Who Uses Bitcoin? An exploration of the Bitcoin
by Abdul Aziz Mondal Money Published on: 26 October 2017 Last Updated on: 06 May 2021
Bitcoin is a cryptocurrency and is the first decentralized digital currency since it works without a single administrator or a central repository. Developed and released in 2009, Bitcoin has grown significantly in popularity. As of 2017, there are between 2.9 and 5.8 million users who use a cryptocurrency wallet, most of them using Bitcoin. Bitcoin can be exchanged for other currencies or held as an investment. It can also be exchanged for products and services and as of 2015, more than 100,000 merchants accept Bitcoin as payment.
Individuals
Bitcoin is commonly associated with crime, such as cybercrime, drug dealers and money laundering because it is almost impossible to link a bitcoin wallet with an individual. However, its use is certainly not limited to criminals and it has grown in popularity among all people around the world, now being used for plenty of legitimate purposes. Commonly, it is used to transfer cash without fees to individuals or merchants, as an investment or even to fund companies. The list of merchants that accept bitcoin as payment is growing all the time and there are now even bitcoin ATMs where they can be withdrawn. Other people, simply collect their bitcoins and hang on to them, in the hopes they will make money from the investment, and indeed, many people have.
Merchants
Bitcoin has become more acceptable as a payment option for goods and services and the number of merchants that accept Bitcoin has grown significantly in the past few years. With more than 100,000 merchants already accepting the cryptocurrency, more users are now using it as a legitimate alternative to traditional currency. Bitcoin is attractive for merchants because they pay fees of 0% to less than 2% for Bitcoin transactions as opposed to between 2-3% for credit card transactions. Merchants that accept Bitcoin typically use a bitcoin payment service provider, such as BitPay or Coinbase, which accepts Bitcoin from the customer on behalf of the merchant, converts it to the local currency and sends the required amount (minus a fee) to the merchant’s bank account.
Investors
There are many people who use Bitcoin as an investment opportunity and there are plenty of people who invested heavily in Bitcoin in its early days and are now millionaires. At the beginning of 2013, the price of Bitcoin was just a few dollars, while in November it had jumped to $1,100. In 2017, the price peaked at $4,200; however, it is very volatile. In May, the price dropped by $400 in one day and with all these ups and downs, it has left people out of pocket.
The uses of Bitcoin are growing as more merchants accept them and as the general trend in their price is going up. However, they are still volatile and so the number of people who use Bitcoin are still limited. This is changing with time and governments are now considering how to approach the issue of regulation, which is likely to increase its popularity further.
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