We are witnessing what is potentially the single biggest advance in the history of money. If you are still not sure what bitcoin is or why you should care about it, here is a quick intro to get you started…
During expansion of any new worldwide phenomenon, especially in tech, there is a point when most people are vaguely familiar with the term but majority don’t really know what it is. We are now at that point with bitcoin. If you are, like many people, usually annoyed by another useless thing people are going nuts about left, right and center — here is 7 reasons why bitcoin is different and why you should actually start using it, both for your own benefit and to make this world a better place.
1. Bitcoin is not limited by country borders
Being an internet based currency, without a central point of control, bitcoin is accessible anywhere where there is Internet. You can send it right now using an app on your iPhone to a person in Africa using an internet browser on an old PC.
If you ever had to send or receive money internationally you know that it’s both complicated and expensive, often costing as much as 10% of the transferred amount. Bitcoin transfer, on the other hand, costs from nothing to symbolic and is as simple as making a few taps on your phone or a few clicks on your computer.
2. Bitcoin can be exchanged for dollars or other currencies at any time
There is now a rapidly growing number of exchanges, both online and offline, where you can quickly and easily exchange your bitcoin for other currencies or vice versa. Depending on your country of residence, this may be more or less easy to do, but let’s say that USA, half of Europe and many other countries have fully functional, legal online exchanges and bitcoin ATM booths wich make it easy as a breeze, while in most other countries you can do it by directly dealing with other people who buy or sell bitcoin (there’s a website for that).
You can also directly ask people who have bitcoin (including myself) to sell you some. Since they already have an easy way to obtain bitcoin, they will most likely happily assist you, usually at the normal market rate. Their motivation is not to earn on you buying bitcoin but to have more people start using it. Please do use common sense and deal either with people you know well or use a trustable escrow service (such as abovementioned LocalBitcoins.com).
3. Bitcoin’s value increases over time
Since there is only a limited number of bitcoins (21 million) that can ever be calculated, or put into market, and since there is an ever increasing number of people using and trading the total amount of bitcoin — the value of each bitcoin can only go up as more and more people are using the currency.
To give you a picture — value of one bitcoin in Januray 2011 was less than half a US dollar, then a year later it went up to $6, followed by $15 in January 2013. As of this writing one bitcoin is worth around $440. Now, don’t imagine a straight line upwards, it has its ups and downs as is natural for a currency in its infancy but the zoomed out picture over a longer span of time is very clear — this thing is going up exponentially!
And it’s not really a few thousand enthusiasts playing with their monopoly money — it’s a 6 billion dollar market of people using this new innovative currency to book hotels over Expedia, buy computers at Dell or shop at Overstock. Even Paypal, the online payment giant, recognized bitcoin and will support it through its payment system starting in second half of 2014.
To give you another picturesque example: if you had bought 500 bitcoins in January 2011, paying a total of $150 for them, today you would be able to sell them for $220,000 (and that’s not a typo).
This is an exciting paradigm change with regards to money, spending and saving. This means you will feel motivated to save money, and when you buy products you will want to buy high quality products that will last a long time. It has a potential to end this ridiculous consumer machine we have in our world as it is now, where we keep buying ever cheaper and shorter lasting products made in China with planned obsolescence for we can’t see the appeal in saving money since it keeps losing its value. Bitcoin may not be the silver bullet for it all and people will not become smarter because of it, but it’s good enough as a step in the right direction.
4. Your government cannot “print more” of bitcoin thus making it lose value
To sustain the superficial impression that things are OK in a country’s economy, governments print money. Having more and more money in circulation decreases its value — which we call inflation.
There are also other things that governments — or business entities that control them — will do with country’s currency in order to manipulate economic situation to serve their interests. One well known example is times of economic expansion followed by recession that are artificially created to serve financial interests of entities that control the currency.
This is most obvious in the US economy where the currency governing entity is actually not even the US government but a private entity deceptively named Federal Reserve. This is not conspiracy theorizing, you can easily find loads of info on this subject, and even confirm that FR is a privately owned entity on its own website. Details of this, however, are not the scope of this article — bitcoin is — so let’s see how bitcoin is better in this regard.
Because bitcoin is a non-centralized currency and has no single point of control, there is no entity that can manipulate it to serve the interests of a small group of extremely wealthy people. How does this work? The whole bitcoin system is based on a P2P protocol, where a network of participating computers confirms all transactions as well as creation of new bitcoins. To save you from confusing tech details, this means that no single point in the network can make any decision on its own. If you send 1 bitcoin from your account to another person’s account several confirmations across the bitcoin network will be required to confirm this transaction.
Also, the whole system, by its design, cannot create more than 21 million bitcoins. Ever. This means the bitcoin economy is real, natural, 100% market ruled and no one can tweak the system to their own advantage. It’s genius. It’s future. And we live in it!
5. Bitcoin is ideal for micro-transactions
Since transaction fees are extremely low or sometimes nonexistent, and because of being border agnostic, bitcoin lends itself perfectly to all kinds of donation payments, expense sharing between friends, crowdfunding, etc.
Setup a wallet in a few quick & easy steps with one of the major online wallet providers (such as Coinbase or Blockchain) and you’ll be all set to receive and send bitcoin payments in a matter of minutes.
6. Investors are already all over bitcoin
In 2014 alone (and it’s not even over yet) there has been a flood of venture capital investments into bitcoin businesses — almost 100 million USD so far. This is a strong signal that bitcoin is here to stay. As infrastructure grows, the usability of bitcoin will increase and more people will recognize it as a useful currency. Coinbase ($30M+ VC funding) has just recently expanded its operations into 13 European countries, more to follow. Several companies are fighting to gain dominance in the ATM sector. Countless companies are working on providing exchange solutions. It’s a blossoming industry with many bases not covered yet, and if you can take a piece of the cake, sooner is better than later.
7. It’s ridiculously easy to setup your business to accept bitcoin
If you ever had to go through the process of opening a merchant account for your online or offline business or even just inquired about it only to get a headache, you will be blown away by the simplicity and speed of setting up your bitcoin merchant account. I did it in less than 5 minutes and, honestly, I could not believe it was done. If you have a business, start supporting bitcoin now and join a rapidly growing number of worldwide businesses (from small local coffee shops to multinational corporations such as Dell Inc.) that already accept bitcoin as a form of payment.
You can open your merchant account with many providers but the most popular ones seem to be Coinbase and Bitpay.
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Share your thoughts on bitcoin on my Facebook page or ask if you have any questions. I’m excited about bitcoin and all the possibilities it brings (obviously) and am happy to share all I know about it. To learn more, you can start with this video:
short video intro by weusecoins.com
Goldmund Lukich is an author, entrepreneur, father and a yogi. In his upcoming book he is dealing with subjects of material abundance and patterns that prevent us from manifesting it.
Read free chapters from the upcoming book, interact with author directly, ask questions about bitcoin, or preorder the book on Goldmund’s Facebook page or website materialabundance.com
Hero image credit: screenshot from Coinbase, copyright belongs to them.
