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There are many cryptocurrencies present in the market but bitcoin is the top digital currency because it provides greater liquidity.

Opinion

What made Bitcoin a formidable payment instrument?

Bitcoin is trending in the number one position in the cryptocurrency market. Whenever we hear the word cryptocurrency, bitcoin is the first thing that pops into our mind. Keeping aside the constantly increasing and falling prices of bitcoin, it managed to gain the peaks of popularity amongst the cryptocurrency users.

Most people think that cryptocurrency refers to bitcoins only just because it is the leading currency at this time. There are plenty of bitcoin trading platforms you can find online including bitcoin champion. The point to ponder is how did bitcoin become such a formidable payment instrument?

Keep reading to know some of the reasons:

Greater Liquidity 

There are many cryptocurrencies present in the market but bitcoin is the top digital currency because it provides greater liquidity. Users can retain most of their value when they convert it to their fiat currency. On the other hand, some other cryptocurrencies cannot be directly exchanged to their fiat currency like US dollars or euros and even if they do convert directly, there are chances of loss. Although bitcoin cannot be sold like the regular fiat currency it is closer to it than any other digital currency.

Wide Acceptance

Hundreds of buyers, sellers, traders, and investors have chosen bitcoin and accepted it as a digital currency. Many online sellers also prefer taking bitcoins in exchange for their product. Thus, this further increased the use of bitcoin all over the world. Even some of the biggest companies like Tesla have hinted to accept bitcoin as a payment in the coming days.

Easier International Transactions

While the use of fiat currency can be limited to your region, bitcoin is a world-wide accepted digital currency. Thus, you have more chances of successful and fast international transactions with the use of bitcoin.

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The international transaction fee is also relatively low as compared to the normal economic fiat currency international transactions. Credit cards and ATM cash withdrawals are more expensive when it comes to international payments than digital currencies.

Generally Low Transaction Fees

While we have seen above that bitcoin is more affordable for international payments, it is also cheaper when it comes to local transactions. The transaction fee of bitcoin for local users is not more than 1%. On the other hand, other payment platforms like PayPal charge 2-3%.

Privacy

Many people want to keep their payments private and anonymous which is not possible with fiat currency because all your bank transactions are recorded by the government. However, bitcoin and the platforms which support the use of bitcoin ensure user privacy.

Bitcoin’s built-in privacy mechanism ensures that even if your transaction is tracked, it cannot be figured who the user of the transaction was. Although your online accounts like banking accounts of other payment platforms are probably safe from intruders, private merchants and public authorities can find out where you spend your payment. The transparency provided to the users by bitcoin is a major reason for it becoming a formidable payment instrument.

Independence from Political Agents

Bitcoin is not a currency that is bound by the rules of a certain country or managed by a political entity. Similarly, the digital currency is not held by any central bank or government authority so it has major political independence.

It is much harder for the governments to seize or take control of bitcoin units because it exists out of the premises of the political system. Thus, it is a more secure form of payment than other currencies. It is completely decentralized which means you will not need any third party interference to complete a transaction.

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Conclusion:

Bitcoin is becoming the new face of currency and is being widely used everywhere. The more people accept this digital currency, the more its value increases. The technological updates in the currency are also driven to ensure that it remains a formidable payment instrument in the future.

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