Unless you’ve been trapped in a nuclear shelter, it’s kind of impossible that you haven’t heard about cryptocurrencies and all the repercussions that Bitcoin’s recent appreciation has had.
Well, thanks to this, a new chapter has opened when it comes to digital money and, nowadays, there is already a whole market focused on this type of currency, even with options to even invest in Bitcoin.
As we know that cryptocurrencies, especially Bitcoin, represent the future when we talk about money, in this text, we will show what are the advantages of this investment. Check out!
How does Bitcoin work?
Bitcoin is not a seven-headed bug, believe me! In general, it is a virtual currency that can be used to carry out business operations. Created by Satoshi Nakamoto in 2009, it is a kind of code. Its main feature is the fact that it does not exist physically – only in the digital environment – and uses cryptography, both to be mined and to validate its transactions.
Bitcoin works on an open network called Blockchain, a kind of ledger in which everything that happens with the currency is registered and can be accessed by any user, but not modified.
How is it produced?
Bitcoin is produced through the mining process. To be more specific, in order for operations to be validated in a secure manner, someone must supervise the entire process. That person is what we call a miner.
He is a regular user who will monitor the transaction to see if everything is going well. This person does not do this service for free, he receives Bitcoins in exchange which, as soon as the transaction is confirmed, are transferred to his account.
It is important to make it clear that nowadays to process transactions, more and more computational power is needed. This work is no longer done by people with ordinary computers. For this task, superpowerful equipment is often required to mine a single Bitcoin, such complexity.
Now that you understand how the coin works and how it can be mined, let’s find out what its benefits are. Understand!
What are the benefits of investing in Bitcoin?
1. The valuation of Bitcoin
It is undeniable that, in recent years, cryptocurrencies have seen a huge increase in value, especially Bitcoin, which in 2017 achieved an appreciation of almost 1000%, reaching over $ 8,000. This is a very impressive result and it shows how it is a market that is here to stay and that still has a lot to show.
Even so, it is important to say that one of the characteristics of this currency is its volatility. Nowadays, for example, the currency has lost some of its value and the tendency is for it to stabilize.
2. Cost reduction
One of the great advantages is that transactions with this type of currency tend to be much cheaper than with any other type of money. This is due to the fact that they do not need conventional financial institutions, such as banks or card operators.
Thus, for those who need to send Bitcoins to a friend from another country, for example, the most they will spend is on a tariff for the network’s miners. Depending on the location, the expense amounts to 1% of the transfer amount.
3. The ease of transactions
With cryptocurrencies, transactions can be made on any day and time. This means that all that working day bureaucracy, so well known in traditional operations, does not exist. So, if you need to make a transfer on a holiday like New Year’s Eve, you can do it without problems, as long as, of course, you and the other person have access to the internet.
It may even seem a little strange, after all, Bitcoin is a currency that does not have a central administration or an organ that controls and registers its operations. Everything is done by the users themselves through Blockchain and cryptography.
That sounds a little insecure but, believe me, it isn’t. It is precisely because of this open network system, in which everyone has access and can view commercial transactions, that Bitcoin is able to guarantee its security and prevent the system from being hacked.
In addition to the security guaranteed in Bitcoin transactions, privacy is another advantage that this type of currency offers. It is precisely because of the use of Blockchain that the registration of operations is allowed to be done by private keys.
This way, the two parts of the transfer are protected, since they are the only ones that have the key.
6. Protection from inflation
In general, coin production is decided by a number of issues – often it has to do with the market, sometimes with the political situation. With that, the results can be quite disastrous for people. For example, increasing money production can cause the loss of purchasing power, which increases inflation.
Unlike traditional money, it is very unlikely