your financial asset to decline. This has encouraged investors to diversify their assets into cryptocurrency besides stocks and bonds.
- Phenomenal market growth rate
Bitcoin has been the best-performing asset in the last few years. From having no value in 2009 to a trillion-dollar market today proves that it is the fastest-growing market. With favorable predictions, it is expected to surge ahead.This has created immense excitement among traders and investors alike. Governments too are acknowledging the impact of Bitcoin on the global economy and are legislating new guidelines and laws to adapt to the changing times.
The above-mentioned factors have helped Bitcoin to carve a niche for itself in the global financial scenario.This has given Bitcoin a great scope for its increased growth in the coming years. Check the current volatility in the market and then invest accordingly.