Advantages of Bitcoin

For many people, myself included, Bitcoin is one of the best inventions in history and addresses real needs compared with traditional money (fiat), which also has its good uses.

So, in this article I explain all the advantages of BTC, so you understand when it makes sense to take advantage of them and when it is better to invest in, manage or use another type of financial asset.

Advantages of Bitcoin compared with fiat money

The first advantage is that it allows value to be transferred without needing a financial institution.

If a transaction has a valid signature and follows the rules, it can propagate through the network and end up included in a block. This lets us send money (bitcoins or satoshis) between two wallets.

The second is that it allows self-custody. You can keep the keys in your own wallet and not depend on a bank or exchange allowing you access. It reduces dependence on a specific provider and, with it, the difficulty of seizure.

The previous advantage leads to another: greater privacy and the possibility of anonymizing your assets. It is possible to buy bitcoins anonymously so that nobody knows you have them.

If you combine the previous three advantages, what you get is a great way to make donations or leave inheritances.

Another key point is the predictability of its issuance. The maximum number and the rate at which new bitcoins are created are defined in the protocol and can be verified. This has an anti-inflationary effect.

The network operates globally and continuously. A bitcoin is a bitcoin in any country in the world, with no currency exchange. It also operates 24/7 and more or less immediately (minutes).

Another advantage is portability. You do not need to transport banknotes, bullion or physical documents, only keep the keys secure.

It combines direct control and digital transfer. Cash gives you direct control, but it is inconvenient for large amounts and cannot be sent over the Internet. Bank money is digital, but the institution keeps the record and can block or limit movements. Bitcoin lets you send a digital asset that you can custody yourself.

These advantages do not mean that Bitcoin is better for everything (for now). Fiat money is more convenient, more stable and much more widely accepted, and it also offers recovery or complaint mechanisms where applicable, something you cannot do with Bitcoin.

That is why it is worth understanding both and taking advantage of the strengths of each type of money (fiat and crypto).

Advantages of Bitcoin compared with other cryptocurrencies

Bitcoin was the first to maintain a decentralized and secure network over a prolonged period. That made it the leading cryptocurrency.

Its objective is relatively limited: to maintain a secure, verifiable monetary network that is difficult to change. It does fewer things than platforms such as Ethereum or Solana, which are designed to run complex applications, but that simplicity, far from being a drawback, reduces the likelihood of drastic changes or errors.

It also has the largest ecosystem of users, nodes, miners, developers, companies and liquidity in the crypto world. This matters because of the network effect: the greater the volume of users, the more value is created.

With issuance limited to 21 million, in the long term, bitcoin does not lose value. This is the opposite of what happens, for example, with Solana, which is an inflationary cryptocurrency by default.

For all these reasons, if you like the crypto world and want exposure to only one of its currencies, choose Bitcoin over any other without a doubt.

Next steps

Below are the next articles in the series. They are designed so that, if you do not know much about Bitcoin, you read them in order, but they are all independent, so you can jump to whichever interests you most:

Frequently asked questions

What are the main advantages of Bitcoin?

Its advantages include the ability to transfer value without a financial institution, self-custody, predictable issuance, global 24/7 operation and the ease of transporting value through digital keys.

What advantage does Bitcoin have over a bank?

It allows value to be sent directly between wallets without needing a financial institution to authorize or record the transaction.

What does it mean that Bitcoin allows self-custody?

It means you can personally control the keys needed to access and move your bitcoins through your own wallet, without depending on a bank or exchange.

Can a bank block my bitcoins?

If you keep your bitcoins in self-custody, they do not depend on a bank account that can block the funds. If you keep them on an exchange or with another custodian, however, you do depend on that intermediary.

Why is Bitcoin issuance considered predictable?

Because the rules that determine how many bitcoins are created and the maximum limit of approximately 21 million are defined in the protocol and can be verified.

Does Bitcoin operate 24 hours a day?

Yes. The Bitcoin network operates continuously, every day of the year and without depending on bank or market opening hours.

Can Bitcoin be sent to any country?

Yes. The same network operates globally and lets bitcoins be transferred between wallets regardless of the country where their owners are located.

Do bitcoins need to be exchanged into another currency when sent to another country?

Not within the network itself. A bitcoin remains a bitcoin regardless of the country, although the corresponding exchange rate may apply when buying or selling it for fiat currency.

How long does a Bitcoin transfer take?

A transaction can propagate quickly through the network and receive its first confirmation when it is included in a block. In practice, the time depends on network activity and the fee used.

Why is Bitcoin easy to transport?

Because you do not need to physically transport banknotes, bullion or other objects. What matters is securely keeping the keys that allow access to the funds.

Is Bitcoin better than fiat money?

Not for everything. Bitcoin offers advantages such as self-custody, predictable issuance and global transfers, while fiat money is usually more stable, accepted and convenient for everyday payments, as well as offering complaint and recovery mechanisms.

What advantage does fiat money have over Bitcoin?

Traditional money is much more widely accepted, usually has lower volatility and has intermediaries that can offer mechanisms to recover access, dispute transactions or resolve certain problems.

Why does Bitcoin stand out from other cryptocurrencies?

Because it was the first cryptocurrency to maintain a decentralized and secure network over a prolonged period, and it has a very broad ecosystem of users, nodes, miners, developers, companies and markets.

Why is Bitcoin considered the main cryptocurrency?

Because of its age, security, decentralization, liquidity, the size of its ecosystem and its network effect within the cryptocurrency market.

What advantage does Bitcoin have over Ethereum or Solana?

Bitcoin has a more limited objective: to maintain a secure, verifiable monetary network that is difficult to change. Ethereum and Solana are also designed to run applications and offer more features.

Is it a disadvantage that Bitcoin does fewer things than other cryptocurrencies?

Not necessarily. According to the article's approach, that simplicity can be an advantage because it reduces system complexity and the likelihood of drastic changes or certain errors.

What is Bitcoin's network effect?

It is the advantage the network gains as the number of users, companies, nodes, developers and services using it grows. The larger the ecosystem, the easier Bitcoin is to use.

Why is the limit of 21 million bitcoins important?

Because it makes the maximum supply known and limited. This distinguishes Bitcoin from assets or currencies whose quantity can increase indefinitely.

Is Bitcoin an inflationary cryptocurrency?

Its issuance of new coins decreases over time and there is a maximum limit close to 21 million bitcoins. That makes its monetary policy very different from cryptocurrencies with ongoing issuance.

Is Bitcoin the best cryptocurrency to invest in?

The article considers Bitcoin the preferred option if you want exposure to a single cryptocurrency because of its security, decentralization, liquidity and network effect. That does not eliminate risk or guarantee that its price will rise.