LONG TERM SAVINGS

Its volatility has captured the attention of greedy investors who contribute to its rapid price increases. They end up buying out of greed but staying for its promise, which means as time goes by, Bitcoin becomes a stable network of enthusiasts that won’t easily sell its native asset, thereby improving its soundness. 

TRADING

Like every asset with value, bitcoin has become one of the most traded holdings in recent years. There are plenty of tools available for anyone who wants to begin trading, and many traders have turned it into their primary source of income by learning strategies to take advantage of its famous volatility. The common goal for traders is not to grow their capital in fiat terms but to increase their bitcoin holdings.

INFLATION HEDGE

Bitcoin has grown as a hedge against long-term inflation. Unlike traditional currencies that lose purchasing power over time, the cryptocurrency has proven resistant to such market conditions thanks to properties like scarcity, increasing technological accessibility, and durability. 

REMITTANCES

By removing intermediaries and enabling borderless payments through the Lightning Network, Bitcoin is growing as a tool to facilitate remittances. Emblematic is the growth of remittances in El Salvador, where the cryptocurrency was adopted as legal tender in 2021, and remittances account for 24% of El Salvador’s GDP. The country could represent a testing marketplace for international remittances in other countries.

COLLATERAL

Decentralized finance (DeFi) is an emerging and fast-growing branch of finance used to secure mortgages, refinancing, and other services where bitcoin can be used as a collateral asset to secure funds in different currencies or assets. While this is still a grey area for many who offer traditional financial services, bitcoin as collateral is already operative and widely used by cryptocurrency supporters.

PAYMENTS

Layer 2 (L2) protocols have been created to tackle the scalability issue and offer faster and cheaper off-chain payments than Bitcoin’s base layer (L1). The best two examples that have been developed are the Lighting Networkand the Liquid Network.

ENERGY MONETIZATION

A monumental breakthrough in energy production is happening right before our eyes. What has typically been seen as a huge problem due to excessive mining power consumption is becoming an advantage for Bitcoin. 

The idea is to exploit excessive renewable sources of energy production, monetize the surplus supply of the power output and make the project cleaner and more cost-effective. Miners are particularly fitted for such a scheme since they can move and settle where the power is, even in remote areas, to fill gaps, thus driving a clean energy transition.

It’s a win-win situation for the miners who get plenty of cheap energy and for the energy providers who manage to sell surplus electricity that would go wasted otherwise.

Source: Bitcoinmagazine