The influence of Bitcoin on the world economy has grown over the past few years. At some point, some even feel Bitcoin was doomed to fail within a few years. Yet, its antifragile nature means it only benefits from the adverse publicity it has been given and there are several ways through which it has impacted the global economy.
Bitcoin was given a lot of attention when its price rose rapidly from around $572.3 in 2016 to approximately $4,764 in 2017. It amounts to about 64.02% of the entire value of all cryptocurrencies as of March 2019 with over 7.3 million active members. This shows how powerful it is as a cryptocurrency.
Bitcoin is built to significantly alter the current financial system and remove any form of financial intermediaries. It is considered by some as an option that can replace the global financial system. The government, the banking system, several investors, and other related entities have all taken a keen interest in this cryptocurrency.
How does Bitcoin fair in the Global Economy
Bitcoin is designed with several features that authorized money, and other conventional currencies don’t possess. This is the reason it has a significant impact on the global economy. It has been referred to as digital currency for certain reasons.
Furthermore, there are some unique features Bitcoin possesses that could enhance economic growth and present a revolutionary global financial breakthrough. These include:
- Tight security
- Easy storage
- Total anonymity
- Methods of payment.
These features are what make Bitcoin different from other cryptocurrencies and they make Bitcoin worthy of the hype. There are tools that enable funds are stored easily. Example is bitcoinsystem
The Impact of Bitcoin on The Global Economy
Bitcoin has proven that it is here to stay and is already having a big impact on the global economy. There are several impacts it’s had on the economy worldwide. A few of these are discussed below:
It has led to a shift in Global Investments
There are several investors, all around the world, that have grown interested in cryptocurrency, most especially Bitcoin. Some experts have even predicted that an unlikely collapse of Bitcoin will lead to a global financial ruin. Yet, investors eventually see cryptocurrency as a hedge against inflation.
It eliminates the need for a third party
Bitcoin was built to ensure a peer-to-peer form of electronic transaction among members of the network without the need for a middleman. Transactions are simply verified and approved in a decentralized manner.
This, particularly, has made the banking system very nervous since it does not require their service.
Bitcoin enables more overseas transactions
In countries with weak economies and poor banking systems, Bitcoin provides them a good platform to engage in the global economy. Through this, individuals that reside in less developed countries have an opportunity to participate in online transactions. All that is required is a digital wallet to enable easy transactions anywhere across the globe. Bitcoin transactions are very fast, transparent and secure.
It has reduced the level of dependence on Fiat money
One of the features of Bitcoin is its sovereignty. It is free from every economic or political issue that can affect other conventional currencies. Bitcoin is designed as an alternative to fiat money. The shift in attention to the former has reduced the reliance on the latter. In many cases, people prefer digital transfer since it is fast, convenient and secure.
The level of sovereignty and decentralization Bitcoin has are what makes it such a popular network. The fact that the government has no control over it makes them fear it. In fact, some countries have made different kinds of approaches towards banning Bitcoin with different regulations. In stark contrast, some countries – including Australia, USA, and Canada – accept it as a means of payment.
Bitcoin has proven itself not only as a decentralized network of transactions that removes the necessity of issuance of currency by a centralized entity but also as a means through which a new market emerges where there is no complete authority or control by anyone. From the constant regulation placed on it by several governments to the extent to which it reduced the reliance on fiat money and the level of freedom it gives its members, Bitcoin has a great influence across the globe that can only keep growing.