For a long time, fiat money has been the primary of transactions, and the exchange of fiat money largely depends on each country’s government and economic policies. The central bank of every country is saddled with the responsibility of regulating fiat money. However, the value of the local currency increases or decreases with the trading of the stock market and people’s trust.
Meanwhile, Bitcoin, in its regard, is a digital currency characterized by deregulation, which means its operation is not centrally regulated by the government of a country. This brings its transaction process security and flexibility. Credit to its blockchain technology feature, the system is transparently and easily monitored.
In the sequel to the above, there is a need to assess the rationale behind people’s preference for Bitcoin over fiat money.
1. Lack Of Government Interference
Every asset can’t be centrally controlled by the government of a country, and an example is a digital currency like Bitcoin. This is because regulations can’t be made on the sale and purchase of Bitcoin; therefore, Bitcoin users are in their prerogative to buy, sell, and store the crypto. On the other hand, a country’s central or reserve bank has the power to regulate the purchase, sale, and storage of fiat money.
2. Global Transaction Instrument
As important and powerful as fiat money is, it can’t be used to upset cross-border transactions at a uniform rate, meaning it has its most relevance within the borders of related counties. But this narrative is possible with Bitcoin as it can move across national and international borders without restrictions. Digital currency is a decentralized currency devoid of government regulation or interference. This flexibility feature enjoyed with Bitcoin makes people prefer it over fiat money.
3. Low Saving And Transfer Fee
In comparison to the local banking services, storing Bitcoin incurs no fee. Also, Bitcoin operates better when it comes to transferring funds. The transfer fee of sending Bitcoin will increase with increasing Bitcoin price, albeit it is still cheaper than fiat money.
4. Resistant To Falsification
One interesting thing about Bitcoin is that fraudsters can’t falsify Bitcoin. There is no fake Bitcoin! Unlike fiat money, a paper currency, Bitcoin is a digital currency powered by blockchain technology. Bitcoin has been made so that every detail of transactions is duly recorded in it (digital ledger). Hence it poses difficulty to being bypassed.
5. Bitcoin Enables Small Transactions
Bitcoin transactions are accepted in the 100th million part. This simply means that Bitcoin transactions are in equivalence of 0.00000001 part. This number is popularly called Satoshi, which is eponymous with Bitcoin creator Satoshi Nakamoto. Therefore, making the smallest transaction with Bitcoin is easy and possible, which is impossible with fiat money. To this end, a repute of being the most equitable transaction method to behold alludes to Bitcoin.
In the years to come, there is a propensity for the world to have a single currency with the same value across every border, and Bitcoin is already pacing through the path. It is impossible to turn a blind eye to the flexible features Bitcoin offers compared to other local currencies in respective countries. Still, it is important to learn and relearn about Bitcoin before delving into Bitcoin transactions.