Why Do People Buy Bitcoin: A Guide into Cryptocurrency
Cryptocurrencies are quickly gaining traction and popularity as an alternative asset to invest and transact in. Learn more about crypto and Bitcoin.
Planning yourself to buy Bitcoin is a great decision. Many people and Kiwis specifically have been trying Bitcoin as their new currency, investment, or part of their pension plan. And the cryptocurrency is thriving well in New Zealand and the world, so it would be valuable if you start to get to know about Bitcoin.
Bitcoin is the world’s best-known cryptocurrency. First launching in 2009, Bitcoin has since become the best performing consumer investment of the past decade. The only question is why do people buy Bitcoin here in 2020?
Do Kiwis only buy Bitcoin in the hope that prices will keep rising? Or does Bitcoin have other practical uses?
To answer this question, we’ll look here at some of the key reasons why people buy Bitcoin. We’ll also look at how the digital currency can be used and, of course, how you can buy Bitcoin yourself.
Why do people buy Bitcoin?
For the most part, people buy Bitcoin to invest long-term or start trading coins on cryptocurrency exchanges. However, Bitcoin also has several practical uses as a currency in its own right.
What is the advantage of Bitcoin in terms of transaction?
If you have ever sent money overseas, you will know that doing so isn’t always easy.
In New Zealand, most international wire transfers take between 1 – 4 days for banks to process. Most NZ banks also charge either a flat $20 fee on transfers, or a total fee equivocal to 2% or 3% of the full transaction amounts.
Fees for international money transfers might seem negligible. However, sending or receiving $10,000 can see you pay a minimum fee of $200.
When sending or receiving money, there is always the possibility that banks will freeze transaction amounts. (If they have reason to suspect money laundering).
In business transactions, it is often necessary to pay extra fees to use Escrow services to prevent fraud.
Fees on money transfers are a nice earner for NZ banks. However, for you as a Kiwi, fees can hit you hard on the pocket. Thankfully, Bitcoin solves this problem.
Fees for sending Bitcoin between wallet addresses fluctuate. However, at present, sending $10,000 of Bitcoin anywhere globally will cost just $1.40 (USD).
Most Bitcoin transactions settle within 60-minutes. However, it is possible to settle transactions faster by paying a slightly higher fee.
Unlike with bank transfers, transaction amounts can’t be frozen by banks. Transactions are also instantly verifiable when complete.
What are the top reasons people buy Bitcoin?
Are you thinking about buying Bitcoin in 2020? If so, there are hundreds of different reasons why this might be the case. However, at present, your main reason might rest with you wanting to hedge against financial uncertainty.
As it stands, Bitcoin is widely accepted as a hedge against financial uncertainty for several reasons.
• Whereas cash is inflationary and loses value over time, Bitcoin is deflationary and increases in value, similar to how gold does.
• Unlike with cash, banks or governments can’t seize Bitcoin from you in the event of a financial crisis.
• Bitcoin is easier to buy, store and transact with, than traditional safe-haven assets like precious metals.
How does Bitcoin work against fraud?
In New Zealand and elsewhere, it is common to hear the media refer to Bitcoin as a currency for criminals. However, in reality, using Bitcoin helps fight fraud.
At present, chargeback fraud (where people reverse payments with banks after making purchases) costs global businesses $25 billion each year.
Chargebacks occur at a rate of 3.24%. This means that if you are a business, you can expect 3 out of every 100 transactions to be fraudulently reversed.
Most people who petition banks to reverse payments do so for high-value purchases.
At present, there is no easy way for businesses to fight chargebacks. This is because over 94% of chargeback claims result in banks reversing payments in favor of consumers. However, with Bitcoin, it is simply not possible to reverse payments for goods or services.
Once a Bitcoin transaction settles, recipients of funds are the only people who can agree to reverse payments.
Thanks to the Bitcoin transaction ledger being public, all Bitcoin transactions are also independently verifiable by consumers and third parties.
Because it is not possible to reverse Bitcoin transactions, Bitcoin is accepted by businesses in New Zealand as a form of payment. It is also increasingly used by entrepreneurs and individuals to settle high-value transactions.
Is Bitcoin a good investment for my pension plan?
If you are thinking about investing in Bitcoin, the one thing deterring you is likely the volatility of the cryptocurrency market.
The Bitcoin price can fall sharply at any moment. Timing when to enter and exit the market can, therefore, be incredibly difficult. In the long-term, though, Bitcoin tends to accumulate rather than depreciate in value. Because of this, many people are starting to invest in Bitcoin as part of their long-term retirement strategy.
In 2019, several prominent pension funds began investing heavily in digital assets.
In Fairfax County, Virginia, the local Police Department has invested $55 million in a Morgan Creek cryptocurrency backed pension fund.
Last year, it became legal to pay salaries in Bitcoin here in NZ. Some, therefore, believe that more NZ pension funds will start diversifying into cryptocurrency in the near future.
Where can I buy Bitcoin in New Zealand?
If you are a Kiwi or resident of New Zealand with an NZ ID, Easy Crypto represents the best place to buy Bitcoin in 2020.
Easy Crypto is New Zealand’s most widely trusted homegrown exchange. More importantly, by being local, Easy Crypto makes it possible to buy Bitcoin faster and more affordably than on any other exchange.
Providing that you have your NZ passport or driving license ready, you can create an account at Easy Crypto in seconds. Best of all, when you buy Bitcoin at Easy Crypto, you only ever pay the going market rate for Bitcoin, not a hefty premium.
Find out for yourself how easy it is to buy Bitcoin at Easy Crypto New Zealand by visiting this link.
Is it a good idea to buy Bitcoin?
As it stands, no one can say with any degree of certainty whether now is or isn’t a good time to buy Bitcoin. This is why if you are planning to invest, you shouldn’t risk more than you can realistically afford to lose.
Thankfully, many people believe that because Bitcoin has been such a success over the past decade, the future for the digital currency is bright. Just remember that if you do buy Bitcoin in New Zealand, it will also be vital for you to learn how to store and transact Bitcoin safely.
Now that you finally know everything about Bitcoin, how do you feel about trying it? Do not hesitate to contact Easy Crypto team to ask for more information. We are always ready to help.