- Jul 27, 2021
Cryptocurrency has taken the fintech world by storm. This decentralized system, which means that it’s not controlled by a single entity, revolutionized the industry by giving users full autonomy over their finances. The process bypasses middlemen, such as brokers and banks, through a secure peer-to-peer approach.
One of the top benefits of cryptocurrency is that it reduces the cost of money transfers because you don’t have to pay other companies for their services. The system has also proven to be secure through end-to-end encryption and other safety measures.
Bitcoin (BTC) is perhaps the most well-known cryptocurrency today. It has established itself as a reliable means of exchange. That’s why the digital currency has garnered thousands of users globally. If you’re in the North American region, here’s a guide on how to buy bitcoin in Canada.
With constant advancements in technology, Bitcoin has grown even more exponentially in recent years. Here are some of the reasons:
1. Adoption as payment
As mentioned above, the digital currency has become a viable means of exchange. The first real-life transaction, where BTC was used as payment for pizza, was in 2010. These days, a growing number of companies have confirmed that they’re accepting BTC in exchange for their products and services.
PayPal, a global online payments system, has also entered the cryptocurrency market. Users can now buy, sell, and store BTC and Bitcoin Cash (the former’s altcoin) in their account. Since PayPal is a leading company in the fintech industry, this development will definitely pave the way for more people to trust and use cryptocurrency.
2. Transformation to a safe haven asset
Now that many people are starting to view BTC as a viable medium of exchange, there have been lots of apps and digital wallets developed to store these coins safely.
The cryptocurrency is also being eyed as a safe haven asset, falling along with the ranks of precious metals and stocks.
While the price of BTC was relatively volatile, its value has stabilized a bit since the past year. It’s natural for assets to go through turbulent times, primarily since their worth relies heavily on the perceptions and attitudes of traders and investors.
Nonetheless, now that the cryptocurrency has overcome that stage, it can be a long-term store of value that you can leave to your children and their children. Moreover, at the rate that BTC is growing, this digital asset will most likely rise higher in value in the future, making it even more appealing.
3. Acceptance as an Institutional Investment
In today’s social and economic climate, especially amidst the pandemic, there’s an increasing incentive to go cashless. This way, you can, at least, have a hedge against volatile market swings.
BTC is being considered as a safe haven asset and, thus, a more solid store of value. It’s no wonder that businesses are converting their cash into digital currency. Several companies have implemented this strategy, and many more may follow suit. This can lead to even more growth for the cryptocurrency.
Despite advancements in technology, it is however important to note that BTC’s core systems haven’t changed. These are the main elements involved in using this cryptocurrency as a payment method:
It’s a shared public ledger that checks the balance of a BTC user. This way, the system verifies that they have the right to give away their coins since it’s their possession. The blockchain’s integrity and order are strengthened and secured with cryptography.
Private keys are pieces of data that are used to sign transactions, which refer to the transfer of coins between users. These keys are confidential and provide mathematical proof of the owner’s wallet. They also contain signatures to ensure the security of transactions and prevent alterations once the transaction has been processed.
Each deal in the BTC system is made public and can be completed within minutes. Mining confirms the transactions and adds them to the blockchain, which follows a chronological order. This way, the system can trace the BTC that has been spent by users to verify new transfers.
Blockchain, private keys, and mining work together to ensure the security of transactions in the system. This is why BTC is a safe payment method and is being utilized by thousands of users.
More and more people have witnessed the benefits of using Bitcoin as a payment method. After all, you can also save money by skipping hefty bank fees when transferring funds to someone else. Now, the trend is shifting toward maximizing BTC as a long-term store of value and viewing it as an investment, rather than merely a medium of exchange.