Bitcoin Use Cases: From Remittances to Speculation

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Crypto supporters often claim that Bitcoin and other digital currencies are becoming mainstream. There are plenty of reasons for them to promote this idea about cryptocurrencies because the main way to make a profit from cryptocurrencies is to sell them for higher prices than purchased.

Therefore, these discussions are often meant to build the fear of missing out, which is often a factor motivating beginner investors to add cryptocurrencies to their portfolios.

Whatever the reasons people purchase Bitcoin and other digital currencies, the fact is that over 10% of the population holds digital currencies in their portfolios, and more and more are interested in accessing this sector.

Bitcoin was the first digital currency developed, and its purpose is to facilitate digital payments. However, over the years, its price has grown so much that it has become challenging for regular users to purchase it, so its utility has evolved.

Bitcoin can be used as censorship-resistant money

Censorship has been widely discussed over the last few years, and its relevancy has increased significantly. Social media platforms have been used to fight censorship, and Twitter even took it a step further to remove a sitting president of the United States from the platform.

Besides opinions, money has also been subjected to censorship. For example, the Canadian government restricted people’s access to money after participating in the Canadian trucker protest in 2022, when the authorities required drivers to get a vaccine if they wanted to enter the country.

In this context, people understood that Bitcoin and other currencies could prove a solution to fighting censorship because no one can control it. Everyone can access cryptocurrencies regardless of political affiliation, location, or activity. This is the main reason people donated to the Canadian truckers cause cryptocurrencies. No one could interfere with the donations.

Bitcoin and other blockchain-based currencies can be used as tools to fight censorship.

Bitcoin is a digital store of value

One of the most prominent utilities of Bitcoin today is as a digital store of value, often referred to as "digital gold." Like gold, many have perceived Bitcoin as a hedge against inflation and economic instability. Bitcoin’s limited supply has reinforced this utility—there will only ever be 21 million bitcoins, making it a deflationary asset.

Bitcoin’s decentralised network and scarcity hedge against inflationary monetary policies used by governments, particularly during economic crises. For instance, when central banks increase the money supply through quantitative easing, it can erode the value of fiat currencies. Bitcoin, on the other hand, is immune to such interventions, which has driven significant interest from investors looking for an alternative store o

Moreover, with increased institutional investment, Bitcoin is gaining legitimacy as a long-term asset. Financial institutions, hedge funds, and public companies have started including Bitcoin in their portfolios, viewing it as a safe harbour during uncertain economic times.

Bitcoins is a medium of exchange

While Bitcoin’s volatility can limit its day-to-day usage as a currency, it was initially designed as a medium of exchange. Bitcoin enables borderless, peer-to-peer transactions without the need for a trusted intermediary like a bank or payment processor. This makes Bitcoin particularly useful in regions with underdeveloped financial systems or where access to traditional banking
services is limited.

For example, in countries experiencing hyperinflation or currency devaluation, like Venezuela or Zimbabwe, Bitcoin has provided citizens with a more stable alternative for transferring value.

Bitcoin's decentralised nature ensures that no single entity can control the network or manipulate the currency, offering an alternative to government-issued fiat currencies.

Moreover, Bitcoin transactions can be cheaper and faster, especially when dealing with international transfers. Traditional cross-border payments often involve high fees, multiple intermediaries, and days of processing time. Bitcoin transactions, however, can be processed within minutes, regardless of geographical location, and at a fraction of the cost of traditional systems.

Bitcoin can be used for remittances

Bitcoin offers significant benefits for remittances, especially for people sending money across borders. Remittances are a critical source of income for many families in developing countries, and traditional remittance services often charge exorbitant fees and take several days to process transactions.

By contrast, Bitcoin allows for quick, low-cost transfers without intermediaries.

For example, a migrant worker in the United States can send Bitcoin to family members in Mexico, where it can be converted to local currency or used directly if merchants accept Bitcoin. Since the remittance market is worth hundreds of billions of dollars annually,

Bitcoin can potentially revolutionise this space, particularly as more user-friendly services and wallets become available.
Bitcoin powers Decentralized Finance (DeFi). Bitcoin has played a foundational role in the rise of decentralised finance (DeFi), which seeks to recreate traditional financial instruments using blockchain technology.

While Ethereum has been the primary platform for DeFi projects, Bitcoin can be used with Ethereum-based protocols via Wrapped Bitcoin (WBTC). This token represents Bitcoin on the Ethereum network.

DeFi allows users to borrow, lend, trade, and invest decentralised without relying on centralised financial institutions like banks or brokerages. This opens up new possibilities for Bitcoin holders, who can leverage their holdings in decentralised applications to earn interest, take out loans, or participate in decentralised exchanges (DEXs).

Bitcoin is a payment rail for E-commerce and business

Bitcoin has utility as a payment rail for businesses and e-commerce platforms looking for an alternative to traditional payment processors. Payment processing services such as Visa, Mastercard, or PayPal charge merchants a fee for each transaction, which can be prohibitive for smaller businesses. Bitcoin, by contrast, allows businesses to accept payments without intermediary fees, which can be particularly beneficial for high-value transactions.

Several major companies, including Microsoft, Overstock, and Tesla (at least temporarily), have already started accepting Bitcoin as a form of payment. Although the number of merchants accepting Bitcoin remains relatively small compared to fiat-based payment methods, the trend is growing as cryptocurrency becomes more mainstream.

Furthermore, the ability to conduct business globally without worrying about exchange rates or cross-border payment fees makes Bitcoin an attractive option for international companies.

Bitcoin’s irreversible transactions also reduce the risk of chargebacks, which can be costly for merchants.

Bitcoin can be used for investment and speculation

Finally, Bitcoin has gained significant utility as an investment and speculative asset.

Many investors view Bitcoin as a high-risk, high-reward asset that offers potentially massive returns, albeit with considerable volatility. Since its inception, Bitcoin's price has seen dramatic rises and falls, drawing the attention of traders and speculators looking to profit from short-term price movements.

Bitcoin has also become a mainstream investment vehicle, with financial products like Bitcoin futures, exchange-traded funds (ETFs), and institutional investment funds offering exposure to the cryptocurrency. The rise of these financial products indicates that Bitcoin is maturing as an asset class, appealing to both retail and institutional investors.