Which Problems Can Bitcoin Solve?

Businesses and consumers worldwide are increasingly adopting cryptocurrencies. Bitcoin is the undisputed crypto industry leader. Various real estate, manufacturing, travel, and retail merchants currently accept Bitcoin as payment for goods and services. Investment firms, financial service providers, and traders are increasingly accumulating Bitcoin reserves to diversify their assets.

Unlike the conventional currencies, Bitcoin and other cryptocurrencies facilitate instantaneous, more secure, and low-cost transactions. Besides, being decentralized means Bitcoin is not bound to the government or institutional influence. Those unique characteristics make Bitcoin seem like a more convenient and safer option for cross-border payments, increasingly attracting new users from all over the world. The following are some of the main problems that Bitcoin can solve.

Inaccessibility to Banking Services

There are around 2 billion people worldwide without access to banking services. That makes it extremely difficult for those populations to receive financial assistance, excluding them from the global economic platform. That is why most people, especially in the developing economies, have remained poor for decades.

Bitcoin solves that problem by allowing users to transact without bank accounts. It’s a peer-to-peer currency that anyone can send and receive money worldwide without going through any bank. It doesn’t require a bank account or any complex registration procedures. Instead, you only need a smartphone or computer and internet access to transact in Bitcoin.

The web offers several links to reputable crypto exchanges like The News Spy System where businesses and individuals can easily create digital wallets, buy, sell and store Bitcoin.

Inflation

Fiat currencies are centralized, meaning they are subject to government and institutional influence. That makes them inflationary since the central banks may decide to print too much money, significantly reducing purchasing power.

On the other hand, Bitcoin is a decentralized currency with a limited cap of 21 million tokens. Miners have created about 18 million Bitcoin tokens, leaving only 3 million more to hit the market cap. Bitcoin’s decentralization makes it a deflationary currency, meaning no authority can censor it.

Bitcoin also has a halving process, reducing the rewards issued to miners by half every four years. That induces Bitcoin’s scarcity, further increasing its value. As with free markets that fluctuate based on supply and demand, the increasing demand for an item with a fixed reserve, like, Bitcoin surges the unit price, allowing it to retain its purchasing power.

Accountability in Financial Transactions

Cash payments, bank and credit card money transfers are often subjected to various accountability issues. One reason is that conventional institutions rely on third parties to process most of their transactions. Besides, they also operate under unique regulatory frameworks, constantly subject to outside intervention.

Bitcoin facilitates more secure and transparent transactions without third-party involvement. Its underlying blockchain technology verifies, confirms, and compiles all transactional records on a digital shared ledger. That means users do not even have to keep separate records of their Bitcoin transactions since they can access the database anywhere at their convenience.

The ledger is irreversible after the blockchain validates the transactions, offering a reliable and accurate record of money exchanges between parties involved.

High Costs of International Remittances

Experts project the remittance market will hit $2 trillion in the next few years. An estimated 20% of that wealth gets lost in transaction costs and commissions for intermediaries and mediators, contributing to a heavy financial burden on customers. Bitcoin transactions exclusively occur virtually, without any third party, resulting in relatively lower transaction fees for all cross-border remittances.

Bitcoin undoubtedly solves a wide range of problems, including the inaccessibility to banking services, inflation, accountability, and high costs of international remittances. We expect Bitcoin to solve several other issues outside the financial world as its development and adoption continue.