Bitcoin is a peer-to-peer (P2P) electronic money system. Bitcoins have multiple features, and they are not just for buying products! Don’t believe it? It prevents the user from various problems, such as the misuse of fractional reserves, the risk of double spending and inflation. As a result, Bitcoin has become the best investment opportunity during the last decade. Therefore, more and more crypto enthusiasts tend to buy and sell Bitcoin in Pakistan, as they have become aware of its core advantages.
In this post, you will know the reasons people are turning to Bitcoin, how it solves problems, Blockchain, and above all, the key advantages of using Bitcoin.
The reasons people are turning to Bitcoin
In the past, to transfer money from one person to another, an ordinary banking transaction needed to be processed by the computers of a bank and even the Central Bank. It means when person A transfers money to person C, there is an intermediary B, the bank, which processes and records this exchange. When person A deposits money into their account, agent B is also responsible for storing, processing, and recording that deposit.
In the case of Bitcoin, this exchange involves just two parties, a sender and a receiver, who sign a transaction. After signing, all of this is encrypted and sent to a large public record of all transactions: the Blockchain. The system also allows ordinary people to provide data processing power to the network using computers, and they are called data miners. There is no central computer; the system is distributed that way.
Indeed, there would be no need for Bitcoin if, in banking transactions, there were no registration errors, fraud, undue charges, etc.
In particular, many people are concerned about their banking privacy, surveillance, and unfair collections. After all, historically, institutions’ decisions can fail, generating unpredictability in the market, inflation, and even bankruptcy.
So, these are the reasons people are turning to Bitcoin.
How does it solve problems?
Remember the double spending problem mentioned above? With billions, perhaps trillions of daily transactions made worldwide, many frauds, thefts, and errors can occur through double-spending every day.
In the case of Bitcoin, sending money from one point to another does not go through a third agent. Transactions, both for receiving and sending money, are stored on the computer of those involved through wallet software.
That way, there is also no risk of your money being manipulated by someone while you are not using it. After all, everything is in your custody, inside your computer’s hard drive!
Furthermore, in several countries, including Pakistan, the value of money in circulation tends to decrease due to the system and people’s failures.
Finally, by using digital currencies like Bitcoins, the rate of issuing new currencies is timed and highly predictable, considerably eliminating the inflation risks.
What is Blockchain?
The time has come to talk about Bitcoin’s technical framework: the Blockchain. Blockchain is a record of all Bitcoin transactions in history. This large public record of all transactions, constantly updated, is freely accessible.
We have already mentioned that you can store your Bitcoins in wallet software, but what about transferring? How is this work done?
On Blockchain, all history records are publicly stored, but all encrypted. Thus, you can only know the details of the transactions you participate in.
In short, every time someone transfers funds from one wallet to another, both parties sign that transaction through a Bitcoin address. This data is encoded and stored in a Blockchain. Only when the Blockchain computes these records is this transaction confirmed.
From the perspective of those who send or receive, this process is similar to that of a bank. However, in the case of digital currency, the system behind it is decentralized.
Advantages of Bitcoin
Best investment in the world
Bitcoin has been considered the best investment opportunity worldwide. With an appreciation of over more than 100% during the last few years, it seems that Bitcoin’s value will go up unexpectedly.
Indeed, Bitcoin’s numbers as an investment asset are the envy of any investment in banking, real estate, or the stock market.
Crisis protection
BTC has gained prominence because of its valuation. Another big reason is that several crises are happening in important financial centers worldwide.
Today, using Bitcoins to replace national currencies has become a safety measure for many citizens.
In countries with dictatorial governments and intense capital controls, such as Zimbabwe and Venezuela, cryptocurrencies have become real shields against poverty. Indeed, Pakistan needs to learn from these countries and adopt cryptocurrencies to stabilize the country.
International shipments
The physical distance between banks and the fees charged have always been a barrier to sending and receiving money between countries.
We know that transferring money over long distances can be very expensive. And when you use Bitcoins, this process can be done immediately at a cost on the scale of cents.
Final Thoughts
You have learned multiple features of Bitcoins. Transactions through Bitcoins or other cryptocurrencies prevent you from many problems, as discussed earlier. Therefore, it has been much sought after by investors worldwide. You have also seen more and more people buy and sell Bitcoin in Pakistan, as they are now aware of its key advantages, as we mentioned in this post. If you want to buy, sell, or exchange Bitcoin, prefer the most reliable and safe service provider in Pakistan – PKR2Dollar!