Gone are the days when plain, old employment was the only source of income for many individuals. Today, people can dive into numerous investments that can help them earn money passively. With in-depth research, awareness, and proper use of strategy, you can significantly increase your net worth by going into investments.
Cryptocurrency is one of the hottest forms of investments today. But, as with any type of investment, cryptocurrency has its own pros and cons. In this article, you’ll learn more about the most popular form of cryptocurrency in the market—the Bitcoin—and take a look at what it has to offer.
What Is Bitcoin (BTC)?
Bitcoin, abbreviated as BTC, is a form of cryptocurrency created in 2009 by an unconfirmed identity using the pseudonym Satoshi Nakamoto. As a form of cryptocurrency, Bitcoin doesn’t exist tangibly but is kept in a public ledger powered by blockchain technology. As of February 2021, the value of Bitcoin has reached whopping USD$50,000.
The current number of Bitcoin users will surprise you more. While it’s impossible to accurately determine the global Bitcoin user population, this 2019 report indicated that 9% of the world’s population owned Bitcoin, dominated by individuals between the ages 18 to 34 with 18%.
As mentioned earlier, cryptocurrency poses many advantages and disadvantages to its users and investors. Here are five important advantages you should look forward to when investing in Bitcoin:
1. Reputation And Authority In The Crypto World
Since its inception in 2009, Bitcoin has had a steady reputation in the cryptocurrency world. This is because cryptocurrency, in general, is known as a trusted form of investment, that even financial institutions like the best Bitcoin IRA companies are integrating cryptocurrencies into their system.
Additionally, Bitcoin is the backbone of other cryptocurrencies as it started the cryptocurrency movement in 2009. Without the invention of Bitcoin in the whitepaper, cryptocurrencies such as Ethereum (ETH), Ripple (XRP), BinanceCoin (BNB), and the like wouldn’t have existed in the first place.
You’ll immediately see with a quick internet search that most websites will recommend Bitcoin as the best cryptocurrency to explore and consider investing in.
2. User Autonomy And Convenience
Bitcoin and other cryptocurrencies are powered by blockchain technology. Essentially, blockchain technology works by listing and recording digital information that’s impossible to cheat, tamper, and modify—all without being handled by a central authority.
When making a cryptocurrency transaction, all information involved in the transaction will be sent to a public network of peer-to-peer computers located in different parts of the globe. Therefore, to confirm your Bitcoin transaction, it will be recorded on every single computer in the blockchain.
By transacting in a distributed ledger that operates in public networks, there would be no need for financial intermediaries like banks and other financial institutions, which grants users utmost autonomy and convenience while investing in Bitcoin. Since the database is up 24/7, you won’t need to wait for hours and days to complete your transaction.
3. Security And Transparency In Transactions
It’s quite ironic how Bitcoin is exchanged publicly worldwide but is still one of the safest and fraud-free forms of financial investments. As stated above, the blockchain technology powering Bitcoin and cryptocurrency transactions is what makes them secure.
Blockchain is a decentralized system of thousands of servers to keep track of all cryptocurrency transactions. If a hacker manages to break into one or a few of these servers, other servers can still fill the gap and continue the workflow. Also, hacking only a few of these servers will be useless, as you’ll need to get into more than 50% of all servers globally, which is impossible.
Moreover, the blockchain technology encrypts data coming in and out of the system, ensuring that every Bitcoin user's address, identity, and location is safe from prying eyes.
4. Higher Returns On Investment (ROIs)
Cryptocurrency is one of the few investments regarded as having the highest potentials for yields and returns. However, take note that high rewards stem from high risks. If you’re comfortable with risking a considerable amount in your investment portfolio, Bitcoin is a promising investment to dip your toes into, but this doesn’t automatically make you earn more returns. You’ll still have to exert the right effort and utilize strategies in trading cryptocurrencies.
5. No Additional Banking Fees
Since cryptocurrencies like Bitcoin are the total opposite of fiat currencies and aren’t managed by any financial institutions, you won’t need to worry about paying hefty banking fees for each transaction. Most cryptocurrency wallets allow the owners to set their own fee limits when spending, and they won’t be deducted a fee when receiving Bitcoins.
Ideally, it’s best to start investing in Bitcoin if you’ve had a fair share of experience in other forms of investments, and have built enough financial cushioning in case of unforeseen losses, which isn’t outside the equation in the cryptocurrency landscape. If you’re ready to risk a lot of your money in Bitcoin investments, winning its rewards is indeed financially fulfilling given the advantages discussed above.