Last week I explained What are bitcoins and how do you get them. I also explained how I earned easy 1500€ with bitcoins and my friends have earned MUCH more. Today I am going to tell you what are the benefits of bitcoins. I will give you 7 benefits of using and investing in bitcoins.
1.Low Inflation Risk
A value of $1,000 dollars has decreased to $45 in 100 years. Having lots of dollars (or any other currency) in your bank account doesn’t seem to be very wise. Bitcoin doesn’t have a similar risk of inflation because only about 21 million Bitcoins will ever be released. It’s said beforehand how many bitcoins will ever be in the world. Nobody can make more of them.
But think about normal currencies. European Central Bank decides, “Hey, let’s make a few billion euros!” That moment the value of your cash in your pocket goes down fast. By buying bitcoins you diminish the risk of losing your hard-earned money. Some people say that you don’t need to collect money. “Who knows if you are going to live tomorrow?” Well, if you don’t die today you still need to buy some food for tomorrow and probably for your family too. We don’t need to be selfish with money but the wise planning of your money is definitely profitable.
“Poor people say that saving money is safe and investing is risky. Rich people say that saving money is risky and investing is wise.” -Robert Kiyosaki
2.It Is Decentralized -> Purchases Are Not Taxed (depends on the country)
A decentralized currency means that any organization, bank or any institution doesn’t run the currency. It doesn’t have central control. It allows means that all purchases are anonymous and they don’t happen any bank or country. Is it a good thing or not? You can decide yourself but at least it has many benefits. One of them is that your purchases are not taxed in some countries. But this depends on how countries have regulated about bitcoins.
This allows companies to give you discounts if you are paying with bitcoins. When I was buying flight tickets from Air Baltic, I saw that I get around $10 discount if I pay with bitcoins. Air Baltic is not the only company that gives discounts when you are paying with bitcoins.
Let’s say that you want to transfer your money to your friend and he has a different bank than you have. Normally, it takes 1-3 business days that the money will be on your friend’s bank account. Most of the time this doesn’t make any problems if you are planning your life ahead but would it be easier if transactions would be immediate?
With bitcoins, you can transfer money in seconds. You don’t need to wait for days that your friend gets the money. This can also help if you are a business owner. Your client’s payment will come to your account faster than before. You can also pay faster to your business partners and so on. Immediate transactions with bitcoins just make the life one step easier.
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4.Global Currency – You Can Use It In Tens of Countries
If you are traveling around the world, many times you need to change the currency. Now in EU we have the same currency in most of the countries so then you don’t need to change euros. I have realized that it makes traveling a bit cheaper and easier. It’s not a big thing to go to a currency exchange and change your currency but it still takes some time. It’s just easier to have some money all the time.
If you are changing currency, the exchange company always takes some fee of a transaction. It would save your money if you wouldn’t need to change it. These currency exchanges wouldn’t exist and those people would focus their energy on something else to make this world a better place.
With bitcoins, you can already pay in tens of different countries. Do you know the actual amount? Leave a comment below.
5.Diversify Your Money – Lower Your Risk
Have you ever thought what happens if you have money on your bank account and then the bank collapses and makes a bankruptcy. It’s not happening every day but sometimes during economic depressions, these things have happened.
In some countries, the state has insured your money to a certain extent but that’s not the case in all countries. And if you have lots of money on a bank account, then the state will not probably pay the whole sum. Think what would happen to a state’s economy if some main banks would make a bankruptcy. The state would need to pay all clients money and the whole economy would go down very fast.
If you own bitcoins, then you are diversifying your money. If you have money in 10 places, it’s not so big problem if you lose one of those. But if you have all eggs in one basket, you are taking a huge risk.
6.No Monthly Fees Like in Bank Accounts
In most of the banks, you need to pay fees for keeping your money in their bank and for using their service. It may be low like 3€/month but in some banks, it’s more. If you are under 26 years old, you may get a bank account without any fees but most of the people are over 26.
With bitcoins, you are not paying any monthly fees for any party. Your money is on your bitcoin wallet for free. You only pay for transactions you make and transactions fees are usually very low.
7.Huge Income Potential
What if you had bought bitcoins for $1,000 in 2009? Now you would be a millionaire. Now we are living 2017 and maybe after 8 years a guy comes to ask you again, “What if you had bought bitcoins for $1,000 in 2017?” What if you would be a millionaire again and you missed the chance again. Bitcoins really seem a great way to earn passive income.
Nobody knows exactly how bitcoin’s value is going to develop but because of its benefits, I believe that it will more likely go up a lot. I invested only 500-600€ in Bitcoins and now I have already made +1,500€ which make the total value of my bitcoins +2,000€. It’s still not a big sum and I am thinking about buying them more in the future. What if same happens to bitcoin’s value that has happened before and it goes 100x. Then my 2,000€ will be 200,000€. Wouldn’t be bad for me? 😉
There are people who have made tens of thousands or even millions in a few months with bitcoins. I recommend that don’t risk all your equity with bitcoins but maybe you could make some profit too.
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If you don’t believe that the value of bitcoin will go up in the future, you can just take your $10 bonus and sell bitcoins right away. Then you won $10 anyway and had 0 risks. But if you believe that bitcoin could go up in value in the future, then you can leave bitcoins to your wallet and see how value will change in the future.
Do you already have bitcoins? How much profit have you already made? Leave a comment below!
A couple things I want to point out, because I feel like plenty of people outline the benefits of having Bitcoins but often fail to mention the risks.
1. Purchases are tax-free, but at least in the United States capital gains are not. This means if you purchase Bitcoin and it accrues value, you pay taxes on the gains that you made.
2. Diversifying into Bitcoin does not simply lower risk. Factors to take into consideration are the risks of owning Bitcoin themselves.
