According to data from the Federal Reserve, there will be an unprecedented wave of economic volatility in 2014. If you want to prepare yourself for it, a better hedge against recession is investing in Bitcoin.
Despite the fact that many of its investors are also some of the biggest names in the financial world, the success of the virtual currency Bitcoin is based on its revolutionary nature as a decentralized alternative to fiat money.
As economies continue to crash and banks continue to fail, Bitcoin has a strong chance of becoming a popular way to store wealth and prevent future financial crises.
Here are 8 reasons why you should consider investing in Bitcoin to protect your assets from economic collapse:
1. The First Alternative Currency
for the Global Economy Since its launch in 2009, Bitcoin has evolved into a fully functioning alternative to fiat currencies such as the dollar and the euro. While the market value of all virtual currencies is still relatively low compared to fiat currencies, there is no doubt that it is rapidly growing.
A number of leading financial institutions are already experimenting with Bitcoin, and in November 2013, Google announced that it will be accepting Bitcoin as payment for online purchases.
In the United States, the federal government is also exploring whether Bitcoin could be used as part of an alternative to fiat money.
Instead of a central bank that issues notes that must be accepted by everyone, Bitcoin’s decentralized network is managed by miners who use specialized hardware to solve complex mathematical equations to add new blocks of Bitcoins to the blockchain.
2. The Most Secure Currency
Available Today The technology behind Bitcoin is based on encryption. This makes it incredibly difficult to counterfeit and makes it the most secure currency available today.
Even if cybercriminals steal your Bitcoin wallets, they cannot spend the stolen funds without having access to your private keys, which can only be recovered by you.
It is also important to note that because of the way it operates, Bitcoin is not affected by the same weaknesses as fiat currencies. You can convert fiat currencies to Bitcoin with relative ease, and you can convert Bitcoin back into fiat currencies with equal ease.
4. The Internet’s “Gold”
Because of its digital nature, Bitcoin is like gold in that it has limited supply. This makes it a store of value for people who are looking for assets that are not affected by inflation. As of December 2013, there were about 12 million Bitcoins in circulation.
A total of 21 million Bitcoins will ever be created, which will make the entire circulating supply approximately equal to US$5 trillion. The fact that the supply of Bitcoins is fixed means that their price is not subject to inflation.
For example, even if the U.S. government prints $2 trillion and sells it to the market, the U.S. dollar will still be worth more than $2 trillion because the U.S. government is creating less than $1 trillion of new money every year.
In other words, the dollar is going to remain worth more than $2 trillion as long as people around the world are unwilling to exchange U.S. dollars for Bitcoins. Bitcoin is like an asset that can’t be inflated away by the government.
5. The World’s Fastest Payment System
Bitcoin is fast becoming the “fastest payment system in the world.” As of December 2013, Bitcoin can be sent anywhere in the world in just minutes and there are currently no transaction fees.
The speed at which transactions can be made with Bitcoin makes it possible to pay for goods and services in a variety of ways. Because it is decentralized, anyone can send or receive payments without having to rely on a third party like a bank or credit card company.
If you decide to accept payments in Bitcoin, your business will likely save money compared to using a traditional payment processor because of the fees they charge.
Because Bitcoin’s network operates on its own distributed blockchain, it can move funds faster than any centralized payment system.
If you make a Bitcoin purchase from an online vendor, that payment is sent to the vendor in a matter of seconds. The seller then sends you the Bitcoins in return.
This eliminates the need to process transactions with banks, clearinghouses, and credit cards. The use of blockchain technology means that all Bitcoin transactions are completely irreversible.
6. The Most Transparent System
The Bitcoin network is the only payment network that is completely transparent. Because the entire network is visible for all to see, Bitcoin transactions are very easy to audit.
Because of the way Bitcoin works, there is no chance of any fraud because anyone with access to the entire blockchain can see the entire transaction history.
As long as everyone who owns a Bitcoin keeps their wallet private, they can also keep track of who has accessed and spent their coins. This gives users the assurance that their coins are safe and secure.
7. The Most Convenient System
Bitcoin’s most distinctive features are its speed and its ability to send and receive payments without having to rely on a third party.
Because transactions in the Bitcoin system are made directly between parties, it is possible to perform purchases without using a bank or credit card company.
The only thing you need to do to make a purchase with Bitcoin is to have a digital wallet that allows you to store your coins and make a payment. You can choose to spend the Bitcoins you hold in your wallet on any goods and services you want to buy.
All that needs to be done is to use the digital wallet to send the payment to the merchant. The merchant then has the ability to accept the payment directly from your wallet or they can use the payment method of their choice.
Because no banks or third-party payment processors are involved in Bitcoin payments, users can feel confident that their money is safe.
8. The Most Efficient System
Bitcoin uses a proof-of-work system that rewards miners for finding new Bitcoins. Because Bitcoin transactions are processed through miners who are paid for solving complex cryptographic problems, this makes it possible for transactions to be made in a very efficient manner.
Because of the way the proof-of-work algorithm works, it is possible to create a network that has many more transaction participants than the number of people on the network.
This means that the network can process more transactions per hour than any other digital payment system.
The Bottom Line
In today’s economy, it can be difficult to find a method of payment that will give you the ability to make purchases without paying fees.
While credit cards and traditional payment processors can be used to make purchases online, they usually require users to pay large fees or charge interest for their purchases.
Bitcoin provides users with a way to conduct purchases at no cost or with small fees, which makes it an attractive payment method for those who want to make purchases online.
The fact that you can make purchases without needing a bank or credit card company to complete the transaction makes Bitcoin the most convenient payment system in existence and maybe, in the future.