- 23 Dec 2021
- Reading time
- 3 minutes
Critics have long argued that cryptocurrencies are financial tools that favor die-hard connoisseurs and techies. However, such claims have only increased cryptocurrencies’ popularity, with over $2 trillion market share. Bitcoin is the most prominent digital currency, fast transforming various global economic sectors. Since its inception, Bitcoin has proven its immense potential to fuel economic growth. This article discusses how Bitcoin can help power the global economy.
The rise in Economic Activities
Bitcoin’s successful reign has inspired an entire industry of cryptocurrencies, held by several mainstream financial institutions, merchants, investors, and individuals worldwide. It has seen the infiltration of several crypto exchange platforms, such as Bitcoin Buyer, bring crypto closer to the public and facilitate seamless transactions. To start bitcoin trading you can go online and visit the Bitcoin Buyer platform online.
The crypto industry is growing pretty fast and, the early adopters who became rich overnight are excellent examples of the robust economic opportunities it offers. Bitcoin has allowed many businesses and organizations to flourish through trading and other investments. Crypto adoption is rapidly growing worldwide, indicating its significant impact on the global economy.
Increased Financial Inclusion
Over a third of the human population lacks access to banking services globally. That is a significant disadvantage since most of the world’s population relies on banks to transact. As a result, the unbanked people have essentially no means to transact or even seek loans whenever they need money.
The majority of them rely on small micro-financing institutions for loans but, the rates are usually extremely high. Sometimes, those institutions also use dangerous tactics to award and recover the loans, putting the already disadvantaged populations in even much worse situations.
Bitcoin increases financial inclusion because it is a decentralized payment method and asset. Anyone can access and transact it worldwide without going through a bank or money processor. Today, several mobile apps and programs enable people to buy, sell, send and receive Bitcoin at their convenience.
Bitcoin’s decentralization enables businesses, investors, aid organizations, and individuals to quickly move money across international borders to those who need it. That also impacts the free flow of capital, allowing the unbanked populations to transact with the rest of the world freely.
Reduced Transaction Costs and Time
Bitcoin transactions cost relatively lower than bank transfers or credit cards. One of the reasons is that Bitcoin does not require a brick-and-mortar building to operate. Instead, its transactions occur on the blockchain. Bitcoin is not subject to utility costs, rents, or wages, impacting low-cost transactions.
In the traditional financial systems, cross-border transactions usually involve intermediaries who also take a commission from the transacted amount. Bitcoin users do not have to account for such costs because transactions do not include third parties. Most crypto exchanges charge about 1% to 5% in transaction fees, relatively lower than credit cards, debit cards, or money processors.
The absence of banks and other intermediaries in Bitcoin transactions also reduces the duration of processing payments. Bitcoin works on a P2P network, facilitating funds transfer between two parties without third-party intervention. Bitcoin’s blockchain processes payments in a few minutes, unlike banks and money processors that could take several days or weeks.
The blockchain validates all Bitcoin transactions on an irreversible digital shared ledger, encouraging transparency and security in financial transactions. The reduced transaction costs and payment processing times prompt many businesses and individuals to transact in Bitcoin. Besides, Bitcoin facilitates the free flow of capital, creating vast opportunities and driving growth in various global economic sectors.
Bitcoin undoubtedly has the power to drive growth and development through increased economic opportunities, financial inclusion, and reduced transaction costs and time.