3. Again, I think it is dangerous to outline the income potential and leave out the loss potential. There is no solid historical foundation for investing in cryptocurrencies and therefore all investment advice is purely speculative. Minimizing risk is very difficult with the lack of resources the cryptocurrency market has compared to, say, the stock market.
I think investing in Bitcoin can be a good idea, but I also think the risks should be discussed more.
I think this article was originally written in 2016 and many things have changed since then. Anyway, the future of Bitcoin looks now brighter than ever. More and more people and companies have started using Bitcoin and the cryptocurrency “revolution” is starting to take over.
If the rest of the world accepts the use of cryptocurrency – bitcoin for transaction, I believe that the lives of people are going to be more better. Giving one’s money security against losing value is one thing I love so much about bitcoin, currency fluctuations kills the value of money. I can recall when our Naira currency had more value but now it’s just a useless piece of paper. Now imagine $1 equals to #360 now.
Yeah numerous currencies/government money have died over the years. Eventually, the current banking system, where more and more loan is generated all the time, will collapse. It’s not sustainable that the amount of loan is all the time getting bigger in the world.
It’s such a shame that as the day goes by, things keep getting worse. Now, no matter the amount of money one holds, as long as the value of the money is very low, such money doesn’t hold any worth. It’s just the case with Nigerian currency where #1000 wouldn’t buy anything reasonable for one. But I believe that bitcoin can change all that if given the chance.
Yeah, I truly believe that cryptocurrencies will, if not replace, at least provide a great alternative for a current financial system. The users of cryptocurrencies is growing fast and the “revolution” is moving forward 🙂
Exactly, cryptocurrency revolution is taking a massive growth and I don’t think that the activities of some government would hold it back. They can try but it’s definitely not going to stop it. Cryptocurrency – bitcoin mining is one good way to get people involved in the coin acquisition, one don’t even need to use fiat currency to start out but through mining, one can own btc.
This is the one thing that I regret not doing in the past. My friend and I wanted to invest and actually buy a Bitcoin back when it was around £400 I think. It would have been great to invest in it back then but unfortunately, we didn’t go through with it.
The current value of a Bitcoin is £3100 which is just crazy. That would have been an amazing investment but it’s a shame we didn’t. Bitcoin is definitely great, although at the moment it’s just not accepted in enough places to be a popular choice for a lot of users.
the good news for you is that there are always profitable investment opportunities in the world. When old ones go, new ones come. That’s why I always recommend for searching new opportunities in the present moment. We can learn from the past and apply the knowledge for the future.
I believe still for the potential of Bitcoins and who knows if after a few years the value of one coin will be £50,000.
Kingcool52 I believe that we all made the same mistake with not investing in bitcoin far back when it was out newly. Personally, I was persuaded to invest so much by one friend of mine that I started suspecting if he had other motives behind his desire for me to put my money into cryptocurrency. But I turned out to be the one who was wrong.
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thank you for the offer. But as I have talked in other posts, I don’t want to gamble. Back in the days I earned big money with online poker. But then I found Jesus to my life and after that I haven’t liked gambling anymore. There are too many sinful things in that world so I want to away from that. I prefer earning money while providing important value for other people. But if I am playing poker, sometimes I am just taking money from the addicted player. In my opinion, I should help a guy with a gambling addiction instead of take his money in a poker table. What do you think?
Interesting benefits of bitcoins. I haven’t had much dealings with them, so not too familiar. I would think though, that these might be a little risky? Is this similar to investing in a way? So, potentially you could lose them all as well right? I am going to have to do some more reading on your website and get a little more educated.
Hello Matt’s Mom,
in my opinion, not having bitcoins is risky. When I buy bitcoins, I am allocating my equity and lowering the risk. In addition, bitcoins have a great potential to go up in value in the coming years. If I would own dollars (or any other currency) it would be very risky because then I know for almost sure that I will be losing money every year when the money goes down in value.
Still, I do agree that there is a risk in bitcoins like in everything else in life. Is it safe to go to a work by car? There is a risk of driving a car accident. People don’t realize that risk because driving a car is so common for them. I think that many people think bitcoins as risky because is a new thing for them. New things seem many times risky until you get familiar with them.
Your idea to read more is good because the risks of investing go down dramatically when you know what you are doing. 🙂
Hi, as someone who had a little bit of trading experience, I think there will be risk in doing trades. I will term bitcoin as an online commodity for trade and potentially there will be risk involved.
The best example is the oil price crash over the last 2 years. With oil hitting all time high of $120plus it dropped to $20plus a loss of more than 80% of the capital.
I am not denying the fact that there is great potential for bitcoin’s value to go up but people should recognize in terms of investment there are risk involved.
you have a good point but I want to point out that there is a big difference between trading and investing as you probably know. Trading is something where you trade currencies/stocks/or something else daily. I prefer investing on something for a long-term. I almost always plan to keep my investments at least for 5 years.
I haven’t really been studying about trading bitcoins because I believe that their value will go up in the long term. There are clear benefits that I have pointed out so I don’t see any big reason why it wouldn’t go up. The only reason could be hacking but I think that the probability for that is very small.
Thanks for a well explained article. I’ve been nervous to get involved in bitcoins in anyway but I see that a moderate investment can yield a profit. Just don’t be greedy. But that applies to all investing anyway.
This article has piqued my curiosity so i will be reading your other bitcoin related articles.
you are definitely right that one shouldn’t become greedy when investing in different things. It’s a dangerous situation if one things, “Know I know completely how this works.” We must be always willing to learn and be humble.
It’s very interesting to see how the value of bitcoin will change in the future.
As you liked the article, feel free to share it with your friends who could also be interested in bitcoins 🙂