Is Bitcoin Actually Useful?

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Contributor, Benzinga
October 18, 2021

Bitcoin is the most popular blockchain, supporting transactions and users from across the globe. Many cite the possibility of Bitcoin adoption as a reason to invest or support the project. Supporters say that Bitcoin may be the future of finance. However, opposers of the project often raise questions about the usefulness of Bitcoin. Is it as useful as some say? Where can Bitcoin actually be used?

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What Is Bitcoin?

Bitcoin was created in 2008 by the anonymous Satoshi Nakamoto in response to the recession of 2008. It gained traction and became the largest cryptocurrency in the world. Bitcoin is designed to be both a store of value and a tradeable currency. 

Bitcoin uses a peer-to-peer network to process transactions and complete tasks. This process allows users to send BTC to any other individual on the blockchain without needing a third party to verify transactions. Transactions are verified by users across the globe through a proof-of-work (PoW) system. Individuals can contribute computing power to the network and earn rewards for doing so. 

Because Bitcoin can be used in multiple scenarios, many say that its use cases may lead to widespread adoption. 

Bitcoin Use Cases

Bitcoin is not only a currency. It has several use cases that are important to be aware of for the future of crypto. 

Bitcoin as a Store of Value

Currently, the largest use of Bitcoin is as a store of value. This term means people can invest in Bitcoin and attempt to gain a return on their investment. As of today, BTC is up over 425% on the year. Apart from a few minor setbacks, BTC has almost always risen over the long term. It currently has a market cap of over $1 trillion. Many BTC holders are in profit. 

Bitcoin is also a different way to store money than more traditional stores of value (value stocks, precious metals, etc.) Bitcoin is a far more trustless investment than traditional investments. This quality can be alluring for those looking to invest money away from banks and brokerages, as you can truly hold custody of your digital assets.

Because Bitcoin is very different from traditional investments and can be profitable, many investors use Bitcoin as a store of value. 

Bitcoin as a Form of Payment

As previously mentioned, Bitcoin operates on a peer-to-peer network. This setup means transactions can be sent anywhere at any time, which is useful in a variety of scenarios, ranging from supermarket purchases to investment banks. 

Bitcoin payments could be used to process everyday transactions. Buying groceries, paying for insurance and even buying a house are all possible through Bitcoin payments. Currently, 36% of small-to-medium businesses accept Bitcoin as a form of payment. Some of the most notable large companies are Microsoft Corp. (NASDAQ: MSFT) and AT&T Inc. (NYSE: T). Larger institutions could also use Bitcoin to process big transactions securely and quickly. 

However, transactions on the chain need to be verified. This process costs money and is part of all Bitcoin transactions. The verification process limits the usability of Bitcoin as transactions may cost more than cash or credit purchases for micro-payments. 

Decentralized Finance (DeFi) on Bitcoin

Stacks is a project that is aiming to provide more uses for Bitcoin. It allows for smart contracts to be integrated with Bitcoin. Smart contracts are programs that use conditionals to automate tasks on the blockchain. Stacks is hoping to allow users to create its own smart contracts on the chain.

This advance would allow DeFi to become more available on the Bitcoin network. Users could create smart contracts with a variety of uses, ranging from business to data analytics. 

DeFi is one of the most useful aspects of crypto. It allows crypto to make real world impacts. Many of the most adoptable projects are using DeFi to improve their networks. Bitcoin is seeking to use DeFi to bolster the amount of uses the project can have. 

Peter Schiff on Bitcoin

Not everyone is a supporter of Bitcoin. Those who oppose the project say that it is hard to see value in a currency that is intangible. Debate also rages surrounding how much 1 BTC should be worth. 

One of the largest opponents of Bitcoin is American stock celebrity, Peter Schiff. He said of Bitcoin that “at the end of the day when you peel the onion and get to what’s really there, there’s nothing there.” He says that there is nothing to support the price of the cryptocurrency. Because of this, he does not see the project being used in most scenarios.

The lack of regulation in the crypto sphere is also a factor. Government entities have little say in what happens with crypto. While having no regulation can be a major selling point for the decentralized asset, it can also be a problem. If fraud or security breaches occur on the network, governments will be unable to provide much assistance. 

Where To Buy Bitcoin

If you believe in Bitcoin and the future of cryptocurrency, you may be interested in purchasing BTC. Luckily, buying BTC is extremely easy. It is by far the largest cryptocurrency. Because of its size, almost all crypto exchanges offer BTC. However, a few brokerages stand out due to low fees, usability and focus on education. 

eToro, Webull and IBKR are great options for those looking to purchase BTC. Opening an account is fairly simple, typically only requiring an email or phone number and funding source. However, all crypto brokerages vary, so do some research to decide which broker best suits your needs. 

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So, Is Bitcoin Actually Useful?

Bitcoin is the largest cryptocurrency, with millions of buyers investing over $1 trillion in aggregate into the cryptocurrency. However, many are hesitant to invest in Bitcoin, citing a lack of uses. As of right now, Bitcoin is mainly used as a store of value and a form of payment. If it can begin to adopt more uses in the DeFi sphere, Bitcoin may become even more useful as a financial tool. 

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About Caden Pok

Caden has been involved with cryptocurrency for several years. He began trading and investing in crypto in 2018. Now, we mines multiple coins and holds positions in Cardano and Ethereum. He is very experienced with DeFi technology.