Why is Bitcoin Useful?

why is bitcoin useful

Word is out, bitcoin’s influence and adoption continue to surge. Here’s why everybody loves bitcoin.

Sure, we know that bitcoin can be super helpful when it comes to online transactions. We know that it gives an excellent alternative to standard stocks and bonds. It’s decentralized and pseudo-anonymous, giving many a more consciously comforting choice for storing, using, and gaining income.

But how does bitcoin have value in the first place? Is it’s valued solely monetary? Perhaps what makes bitcoin so incredibly valuable isn’t necessarily the worth that it represents, but the technology that it has created and utilized, as well as the firm moral ground that it stands on.

 

Bitcoin Security

Bitcoin security has much to do with the fact that it is a decentralized currency as well as it has a fully accessible public ledger system. These two things keep bitcoin secure against artificial inflation, incorrect or misleading postulation, and clear of the far-reaching issues that can cause fiat to dip and sway so severely. This not only makes bitcoin super useful but also more reliable with price projection than most fiat currencies.

While this is true, there’s a number of areas in which bitcoin security isn’t exactly top-notch. A massive number of available bitcoins that should be on the market have actually been stolen. Bitcoin security is insanely important to consider whether you’re holding a fraction of a coin or hundreds of bitcoins in full. The absolute best way to keep your coins secure is by using the best bitcoin tumbler you can find in conjunction with a variety of carefully curated wallets. Both online and offline.

 

Why is Bitcoin Useful? Bitcoin Morality

When we talk about “bitcoin morality” what we mean are the founding principals that bitcoin was built upon. In 2019, when Satoshi Nakamoto created bitcoin, they released a paper entitled Bitcoin: A Peer-to-Peer Electronic Cash System. What this paper described was how a peer-to-peer network could generate “a system for electronic transactions without relying on trust.” What was meant by this iconic statement was that bitcoin is designed not to have a centralized authority controlling its efficacy.

Using cryptography and distributed ledger technology, bitcoin was built to exist outside of the crushing issues experienced in 2008, caused largely by fractional-reserve banking. In which a bank (central authority) accepts deposits from their customers, and then uses those funds to offer loans and generate income for the bank itself. In this practice, banks only hold a fraction of the deposited balance within their reserves.

Bitcoin was also built on the foundation of anonymity. With no need for a centralized authority, no one needed to provide personally-identifying information in order to create, send, or receive transactions. Providing an excellent precedent for infrastructure that can be used to create similar currencies, should fractional banking practices and fiat become problematically obsolete.

 

Why is Bitcoin Useful? Bitcoin Technology

The technology of bitcoin is arguably the most useful and exciting part of the currency. Blockchain technology is the single defining reason that bitcoin works as a decentralized currency. Because of blockchain, bitcoin is mostly anonymous. Because of blockchain, bitcoin is decentralized. Because of blockchain, bitcoin is reliable. Because of blockchain, bitcoin is lucrative.

Also- blockchain is a type of technology that doesn’t only apply to bitcoin and other cryptocurrencies. Blockchain could easily be integrated into a number of other fields and industries. To put it as simply as possible- blockchain is a publically accessible log of data that is disturbed to any number of computers around the world that are connected to a specific network.

The use of blockchain allows anyone within that specific network to look at the ledger and see who has what. It can also show a transactional history of how ‘who has what’. Meaning it also functions as a historical ledger. So you can see where the shift of goods came from and went.

Anytime there is a transaction of bitcoin, that transaction is broadcast to every computer (node) on the network. Certain nodes (miners) solve complicated mathematical algorithms in order to verify that the transaction that was broadcast is valid. Once the transaction has been verified, it is then “sealed” in an unchangeable, time-stamped section of the ledger (block). This Block is then added to the chain of all the other blocks that have been verified and sealed. Thus creating a blockchain.

You can see that this particular type of ledger could be incredibly useful when it comes to all sorts of applications. Not just for bitcoin and currency, but for goods and service data as well. Some believe that had this type of distributed ledger technology been used by large financial institutions, it could have been used to curb the financial crash of 2008.

 

Why is Bitcoin Useful? Bitcoin Privacy

While it’s true that bitcoin is pseudo-anonymous, there’s still an important bit of anonymity involved. There are also ways, like by using a bitcoin tumbler, that you can help to turn that pseudo-anonymity into full-on anonymity. This inherent anonymity can help keep your personal business private. Things like your name, address, purchase patterns, and account balance are all off the record when it comes to properly cleaned and handled coins.

Historically, when things got tough, governments have seized assets from civilians, whether they had a legal reason to do so or not. If recent political turmoil has taught us anything, it’s that data is worth more than dollars sometimes. Cambridge Analytica has brought into the stark reality that purchase patterns and affiliations can make it exceptionally easy for governments and big business to get exactly what they want.

It can also allow you unfettered access to goods that you’d rather not announce to the word that you need. Think rash cream. Anytime you use bitcoin, you don’t have to use your name or any personally identifying details. This works by using “wallet keys” instead of personal information to identify where bitcoin is coming from or going to.

Wallet keys are long chains of numbers and letters that work as an address for any online bitcoin wallet. These keys are used to identify transactors. However, with this novel practice, comes the inevitability of Pseudoanonymity. As wallet addresses are used, transactions can be directly attributed to that wallet. To find out who owns any given wallet based on address use, all you would need to do is trace that wallet to a purchase that required a mailing address. Bitcoin tumblers can break this trail and bring back true anonymity.

Read more articles about Bitcoin like: Bitcoin 2020: A Year to Exceed Expectations 

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