Many have described bitcoin as the powerhouse leading the paperless currency revolution. Its stellar performance has attracted the applause of many industry players, citing bitcoin’s strong links to economic growth. However, others insist bitcoin and other cryptocurrencies have a disruptive quality that interferes with how the traditional financial systems operate. Nevertheless, here’s why the majority believe bitcoin can impact economic growth.
Convenient access to capital
Inadequate accessibility to capital is one of the biggest hindrances to economic growth, especially in developing nations. While traditional financial institutions like banks do provide loans, the processes usually take a lot of time, mainly due to government restrictions and the bureaucracies of banks. The loans also bear very high interest rates, which leaves the recipients with a more significant financial burden.
Bitcoin could be the ideal alternative to solving such inconveniences. It is a decentralized currency that users can freely exchange and trade worldwide. Bitcoin is also a digitized form of currency whose transfers usually take just a few minutes to process. Those qualities enable people to transfer money and trade bitcoin without third-party intervention quickly.
Convenient access to capital would enable people to easily send and receive money across international borders for various economic activities.
Increased economic opportunities
Bitcoin’s meteoric success has inspired the development of the entire cryptocurrency industry, whose value is now over $2 trillion. It has set the developmental path for several new digital currencies, electronic payment methods, and businesses around the globe. Bitcoin has created vast business opportunities for cryptocurrency consultants, cybersecurity developers, investors, asset managers, and retail traders.
The 1K Daily Profit is one of the beneficiaries of the bitcoin revolution, which is now attracting cryptocurrency traders worldwide. Several mainstream financial institutions and ordinary businesses are rapidly adopting bitcoin as a means of payment. Others are also securing bitcoin holdings as a way to diversify their investments. As bitcoin adoption continues to take shape, we expect even more economic opportunities in other sectors outside finance like health, car manufacturing, and retail.
Low-cost money exchanges
Recently, El Salvador passed legislation to make bitcoin a legal tender, which people can use to acquire investments and pay for goods and services. Their main reason for the policy change was to reduce the huge losses resulting from the high costs of money transfers. That is the reality experienced in most parts of the world, where people still heavily rely on banks and other conventional financial institutions to send and receive money.
Bitcoin has minimal operational costs since all the transactions are electronically verified and validated by blockchain technology. Bitcoin transactions do not require an intermediary to oversee the exchange process, as stipulated in fiat currency transfers. Besides, bitcoin users are not subject to overdraft fees and account maintenance costs, contributing to the lower costs of transactions.
The low transaction costs associated with bitcoin are a reprieve that would enable many organizations and individuals to increase their bitcoin investments, thereby significantly driving economic development.
Improved transactional security and accountability
The high-level corruption and bureaucracies within the traditional banking systems have scared many people from investing. Bitcoin could offer the ideal solution since it is a decentralized digital currency. Its blockchain technology eliminates third parties from involvement in transactions, which is the first step towards transparency and accountability. The technology uses encryptions to accurately validate and store transaction data on a shared digital ledger. That helps with the prompt tracking of users’ activities on the network, preventing cases like corruption, money laundering, and fraud.
Although it would still take time to realize the full potential of bitcoin, the above discussion is sufficient proof that it can drive economic growth.