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- How does bitcoin affect the economy in Europe?
- Positives of bitcoin on the European economy:
- The safer way to trade online
- Cheaper transactions
- No Taxation issues
- Payments can be made anywhere in the world.
- No risk of inflation
- Cheaper transactions
- Instant payouts
- Better returns on investments
- Transactions can be monitored and stopped
- An affordable way to send money:
- No country bound:
- 8 Negative reasons that affect the European economy:
Reading time: ~4 minutes
This article will learn about bitcoin and its operations in Europe. Media accepts Bitcoin, economists, and business people as a valuable currency. This currency has no central bank and is not linked to any country’s currency.
How does bitcoin affect the economy in Europe?
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Positives of bitcoin on the European economy:
As the demand for bitcoin is increasing, experts believe that it will affect the economy of Europe.
The safer way to trade online
Bitcoin uses blockchain technology which is anonymized while trading, so your details remain hidden while making transactions over the internet. Also, since there is no central bank for bitcoin, it cannot be tracked back to any individual. So your account is more secure and anonymous as you trade on blockchain.
You can quickly transfer money from one account to another without paying the expensive fees which traditional banks charge. Moreover, you need not wait in a queue for days to get your transaction approved. Instead, you can get your transaction approved within a few minutes and start making transactions.
No Taxation issues
Bitcoin gives you complete control of your money, free from taxation and bank charges. So there is no need to pay heavy taxes on the money you make or receive money in the country’s currencies. It’s completely hassle-free and free for you. For more information, check Quantum A.
Payments can be made anywhere in the world.
Since there is no central authority governing bitcoin, it doesn’t matter where the recipient is located initially. So you can transfer money to your loved ones or business partner who lives thousands of miles away without issues.
No risk of inflation
As far as bitcoin is concerned, there is no concept of inflation. Every bitcoin in circulation has to be mined through complex mathematical algorithms. Moreover, the number of bitcoins in circulation cannot exceed 21 million coins, ensuring that your money keeps its value.
Bitcoin transaction fees are meager when compared to traditional bank transaction fees.
Blockchain technology ensures that your funds are available to use instantly after the transaction is approved, minus the waiting period, so you need not wait for days or months to get your money transferred. Also, payment can be made any time of the day, which means even at midnight, you can complete a transaction and get funds instantly.
Better returns on investments
Since bitcoin is available in limited supply, its worth increases with time, so if you invest now in bitcoin or any other cryptocurrency, you will get a good amount of return on investment compared to traditional currency in the bank.
Transactions can be monitored and stopped
Bitcoin gives you complete control of your transactions so that any suspicious activities can be stopped right there. This means you have the power to monitor and approve or prevent a transaction anytime.
An affordable way to send money:
Transferring funds through bitcoin is cheaper, although it might not seem like that compared to traditional banks, which don’t charge much for it. It was a lot cheaper.
No country bound:
There is no central authority governing bitcoin. It doesn’t matter where the recipient is initially located. So you can make transactions with your loved ones or business partner who lives thousands of miles away without issues. These are some reasons why you should invest in cryptocurrency, especially bitcoin.
8 Negative reasons that affect the European economy:
Legal and regulatory issues:
Every country has its own rules and regulations to govern financial transactions. This could lead to other countries also banning such currency, which will affect the economy of Europe.
Technology cannot be 100% fail-safe and always work in people’s favor. Furthermore, as blockchain technology is relatively new, it might have a few bugs that can affect your money. This might lead to massive losses for traders who invest in bitcoins.
Some of the bitcoin exchanges have taken necessary security measures to ensure the safety of their client’s money, and they are still not perfect. This might lead to massive losses for traders and countries relying on bitcoins as a currency.
The transparency of bitcoin increases day by day, due to which it is being used more and more by people. But still, it is not fully transparent, and the anonymity of traders can be affected, which might lead to money laundering issues for countries like Europe.
Competition to fiat currency:
Bitcoin poses a massive threat to the economy of Europe in the future. As bitcoin is getting more popular day by day, it might take over traditional currencies in the coming years, affecting Europe’s economy.
Negative effects of bitcoin on banks:
Most European Banks rely on lending. When people start investing in bitcoins, they tend to stop using their bank accounts for transactions, which leads to more bad loans and money loss for the banks. This might put European Banks into a financial crisis in the future.
Bitcoin is not regulated by the government:
The security and authenticity of transactions cannot be governed. This might lead to money laundering issues for European countries in the future.
Bitcoin can be misused for money laundering:
Bitcoin has the advantage that it doesn’t reveal the identity of people who are using it. However, it is being used by money launderers who transfer black money from one hand to another without any difficulty. This might lead to severe issues for the economy of Europe in the future if such activities continue with their increase in popularity.
In this way, it can be concluded that although bitcoin is on the rise in Europe, it needs some time to become entirely perfect and find a way to preserve its transparent nature. Only then will the economy of Europe benefit from bitcoin and cryptocurrency in general.
Bitcoin is a great invention, but its implementation and awareness among people of the European continent need to be increased to better their economy. In this context, the governments of European countries need to focus on advertising bitcoins in mass media so that financial transactions done by citizens remain under strict scrutiny, which will ensure transparency in the economic system and prevent money laundering issues.
Thank you for reading!