In most ways, using bitcoins works the same way as using paper money, but with some key differences. Bitcoins do not exist in its physical form, as their primary form of existence is digital. They reside on your wallet or with any online service provider.
As bitcoins are currency, many businesses accept them. In fact, certain businesses accept only bitcoin as the mode of payment. That said, bitcoins are being used for multiple other purposes — and the rabbit hole goes pretty deep. Let’s dive into some of them.
#1 — Long Term Investment
The value of Bitcoins has soared up high in the last few years hitting many high records. In early May of this year (2017), the value of a single Bitcoin increased to almost $3000.
However, many are hesitant to invest in bitcoins due to its high volatility — it tends to fluctuate a lot in price. Also because Bitcoins aren’t backed up by precious metals or banks. Yet, even with all of this, investment in Bitcoins can be a worthwhile endeavor. You just need to have a slightly long term outlook.
Firstly, bitcoins are experiencing incredible growth. Though there have been large fluctuations, and even theft of funds that had taken place in the past, rapid price recoveries have been staged and bitcoins have come back to their place giving investors massive returns.
Secondly, the supplies of Bitcoins is fixed. 21 million bitcoins are scheduled for release in entirety, nothing more or nothing less. But the number of people getting into bitcoin trading is only going to increase. With limited supply and ever-increasing demand, the price can only go up. With a stable monetary base and a stable economy, the value of Bitcoins will never reduce.
Finally, Bitcoins may be a very effective way to diversify your investment portfolio. Bitcoins have sprung up into the world, making their way into the mainstream news today. Bitcoin is now being used for everyday transactions, international trading and for many other services. In turn, this has strengthened digital currency steadily.
“More and more investors are looking for unique opportunities outside the traditional arena,” writes Bobby Cho for The Street.
#2 — Short Term Trading
A long term perspective on bitcoins makes perfect sense. But for a trader, short term trades can be lucrative too.
Bitcoin trading can be profitable for both professionals as well as beginners because the market is fragmented with huge spreads and widely available margin trading. Also, compared to most other financial instruments, Bitcoin trading has limited barrier for entry.
Firstly, unlike stock markets, there are no official Bitcoin exchanges, because of which there is no official Bitcoin price creating huge arbitrage opportunities.
Secondly, Bitcoins are volatile. They are known for their rapid and frequent price movements creating quick opportunities for traders to reap profits at any point of time.
And finally, Bitcoins aren’t fiat currency, that is, their price isn’t directly related to its economy or policies of any country. So Bitcoins are used globally, making trading simpler.
Note: Bitcoins are subject to market risks. It is highly advised to put only the money that you can afford to lose.
#3 — Pay for Goods & Services
If you’re not getting your hands on them for pure investment, bitcoins can be spent for multiple things just like any other currency.
Physical goods can be bought with bitcoins. There exist a large number of online e-commerce sites that provide Bitcoins as a payment option for a variety of digital content like apps, games, videos, electronics, gadgets etc. across their online platforms. A few of them include Microsoft, Dell, Newegg, TigerDirect and much more such companies.
You could also be using bitcoins to obtain discounts. Purse is a peer-to-peer marketplace which match individuals wanting to buy items on Amazon at a discounted price with those wanting to buy bitcoins with a credit card or via PayPal. The service claims a potential discount up to 20% for bitcoin shoppers.
Bitcoins could also help you pay for bigger ticket transactions like hotel payments and properties globally. This avoids the need for currency conversions and also the need to carry hard cash everywhere. Notably, Expedia has announced that it will now accept Bitcoin for all hotel bookings, making it the first major travel company to accept payments in cryptocurrency. Other hotels who accept Bitcoins for their booking include Holiday Inn (New York), One Shot Hotels (A Spanish Chain) and many others.
#4 — Charity
Finally, bitcoins can also be used for donations! There are a number of sites that provide the opportunity to donate Bitcoins for a good cause.
Much can be done with bitcoins, especially with its emerging values and opportunities. The big question is — “How will you use it?”
Whatever you plan to do though, you’ll need to get your hands on bitcoins in the first place to begin with, and Unocoin is the perfect place to start!