Why use Bitcoin?

The main reason cryptocurrencies such as Bitcoin will be adopted is that most national currencies are inflationary. Most of the world currencies have fallen by ~ 99.95% against the USD during the last 100 years and at the same time the USD has depreciated by 80-90% against hard money like gold. Most nations know from bitter experience that each generation loses all its assets or monetary value due to inflation a few times during their lifetime. Hyperinflation hits various countries due to political instability followed by money printing, which devalues the national currency.

Central Banks normally have the task of holding back inflation, but in most countries they have not been successful. The Central Banks have various means to influence the inflation rate, such as interest rate of the currency or direct intervention in currency markets or reserve requirements, but all without success. The Central Bank control of the economy has often turned out disastrous for most homes and businesses due to their inability to control inflation and money creation. Many countries have to deal with high interest rates, high inflation, asset prices bubbles, money printing and overheating of the economies followed by economic collapse, currency controls etc.

The main advantage of Bitcoin is that commercial banks, the Central Bank and politicians cannot intervene in the money creation of Bitcoin or the payment system and are not able to sanction money transfers between individuals. Most cryptocurrencies have a fixed amount of coins and will become almost inflation-free in due time.

In most countries a very high percentage of individuals have daily access to a computer or smartphones and the internet, which is a basic prerequisite for Bitcoin. 3g and 4g networks cover most countries, and ownership of smartphone is common. Therefore there are little technical hindrances for adoption.

Cryptocurrencies such as Bitcoin are new technologies, which will increase competition in the financial market on a global scale. There is no expectation that Bitcoin will replace national currencies in a short time but rather over a few decades. Bitcoin will slowly compete with national currencies and over time it will become a viable option for most people to use.

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