If you’re into cryptocurrencies, you’re probably aware that the price of Bitcoin increased several thousand percent in 2017. While there are many speculations about whether its value will continue to rise or eventually fall, there is still one great thing about this currency: it’s truly decentralized. No central authority can decide how to use it, as no government has complete control over its flow.
How It Works
Bitcoin is a digital currency. It doesn’t exist in physical form, and it isn’t tied to any commodity like gold. In other words, Bitcoin might be the closest thing we have to an actual pure currency.
You can use Bitcoin software on your computer, smartphone, or online account to transfer the digital currency from one person to another. The transactions are recorded in a public ledger called a blockchain.
Computers make the coins, and people who use their computers to make coins and record transactions are called miners.
The total amount of Bitcoin that can ever be made is capped at 21 million. Still, because each coin can be divided into smaller units, the actual amount of coins that can exist is much greater than 21 million.
Uses of Bitcoin
Bitcoin was initially often associated with criminal activities such as black market transactions, ransomware payments, and money laundering. However, we can see this narrative slowly fading. Here are other good uses for Bitcoin:
Gambling and Betting
Many online casinos were early adopters of bitcoin because they were looking for ways to make their business more efficient and reduce transaction costs. Many betting websites use bitcoin casino gambling though not all are legal in all jurisdictions.
Internet pokies, for example, is an online casino that accepts bitcoin for poker and other games of chance. Gambling websites are attractive to bitcoin users because many jurisdictions restrict financial institutions from dealing with them.
Sending Money Overseas
Sending money overseas can be a pain. Most countries charge a hefty fee for using their services, and the money is only transferred after a few days.
Bitcoin does not have these regulations. You can send bitcoin to anyone in the world almost instantly, and there are low fees. This makes it ideal for sending money to family and friends in other countries or even paying employees who reside overseas.
Payments for Digital Goods
One of the most common uses of bitcoin is payment for digital goods. These include everything from downloadable e-books to songs, photos, and videos. There are two primary reasons why bitcoin is such a popular method of payment in this category:
- The cost attached to accepting credit cards can be very high. If you’re selling a low-value item, it can be challenging to justify the expense associated with accepting credit cards.
- Digital goods are easily copied and pirated. Bitcoin transactions are tough to copy or counterfeit. As such, they’re ideal for protecting digital goods from unauthorized access or copying.
Buying Coffee/Beer/Food
A growing number of establishments accept bitcoin as payment for food, drinks, and other items. These include restaurants, bars, breweries, and even coffee shops. For example, if you want to buy a coffee in your local neighborhood shop with Bitcoin, there are sites solely dedicated to that.
Donations to Charity
Bitcoin is a great way to support your favorite charitable causes. Many charities accept Bitcoins as donations directly, such as Save The Children and Heifer International.
Credit cards charge high transaction fees, while PayPal often experiences server issues and delays in processing payments. Bitcoin’s transaction fees are usually less than 1% of the amount donated.
On top of that, their employer can match donations sent via Bitcoin, multiplying your donation. With all of these advantages, some charities have created their Bitcoin addresses and accept them as donations directly.
Crowdfunding Campaigns
Bitcoin has found use as an efficient fundraising mechanism. Even though it’s relatively easy to set up a crowdfunding campaign using a service like YouCaring or GoFundMe, still, it can be hard to get donations without a well-established network behind you.
Bitcoin allows easy acceptance of donations from anywhere globally and immediate access to those funds without transaction fees or transfer delays typical of credit cards and other payment methods.
Sharing Economy
Sites like Purse act as intermediaries between individuals who want to buy goods on sites like Amazon using Bitcoins and individuals willing to spend their Bitcoins on purchases from those sites.
In effect, these two users are exchanging their goods for one another’s services. This sharing economy is growing in popularity. Companies like Airbnb make it easy to rent out your unused space and earn Bitcoins doing so.
Summary
There are many, many benefits to using Bitcoin. It can purchase products and services or save money by avoiding credit card fees. It’s a very intriguing and unique alternative currency that has the potential to change the world of finance as we know it, for better or for worse.
