Stacked cryptocurrency coins (Bitcoin, Ethereum, Litecoins). Photo; gettyimages
Maybe you’ve heard people describe Bitcoin as a unique currency and wondered why. Here’s what makes Bitcoin special money.
Bitcoin is an abstract or virtual currency that Satoshi Nakamoto created and introduced in 2008. This mysterious entity predetermined Bitcoin’s production rate to make it scarce money. Bitcoin’s value basis is the trust that users have in it and its protection by its underlying technology.
Bitcoin secures and authenticates transactions using cryptography. Today, individuals and institutions use Bitcoin as a digital currency. Initially, some people associated Bitcoin with illegal activities and the furtherance of criminal activities. Bitcoin doesn’t have a central issuing authority like a central bank.
Also, decentralization and the lack of a central regulatory authority add to the risk of using Bitcoin. However, Bitcoin has significant economic benefits over conventional currencies. For instance, people and businesses trade Bitcoin on platforms like https://immediate-edge.co/. Here, anybody can register, load their account with fiat money, and purchase Bitcoins. Eventually, they can sell their digital coins at a higher price to profit.
Overall, people can use Bitcoin to pay for services and products. Several online and local merchants and companies accept Bitcoin payments. But Bitcoin is different from other currencies. Here’s why Bitcoin is a unique currency.
Bitcoin is Digital
The internet has created a digital world where individuals and organizations can do many things. For instance, people exchange information and ideas in the digital space regardless of their locations. Bitcoin has taken this freedom further by allowing individuals and enterprises to transact freely without intermediaries.
Unlike conventional currencies, Bitcoin exists digitally. It’s virtual or electronic money that you can’t hold in a physical wallet or bank account. And this differentiates it from fiat currencies that users can keep in their pockets and bank accounts.
Despite being digital, Bitcoin meets the classical definition of a currency. What differentiates it is its reliance on a computer network to enforce cash rules. Thus, Bitcoin is durable, portable, scarce, divisible, and recognizable as money.
Satoshi created Bitcoin with a protocol that limits its supply. Bitcoin’s network defines and reinforces its creation. Overall, the world won’t have more than 21 million tokens unless miners and other participants in the
Bitcoin network reach a consensus to alter the protocol.
And this differentiates Bitcoin from the other currencies whose supply is subject to governments’ manipulation. In most countries, government decisions determine the amount of money the central bank mints and releases to the public. Consequently, governments can manipulate the conventional currency’s value through the central bank and monetary or economic policies.
Bitcoin is an independent and decentralized currency that doesn’t depend on a central authority. It has rigid supply dynamics that benefit users by creating trust and reliability.
Bitcoin is a unique currency because its user owns it. When you accept a Bitcoin payment, you own the tokens you receive in your crypto wallet. And nobody can confiscate your Bitcoins or transfer them to another digital wallet because they require a private key to transact. What’s more, you don’t need a bank to transfer any amount of Bitcoin. Essentially, you’re the custodian of your Bitcoins.
Therefore, Bitcoin provides the custodial benefits of online payment and banking convenience with ease of access. Provided you can access the internet with a computer or smartphone, you can transfer your Bitcoins, and nobody can confiscate or transfer them without your wallet’s private key.
Bitcoin treats every user equally because nobody can solely control or regulate it. Additionally, the global default of this virtual currency makes it unique because people don’t have money with the same value worldwide. Nevertheless, Bitcoin’s acceptance is low compared to conventional currencies. Thus, not all merchants or companies take Bitcoin payments at the moment.