How Bitcoin Is Improving Financial Literacy
Over the past decade, cryptocurrencies have risen from a niche asset to a coveted investment instrument. Today, it’s difficult to avoid news related to cryptocurrencies. Everywhere people are talking about doge or ethereum, while others are looking for profitable opportunities like options trading on Bitlevex.
Recently, Coinbase, the largest US-based crypto exchange was listed on NASDAQ. This marked a milestone in crypto’s history where Bitcoin and altcoins have finally entered the mainstream. Payment processors like PayPal and Visa have also decided to give cryptocurrencies a chance, increasing the number of people exposed to this technology.
Thanks to this huge interest and popularity, people are learning more about our financial system and its flaws and how cryptocurrencies can solve them.
How is Bitcoin revolutionizing finances?
A decade after its release, Bitcoin has slowly matured towards becoming a sound store of value. Over the years, the advantages of Bitcoin are becoming common knowledge. Some of these characteristics are worth repeating:
- It’s deflationary – Bitcoin has a limited maximum supply and there can only be 21 million coins ever in existence. This is in contrast to FIAT currencies, that governments can print as much as they need.
- It’s decentralized – meaning that there’s no central authority that can control the issuance of new Bitcoins or the usage of its network.
- It provides true ownership – thanks to the asymmetrical cryptography that secures it, only the owner of the private key can access and spend their Bitcoin.
- It eliminates third parties – Bitcoin is a true peer-to-peer network, with no intermediaries in between.
- It’s easy to store and transfer – Bitcoins are digital in nature and are stored on the blockchain. Furthermore, their transactions are quite fast when compared to the traditional banking system.
- It’s unfalsifiable – Bitcoin’s are just transaction records on the blockchain and as such, cannot be copied or duplicated.
However, to understand why Bitcoin is a better asset than FIAT money or traditional store-of-value commodities such as gold, people are required to learn more about it. For instance, using it requires some extended technological knowledge, that the uninitiated can perceive as a barrier.
Bitcoin requires technical knowledge
Before you start using bitcoin or cryptocurrencies in general, you need to understand the technicalities of how they are stored and spent.
However, once the initial learning curve of cryptocurrency wallets is assimilated, people begin to understand the importance of true ownership of their money.
Unlike money in your bank account, no one can deny access to your bitcoin. Furthermore, thanks to the permissionless nature of the blockchain, anyone, anywhere in the world can use them, without the risk of corrupt governments being able to confiscate them.
Bitcoin requires you to understand its value
Long gone are the days when people were claiming that Bitcoin is a bubble. Today, even institutional investors such as JPMorgan are considering offering Bitcoin as an investment asset to their clients.
The combination of ever-rising prices and the support from institutional investors has risen the curiosity in the general population about Bitcoin’s true value.
People are trying to understand why Bitcoin has become such a solid asset. They are increasingly becoming interested in the negative effects of inflation and how it impacts their savings.
Thanks to the many advantages and the huge financial opportunity it offers, Bitcoin is pushing more and more people to educate themselves about money in general. Investors that wish to participate in this financial revolution are learning about the shortcomings of current monetary policies and how to overcome them by diversifying their investments.
As time goes by, we will see more people turning towards a solid store of value assets such as Bitcoin instead of locking their savings in FIAT.