Why Everyone Should Have a Bitcoin Wallet
The average consumer knows very little about Bitcoin and other cryptocurrencies, but that’s starting to change.
13:25 07 September 2020
Just like the Internet had only a small audience of absolute fanatics in the 1990s, only those who are paying attention will understand what a huge difference bitcoin and altcoins could make. Whether they jumped on board with the Internet when it was in its infancy or not, modern investors and consumers need to pay attention. Read on to find out why.
Blockchain Technology Is Catching On
Bitcoin and other cryptocurrencies are based on what is known as blockchain technology. This revolutionary advancement allows a functional currency to exist without the intervention of banks, governments, and financial institutions.
Most consumers are still relatively unaware of blockchain technology and its potential, but it makes little sense to wait until it’s already the next big thing to jump on the bandwagon. Learning the ins and outs of using a bitcoin wallet now will give consumers and investors a foot in the door and help them better understand this technology’s potential.
Portfolio Diversification is great for Investors
Already have money invested in real estate, government bonds, and the stock market? Buying up some bitcoin is a great way to diversify an investment portfolio. Think of it as being similar to buying gold as a buffer against inflation. Bitcoin offers a similar buffer, but it’s much easier to store and faster to sell.
Bitcoin also has the potential to provide an impressive payoff. There will only ever be 21 million bitcoins produced, and many of them have already been lost. If bitcoin continues to rise in value, by the time coins stop being mined just one could be worth hundreds of thousands of dollars.
Bitcoin Is Useful
It’s already easy to buy products and services using bitcoin. All consumers need is a bitcoin wallet and a little bit of cryptocurrency. It’s currently a niche payment option used primarily in the realm of B2B commerce, but that’s changing fast.
Bitcoin is becoming more popular in the realm of international payments. That’s because it can be transferred quickly and easily from anywhere, cutting out the delays associated with transferring fiat currency overseas. Since bitcoin transactions can’t be reversed, there’s no need for companies to implement waiting periods on purchases as they would to avoid credit card chargebacks. They can send out products as soon as they have received payment.
Investors Don’t Need to Bet the Farm
One Bitcoin is currently equal to a little over $11,000, but that doesn’t mean investors need to spend a small fortune to start buying bitcoin. They can purchase decibit, centibit, millibit, microbit, or satoshi instead. The satoshi is the smallest unit of this cryptocurrency and is worth one hundred millionth of a bitcoin. It is used primarily to facilitate faucet rewards and to calculate fees per byte.
While it wouldn’t make much sense to purchase one satoshi, small-scale investors can buy up bitcoin in whatever units they want. This makes it easier for the average consumer to start using his or her bitcoin wallet, making payments, and transferring cryptocurrency to cold wallets for storage.
Independence from Political Systems
Since Bitcoin is a decentralized currency, it isn’t beholding to political influence. Its existence outside any kind of political system makes it harder for governments to seize cryptocurrency funds as retribution for political acts, and there are no concentrated holdings. Unlike fiat currencies, the value of bitcoin cannot be manipulated by governments for political gains. It offers a level of financial independence divorced from global politics that can’t be matched with any fiat currency.
User autonomy is one of the central tenets of all cryptocurrencies. Bitcoin offers consumers and investors far more control over how they spend and hold their money since there’s no need to deal with an intermediary authority. Governments, banks, and other financial institutions play little to no role in the matter. Users can send and receive payments to and from anyone in the world over the peer-to-peer network without external approval.
No Banking Fees
Unlike a traditional bank account, a bitcoin wallet doesn’t come with an entire litany of banking fees. Some service providers charge transaction fees, but there are no minimum balance or overdraft charges, no returned deposit fees, and no account maintenance fees associated with most bitcoin wallets.
Ease of Accessibility
If bank account holders want to withdraw cash, they need to find a local branch or ATM that can perform the transaction. If cryptocurrency holders want to spend bitcoin, they can do it from any Internet-connected smartphone or computer. There’s never a need for traveling to banks or stores to purchase products. As more businesses continue to switch over to accepting bitcoin, this could make life much easier for wallet holders in rural areas.
While it is a myth that bitcoin transactions are completely anonymous, they are not easily tracked back to wallet owners. Unless users voluntarily publish their transactions, they function much like cash-only sales rather than traditional forms of payment that are readily linked to a personal identity.
Consumers shouldn’t take that as a free pass to make whatever disreputable purchases they want with their bitcoin since it can still be traced back to them in most cases. However, security-conscious individuals may rest a little easier knowing how hard it is for outside parties to gain access to their identifying information.
The Bottom Line
Many investors and consumers assume that, if they didn’t jump on the bitcoin bandwagon before the boom in 2017, it’s no longer worth their money. Anyone who’s been paying close attention knows that’s not the case, though. Bitcoin is still in its infancy and will only continue to grow in popularity. It may take a while for mainstream consumers to catch on, but eventually, bitcoin could become one of the most powerful forces in international markets. Opening a bitcoin wallet and learning the basics about how trading, lending, and holding work now is a great way for consumers and investors to position themselves for future success.