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My name is Bryan - Welcome to my Singapore Bitcoin blog
Bryan - Singapore
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Why Bitcoin?

June 2017

If you're one of the countless skeptics who wonder what the added value is of Bitcoin when there are already quite a few cashless and online payment systems, then this article will be an interesting read.

Unless you're in the know of the goings-on under the Bitcoin hood, it's easy to conclude that, like Visa, American Express, Paypal, Western Union or regular banks, Bitcoin is simply yet another way to make a cashless or online payment, or to remit money around the world. The fact of the matter is, however, that Bitcoin is actually a completely different animal, pretty much incomparable, to the incumbents we're all familiar with.

What are the differences between Bitcoin and the current pack of transaction providers and how why should we prefer Bitcoin?



Bitcoin has a handful of major differences that make it unique. Probably the main trait that makes Bitcoin stand out is that it is decentralized. This means that funds can now flow freely, i.e. without a middleman, between the sender and the receiver; there's no need for a third party regulator, so this cost overhead is saved right off the bat. Now, for those wondering if the transaction can be really safe without an arbiter, a fair position to take, I have one word for you: Blockchain.

If the transfer is an overseas one, then since both parties transact in Bitcoin, there are no currency conversions and thus the costs associated with these are saved also.

Of course, transferring Bitcoin does involve some cost, but this is several orders of magnitude lower than the fees and overheads in effect by traditional means. And Bitcoin doesn't discriminate between small sums or large sums - both will be cheap to transfer.

Clearly, with Bitcoin, a lot of money will be saved any time money needs to flow from A to B.

But, apart from Bitcoin blockchain technology enabling value transfer without a middleman, there's also a considerable time saving element in the case of Bitcoin, as Bitcoin-powered transfers will, once the Lightning Network is implemented, be completed in seconds. Compare this to up to several working days in the case of a bank to bank telegraphic transfer.

If you're an investor and you're looking for a store of value, you should know that there is only one store of value in the world that's 100% finite: Bitcoin. All told, there will only be 21 million Bitcoins in circulation ever. And that's only by the year 2140. Currently, there are about 16 million in circulation.

In fact, the rate at which new Bitcoins are added actually halves every 4 years. And because Bitcoin isn't correlated to any other investment class out there, apart from perhaps gold, it's an effective hedge during turbulent times, economic downturns, or when a downturn is imminent.

Better yet, since Bitcoin is decentralized, when you own Bitcoins, there's no over-zealous government running printing presses and diluting your savings. Bitcoin is inflation-proof and nobody is the boss of Bitcoin. This means nobody can manipulate Bitcoin or change the rules of Bitcoin to suit them. Bitcoin is governed by consensus rules, which means that changes can only occur if and when the majority of the nodes are in agreement.

Of course when you own Bitcoin, you're also protected against the freezing of bank accounts in order to protect banks' liquidity. European law-makers have been testing the feasibility of this audacious mechanism for some time and it may eventually become law in the not too distant future.

Small wonder that the people - in particular millennials - are beginning to lose faith in these rogue governments and banks. More and more are voting with their feet and are turning to Bitcoin. You don't even need a bank account to own Bitcoin.

All that being said, are there no downsides to Bitcoin at all? Well, given its nascency, there are some aspects of Bitcoin that you need to keep in mind. One of these is Bitcoin's volatility. Naturally, this volatility will abate over time, but for now it's part and parcel of the process of a new and game-changing development like Bitcoin finding its place in society.

Also, a consequence of Bitcoin being a decentralized currency is that you and you alone are in charge of your funds. Whilst this sounds great ostensibly, it's important to note that this works both ways. I.e. you and you alone are accountable for the security of your Bitcoin. If and when you've misplaced your Bitcoin, forgotten where you've stored them, or you've been hacked, then in all likelihood, they're gone. After all, there's no bank Support Desk or Hotline to come to your aid, since there is no bank involved.

In other words, owning Bitcoin requires the utmost attention to security.

Furthermore, the default setting of Bitcoin transactions is that they are irreversible. For now anyway. Once Bitcoin payments are enhanced with so-called Smart Contracts, they can be set to operate escrow-style, so they'll only follow-through when certain conditions are met. When these conditions aren't met (for instance, the item you ordered online wasn't shipped) your funds are not sent to the seller. Smart Contract Bitcoin payments are expected to be enabled once the Lightning Network is powered up, by late 2017 or early 2018. Until then, the irreversibility of Bitcoin transactions is a boon for merchants. As for customers: Caveat Emptor.

Any other potential Bitcoin pitfalls? Though not very likely, governments in some countries may feel threatened enough by Bitcoin to resort to banning it. Whilst this also throttles innovation, economic opportunity and employment growth, typically, it's the more dictatorially-inclined governments that follow this path. More constitutional nations have been showing to be more laissez-faire about Bitcoin, mostly because they know they're competing with other countries in the Bitcoin stakes.

This is probably the reason that cryptocurrencies in general, and Bitcoin in particular, are for the most part unregulated or at most underregulated as of yet. This may change in the future of course, depending on how things play out.

Still, although it sounds ominous, in all likelihood, government regulation of Bitcoin is going to have a positive effect on Bitcoin's utility and hence its value. The reason being that regulation, provided it's not too stifling of course, will lend more credence to Bitcoin, both as an investment vehicle and as a currency. This will subsequently result in the Bitcoin ecosystem becoming more legitimate, which, in turn, will further improve confidence levels amongst investors and the public at large. And will undoubtedly act as a volitility dampener too.

Hopefully, the pros and cons of Bitcoin are now a little more clear. Bottom line: It's safe to say that Bitcoin is here to stay. In fact, if ever the time was right for a global currency it's now. We've already been going cashless for years with credit cards and debit cards, and now we're even conveniently tapping our payments on the bus, at the cafeteria teller and when we're shopping. Most of us go for days without any paper money, let alone coins, passing through our hands.

Bitcoin is the logical next step, the culmination of the digital age we're in. One single currency for the entire world. Bitcoin.



Disclosure
I wrote the above article myself and it expresses my own personal opinions and views on Bitcoin. I am unable to guarantee that the information and/or results will be correct. Furthermore, whilst I own some cryptocurrencies, I do not receive compensation for my writing and I have no business relationship with any of the companies mentioned in above article. In addition, I am not an investment advisor and above article is for purely informational purposes. Investors are advised to personally undertake adequate due diligence, or to consult a financial advisor in order to determine what assets - if any - are appropriate to invest in.

Bryan
Bryan, a Singapore PR, has spent two separate stints in Singapore, spanning close to two decades. As is the case for most non-techies, although Bryan's first exposure to Bitcoin was around 2010, it wasn't love at first sight. However, Bitcoin's impressive resilience, meteoric rise and world-changing potential have converted Bryan, to the extent that he has now pivoted to fully commit to Bitcoin.

By all means publicize above article in your blog or magazine. A link back would be appreciated.


 


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