So what is the point of bitcoins? by Michael Tozoni | Aug 20, 2013 | Uncategorized | 0 comments They’re usually not profitable to mine directly, but consider all the advantages and uses Bitcoin has, such as (some excerpted from www.whyisntbitcoinworthless.com): Bitcoin is easy to store with full, direct ownership, instead of trusting a bank to store and send money for you The coins are stored in a string of characters, meaning you can save them or back them up onto a sheet of paper, store them inside a program (individual/independent programs are now able to keep and spend, and maybe even earn, their own money), or even memorize the characters/password and store all your coins right in your head. Imagine being able to carry all your wealth with you, wherever you go, completely undetected. Since you have full control and ownership of your coins, you can spend them on whatever you want, and send them to anyone in the world with internet access, like for remittance, or to buy web services and not be limited to just your country. (PayPal/VISA block access to many countries, and block you from buying certain goods and services, even if they’re legal) There are many places in the world (mainly in third world, and especially in Africa) where there is no banking infrastructure, or it’s extremely difficult for poor people to open bank accounts. At the same time, those places already have internet and lots of cell phone use. Those things are all that Bitcoin needs to work, so those people who can’t open banks to safely store their money and receive payments, can very easily “open” Bitcoin accounts by just installing software on their phones (in some countries this is also great for circumventing corrupt governments or organized crime). Cash is an issue there, too, because when you are living on $3 a day, you need a lot of pennies, nickels, and dimes, and those are in short supply, meaning sometimes people wait for an hour or more to get change. Bitcoin is digital, so division is not a problem. Sending bitcoins back and forth costs very little (fractions of a penny), and a lot of times it’s free. Even to swap between bitcoins and local currencies is most of the time extremely cheap, costing 0.5% to %1. So, even as an alternative to VISA and PayPal, who charge 2.5% to 3% per transaction, converting from local currency to bitcoin, sending those bitcoins to someone else, and having them convert it to their own local currency, is still cheaper (2% plus half a penny at most). If you use Bitcoin, you don’t have to worry that the other person uses the same service. If the merchant accepts PayPal, I have to make sure I open a PayPal account too, and put up with all the fees, restrictions, and BS they force on their customers. If the merchant accepts Bitcoin, they could be using BitPay, Coinbase, or BIPS, and I’m free to use Coinbase, CampBX, or a slew of any other USD to BTC services. And if I don’t like the fees or terms, I can just switch to someone else, and still pay the merchant. Both of us have complete freedom with whom we do business with. Besides its use as money, Bitcoin can also be used as a notary system. Say I create a digital document, and I want to prove that I own it, AND that I created it on a specific date. Normally, you would print it out and mail it to yourself in a dated envelope. Then if there are any doubts (such as copyright dispute), I would open the envelope and show proof of date, but destroy the proof in the process. With Bitcoin, I can create a signature (hash) from the digital document, and add that signature text, along with a small Bitcoin transaction from my address, right into the bitcoin blockchain. That way everyone can always check the signature hash in the blockchain against my document to have proof that it was created on that day, and see my address as proof that I created it. This can be used in a ton of other legal related ways. For instance, a borrower and I created a lending contract, along with borrower and repayment Bitcoin addresses, and both signed the document using our respective addresses (which anyone can verify). Then I sent him his loan to his borrower address, and he sent repayments back to my repayment address. That way, everyone can publicly see that we both agreed to the contract, and since all Bitcoin transactions are public, everyone can see that the loan was sent out, and repayments were made, even without actually knowing who both of us are. Neither of us can claim the other didn’t do something. A tiny (almost worthless) fraction of a Bitcoin can be marked with an index, and be tracked wherever it goes through various addresses. Using this setup, a corporation can mark a bunch of Bitcoins, link them to the company’s own stocks or bonds, and sell those coins to the public directly. After people buy them, they are free to trade and send them all over the place, and they can always be used as proof of stock/bond ownership, and redeemed back for cash from the company. Basically, all the services that stock brokerages and investment banks provide can be done with Bitcoin itself. You can even use this setup to tie a deed to a house or a title to a car to a specific Bitcoin, and have an electronic key that checks ownership of said Bitcoin before it opens the house or starts the car. In that way, you can prove ownership of your car, and pass it to someone else just by sending them the Bitcoin to their key. These and a ton of other possibilities make Bitcoin have enormous potential for a whole slew of things, and with little, if any, competition. And right now, barely anyone still even knows about it, but there are already a lot of millionaires dumping money into developing services for it. In other words, it’s at a stage where it’s unknown, but it already has so much capital behind it that it won’t be allowed to die. So, it’s worth getting into if you need any of those services or benefits that Bitcoin offers, and, since it’s limited in quantity, it’s probably very worth investing in, just because of it’s crazy growth potential. Submit a Comment Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.