What is a Bitcoin (USA Residents Only Edition) feb | Page 7

Bitcoin Pros & Cons
Bitcoin is a currency like no other. In short it's digital money that solves many of the
problems our current currencies suffer from and introduces many other uncertainties
we never had to deal with before.
Benefits
Low inflation risk. One of the biggest problems with our current dollars and
other currencies used around the world is inflation. Over time all currencies lose
purchasing power at a rate of few percents per year mainly because
governments keep printing more money. This process is basically a small tax on
your accumulated wealth. With Bitcoin you don't have this problem because the
system is designed to make Bitcoins to be finite. Only about 21 million Bitcoins
will ever be released (mined). The release of new Bitcoins is slowing down and it
will stop completely within a few decades. We have a slowing population growth
which is projected to stop at around 10 billion by approximately 2050 which
roughly coincides with the last Bitcoin to be mined. There will be roughly 1
Bitcoins for every 500 people.
Low collapse risk. Regular currencies depend on governments which fail
occasionally. Such events either cause hyperinflation or a complete collapse of a
currency, which can wipe out savings of a lifetime in day. Bitcoin is not regulated
by any one government. It's a virtual global currency.
Safe, simple and cheap. The problem with traditional online transactions from
the perspective of the seller is that Credit cards, PayPal you and other online
payment systems allow buyers to claim their money back. You can can use
escrow services but that makes things complicated and slow. With Bitcoins once
you have the money you have it and that's that. Buyers can not in any way take
the money back and the seller can safely ship the product or perform the service
that the client purchased. From the buyer's perspective the infrastructure for
payments and sending money between accounts is potentially going to be
simpler and cheaper because it is peer-to-peer rather than done through some
intermediary.
Easy to carry. Not a real problem that needs a solution, but you can carry a
billion dollars worth of Bitcoins on a memory stick in your pocket. You can't do
that with cash or even gold.
Untraceable. This is both a benefit and a risk for Bitcoin. The benefit is that you
don't have to be afraid of any organization of being able to trace the source of
your funds. This is a clear benefit in many areas of the world because
governments that are supposed to guard against fraud are actually defrauding
people by taking their savings partially or fully. Regarding risks I will discuss
them in the next section.

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