Bitcoin has been gaining popularity from all corners of the world, especially in Canada, because it simplifies sending and receiving money, no matter how large or small the transactions are. Visit https://bitcoinsevolution.app/ for more info.
As a result, some experts have viewed this as a threat to the traditional financial system because it was designed to compete with them in every way.
7 positive effects of bitcoin that benefits the value of the Canadian dollar:
It is estimated that more than 100,000 businesses and organizations worldwide now accept bitcoin as a form of payment. As a result, it has been steadily rising, rising demand for the Canadian dollar.
The value of the Canadian dollar has dropped over the past few months due to various factors such as the country’s high debt and robust economy in emerging countries such as the emerging economies of China and India, which is affecting the price of commodities in Canada.
The value of bitcoin may not offset that, but it can certainly reduce the impact on the Canadian dollar.
- The limited number of bitcoins that can be mined (21 million) will mean prices will rise and this, in turn, increases the value of the Canadian dollar.
- The creation of ripple, another kind of virtual currency, means it will create more competition to the Canadian dollar, thus, increasing its value.
- It has been established that bitcoin cannot be inflated by governments printing more money. This is because there are a set number of bitcoins that can be mined, and the rate at which they are mined will continue to decline over time, making inflation impossible.
- The value of bitcoin cannot be manipulated by central banks or governments who may want to devalue their currency to promote exports or inflate the money supply.
- It is virtually impossible for anyone, including governments, to seize your assets since they are held in a digital wallet that you control and not on a specific exchange or bank, meaning the government can’t take it from you.
- The confidentiality of bitcoin transactions is something that many people have started to appreciate.
- Lastly, transactions with bitcoins cannot be reversed! Once it has been confirmed; It is yours.
This is because bitcoin exists virtually and does not depend on any physical form like the Canadian dollar, which relies entirely on the faith of its users that it’s worth something.
8 negative effects of bitcoin on the value of the Canadian dollar:
- Bitcoin is still vulnerable to hacking and security breaches since it’s not regulated by any central agency, which makes the digital currency extremely insecure.
- As more businesses start accepting bitcoin, there will be an increase in money supply, thus inflation of prices which will devalue the Canadian dollar.
- The most concerning factor that can affect the value of bitcoin is how it can be stolen and lost. For example, if a hard drive crashes and you don’t have printed copies of your passwords, you can lose everything overnight.
- Since there is no central agency to regulate the use of bitcoins, any government or organization may ban its official use at some point in the future.
- Bitcoin is still in its infancy and freely traded on several freely-available exchanges, which can be very volatile. Volatility reduces its usefulness as a currency since companies will constantly have to revalue their products according to fluctuations in price.
- Even though there’s no central agency, the supply of bitcoins is regulated by the self-interest of those who process transactions. This implies that no set number of new bitcoins will be produced.
- The value of bitcoin may increase exponentially. Still, it can also decrease at an even faster rate since its value is highly volatile, which may affect the value of the Canadian Canadian dollar.
- Bitcoin is largely unregulated, and the fact that transactions are untraceable may make it even more popular in criminal circles.
Conclusion
The fact that bitcoins are decentralized makes them extremely popular and very dangerous since they are unregulated. This means that no entity is to blame or resolve disputes should anything go wrong.
