5 Problems That Bitcoin Solves| MENAFN.COM

Wednesday, 10 August 2022 05:10 GMT

5 Problems That Bitcoin Solves


(MENAFN- CCP Marketing)

Bitcoin is a transformative digital currency with far-reaching impacts on the global financial sector. The current economic system is subject to flaws, including inflation, bubbles, and questionable regulatory frameworks, lack of transparency, bailouts, and huge unbanked populations. While Bitcoin may not fix all those problems, it has the potential to create a more secure and fairer system, not dependent on government, institutional, or political influence. Nevertheless, the following are the five fundamental problems that Bitcoin can solve. 

Inflation 

Many countries around the globe today experience inflation mainly because their central banks print too much money, making the currencies lose value quickly. Bitcoin's supply can't exceed 21 million tokens. More than 18 million Bitcoin tokens are currently circulating in the market, and the collection will reduce gradually over time. 

Like all free markets that fluctuate based on supply and demand economics, the increasing demand and diminishing Bitcoin supply will undoubtedly push up its unit price and value. Besides, Bitcoin also undergoes a process known as halving, reducing the number of rewards issued to miners by half every four years. That also makes Bitcoin more scarce, allowing its value to increase. Those attributes offer Bitcoin a self-propelling dynamic of sustained, long-term value growth, withstanding inflation. 

Cross-border Remittances 

Analysts predict the remittance market cap will hit $1 trillion in the next few years. However, about 20% of the revenues get lost in transaction fees and commissions by intermediaries and money processors. That has made the cost of sending money internationally very expensive, significantly hindering the flow of capital to the people who require it the most. 

Bitcoin offers the best solution because it is decentralized, facilitating seamless and instantaneous cross-border remittances. Its decentralization also eliminates intermediaries from transactions, ensuring relatively lower fees. Many crypto exchanges like http://thenewsspy.technology/ usually charge just 1% to send money in Bitcoin. 

The Unbanked 

More than 2 billion people worldwide currently lack access to banking services. That means they also do not have bank accounts, which is discriminatory. That makes it imperative for those populations to only transact in cash that is also not readily available. The lack of banking services also hinders those populations from engaging in business with the rest of the world, increasing poverty. 

Bitcoin solves that problem by enabling people to transact worldwide without opening bank accounts or relying on financial service providers. Bitcoin users only need a smartphone or computer and internet access, available in many parts of the world today. They also require digital wallets, readily accessible online, even for free. 

Bitcoin allows users to become their custodians and access all the opportunities offered by financial institutions without any external intervention. 

Investment 

Although many investors still rely on traditional investment instruments such as stocks, real estate, and gold, they are subject to various regulatory issues and government influences. Bitcoin has unique properties that have allowed it to outperform almost all asset classes in the past year. It is a virtual asset, helping investors shift towards a digital economy. Bitcoin is also liquid, more secure, and easier to buy and sell than most assets. It grows by about 200% on average annually, proving its reputation as the best value asset. 

Transparency and Accountability in Financial Transactions 

Bitcoin is a peer-to-peer network facilitating transactions without any third-party involvement. Its blockchain technology verifies and validates users' addresses and transaction history on a digital public ledger. The data is permanently encrypted on the network, ensuring the utmost transparency and accountability in all transactions. 

Bitcoin integration is still in the early phase and, we cannot entirely unearth its potential. However, it has so far proven its worth in solving inflation, the lack of banking services and transparency in financial transactions, and investment woes. 

 

 

MENAFN15112021006171013398ID1103172108

 


CCP Marketing

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.