This cryptocurrency was first created in 2009 and was designed to be a universal payment system that provided secure, automated transactions. By removing a central controlling entity and replacing it with a decentralized network, its creator, the so far un-identified ´Satoshi Nakamoto´ laid the groundwork for a new monetary system.
Since its launch, Bitcoin has grown into something more than a currency. In 2017, investors saw it as an easy way to make money as its value rocketed from $1,000 to over $19,000. In 2018 it saw a sharp fall, halving its value in US dollar terms.
So – what can it do for expats?
According to Bitcoins.net, users can now spend their bitcoins on “games, beer, coffee” and – more interesting for us – “holidays and airline tickets.”
What’s significant is the fact Bitcoin isn’t bound by international borders. Unlike the US Dollar, Bitcoins can be spent in any country by anybody. In practice, this leading cryptocurrency isn’t usable everywhere because it’s still new and a limited (but growing) amount of businesses accept it.
The good news is that there are few restrictions on how or where bitcoin can be spent; and a certain amount of anonymity when you spend them. For expats, this could be a powerful tool. Not having to worry about converting currencies or cross-border transaction fees can make life easier.
In the future, you may be able to use cryptocurrencies for many online purchases. If this happens, Bitcoin or a similar cryptocurrency may become a standard payment method for many.
Useful in a crisis?
There are some cases where buying bitcoins may be a useful tool if you don’t want to transfer money ‘home’ and you are working in a country:
- with an unstable currency
- where you think there are growing political risks which may affect the value of the local currency
- which you think may be in a local banking crisis and has your funds frozen or capital controls imposed
One of the largest challenges is that Bitcoin has not proven a very stable store of wealth over the last months. The wide fluctuations in its value can mean you cannot be very sure what it will be worth next week. This may settle down, but the current economic conditions point to increased volatility in a general market sense; this will also probably affect Bitcoin. There is another risk to bear in mind, some countries have or are introducing legislation to control, tax or prohibit the use of cryptocurrencies.