When we discover Bitcoin, we may first ask ourselves the question of the usefulness of having such a digital currency operating on the Internet. After all, we can say that today, with the advances in Fintech and financial services, nothing is easier than using a bank card or making a payment online or in a physical store.
It's true. This is not true for all countries in the world but globally it is true.
In part.
Indeed, thinking that bitcoin is just another digital currency is to neglect its own characteristics. It is a reduction to think that bitcoin is not just a "digital currency" that allows you to pay on the internet. It is much more than that because bitcoin is both a currency and a financial system as such. This is the big difference with other digital currencies.
We will see in this article how Bitcoin is much more than a currency and why it is becoming ever more essential in the future of finance.
Accessibility to all
The first thing to understand is the concept of decentralization. Understand that unlike traditional financial systems which are controlled by centralized institutions such as banks and governments, Bitcoin is not centralized. This means that there is not one company, people, employees who manage Bitcoin.
It is software free open source of access whose operation is maintained by multiple people around the world. In fact, it is a real ecosystem of people with different functions who make Bitcoin "live". This is what the concept of decentralization means. A bit like the Internet, which does not belong to a single entity that would generate and control user access, Bitcoin is used by all the people who want it and who make it work collectively.
Fudiciary currencies by definition are "centralized" and the entities that issue them are called "Central Banks", right?
Decentralization offers several advantages such as the fact that there is no possibility of one entity (or one person) deciding the future of the software for everyone. This also limits potential security breaches. If a server fails, this does not impact the entire network since other servers continue to operate it.
Autonomy and financial freedom
The fact that Bitcoin is built on blockchain technology allows users to manage their own funds, without the intervention of third parties or intermediaries. This means that individuals have complete control over their assets, which is particularly crucial in a world where trust in traditional financial institutions is declining. Since the advent of the “Occupy Wall Street” movement in 2008, which saw protests spread from New York to Athens, the challenge to excessive banking practices has continued to grow. People are increasingly aware of the need for a transparent financial system that is not run by a small group of decision-makers.
With fiat currencies, your money is under the guardianship of a commercial bank that can decide on your financial movements that you can initiate of course but that it can nevertheless refuse. To send funds for example, you ask the bank for indirect authorization to do it for you. Worse still, to have a bank account, you must submit different identity documents to be "accepted" by it. The design of Bitcoin is such that there is no need to send identity documents to have a wallet. Anyone can do it, without asking "permission".
In fact, when you own Bitcoin, you don't ask anyone when you want to transfer your money. You become your own banker. You decide and carry out transactions of your own free will.
Even more, in some countries, governments exercise strict control over the movement of funds and financial transactions. Bitcoin offers censorship resistance because it is difficult (if not impossible) for authorities to block or monitor transactions.
This allows individuals living in authoritarian countries to circumvent the financial restrictions imposed by their government, then enjoying unparalleled financial freedom thanks to bibi therefore 😉
The search for value
Unlike fiat currencies and inflationary cryptocurrencies, Bitcoin has a limited supply of 21 million units. It is especially for this characteristic that it is considered by many as a store of value, similar to gold. This limit is not anecdotal and can be a good safeguard against the galloping inflation which is rampant in certain countries. The issuance of bitcoin works in contrast to traditional currencies, issued by central banks which are subject to inflation, due to the increase in the money supply which can be decided at any time by governments.
However, be careful, this is not to say that the intrinsic value of bitcoin is due to its rarity alone. There are many things in life that are rare and are not expensive or even "valuable" to use an English term that is most appropriate here.
Rather, it is the combination of all its characteristics that make it a unique asset that appeals so much to investors around the world.
A global market at your fingertips
What is practical when using Bitcoin and you certainly know it if you use it regularly to make payments, is the feeling of participating in a global economy. If you have to send money to an Argentinian or a Nigerian, you won't feel the difference. You don't have to do currency conversion because you have a universal currency accepted all over the world (on an individual basis of course).
We must remember that in many parts of the world, access to traditional banking services is limited or even non-existent. Bitcoin offers the opportunity to include unbanked populations by allowing them to create a Bitcoin wallet and access the global market. This financial inclusion can help reduce poverty and boost economic development in these regions. It is not a coincidence whether developing countries are the regions with the highest adoption of bitcoin. Among them, we find India and Nigeria, countries where traditional finance is still failing.
Even more, with Lightning Network (LN) integration, you can pay instantly with minimal transaction fees. Even though the LN network is still under development, it is experiencing an explosion in uses. This helped make Bitcoin much more practical and malleable for everyday payments.
Today, very clearly, it is easier to send money abroad with bitcoin than with any other money transfer system. This might surprise your banker, but it's a fact.
Conclusion: the currency of freedom
Considering the characteristics of Bitcoin, we quickly realize that it is a particular atypical currency that "disrupts" the concept of traditional money and finance. Bitcoin represents a paradigm shift in which the individual regains his sovereignty and financial freedom. It is important to remember that the creation of Bitcoin was greatly influenced by the ideals of individual freedom and confidentiality dear to cypherpunks.
This is also why Bitcoin is increasingly defended by more and more people around the world. For them, Bitcoin allows us to regain our freedom in an increasingly digital and monitored world.
Yes, just that.
