Bitcoin (BTC) is the largest and most recognized cryptocurrency in the world. It was released back in 2009 and since that moment it has been operating almost 100% of the time without interruptions. Nowadays, the virtual currency became a new asset class and it is attracting individuals and investors from all over the world.
In the next sections, we will share with you the top 3 reasons to invest in Bitcoin and why you should consider adding this digital currency to your investment portfolio.
Disclaimer: all the information provided in this post should not be considered investment advice. This is for educational purposes only. Never invest more than what you are able to lose and always request information from a professional financial advisor. We are not responsible for any decision you make following this guide.
Protection Against Inflation
Bitcoin can certainly be considered an asset that would protect investors and holders against inflation. This is due to the fact the cryptocurrency has no centralized authority that would suddenly increase its supply.
Bitcoin has a limit in the number of coins that can be created. There will never be more than 21 million coins. Owning Bitcoin would make you one of the few lucky persons that would have access to holding a whole BTC coin.
While most of the countries around the world have decided to print large amounts of fiat currency to fight against the Coronavirus crisis, many analysts are predicting an increase in inflation rates for the coming years. This is something that could certainly increase Bitcoin’s value as people realize it could work as a protection against inflation.
Bitcoin continues to grow at stable and pre-defined rates until 21 million coins will be mined. Miners are currently receiving 6.25 BTC per block rather than 12.5 BTC per block as it was the case before May 2020. That means that BTC inflation would be close to 1.8% this year and it will be slowly decreasing until it will plummet again in 4 years when the next halving will reduce the new issuance to 3.125 BTC per block.
Reduce Government Interference
Individuals that own Bitcoin will also realize they have the possibility to be the real owners of their money. Governments and other authorities would not be able to confiscate the coins a person owns unless he decides to give the funds to the authorities.
The popular crypto motto is “not your keys not your bitcoins.” If you are the owner of your private keys and you have them properly stored, there would be nobody in the world with access to your funds. Only you will be able to handle them.
Thus, Bitcoin becomes very important in countries where governments have extreme power over their populations. They will certainly not have the possibility to take users’ funds as they can certainly do with physical money, bank accounts and other financial assets they could have.
Bitcoin becomes a valuable asset in societies where rights are compromised and where people are closely followed by governments. Thus, Bitcoin provides financial freedom to those that hold their funds in this virtual currency.
No Centralized Authority
Bitcoin has no centralized authority. This is also a very important feature in terms of how valuable this virtual currency can be. Bitcoin works with a decentralized network of miners and nodes that are in charge of protecting the network and controlling all the transactions are properly processed.
The larger the hash rate, the more secure the network will be and the larger the value it will be able to process. More institutions and larger companies will trust a decentralized digital asset such as Bitcoin in order to process large transfers that must arrive in just a few minutes to the recipient.
There will be nobody able to stop this transfer from moving and being processed as it will simply reach the other person once miners decide to take it.
Furthermore, having no centralized authority provides Bitcoin holders with the peace of mind they need to be sure that there is nobody that would be able to change the future of the cryptocurrency unless the entire Bitcoin community is decided to push forward these changes.
The BTC community is conscious about what they can do or they cannot do. Furthermore, if there is no consensus, there will simply be a hard fork such as the one we experienced in 2017 when Bitcoin forked into Bitcoin Cash (BCH).