We live in the 21st century where everything is becoming digitized, the internet is providing solutions to our everyday problems. Businesses are going online, cryptocurrencies and blockchain technology are reshaping our financial institutions, and artificial intelligence is replacing manpower. People now prefer to buy bitcoin and use it for transactions ahead of fiat currencies like the Rand.
The advent of the likes of Bitcoin and other Altcoins has revolutionized our Fintech industries. We now have a different outlook on money and how it can serve us.
However, like every other technology, people questioned the importance and safety of bitcoin before embracing and adopting it. South Africans and other Africans are rushing to buy bitcoin because it is a form of investment and safe-haven currency.
This however brings us to this piece, which should you save – Bitcoin or Rand? Should you buy bitcoin and save it in your digital wallet or save your Rand in the bank? Discover 10 Bitcoin calculators to use in 2021.
Bitcoin vs Fiat
Before we dig deep into the subject matter, let’s briefly introduce the two concepts. Fiat money is any money that is approved and accepted by the government as a medium of exchange and payment of debt and taxes. Fiat currencies have no intrinsic value or use-cases that gold for example might have. Rand is a traditional currency used in South Africa, it is known as the South African Rand. It was introduced in February 1961 and has since been used as a medium of exchange and trade.
Bitcoin on the other hand is a digital and virtual currency that was introduced in 2009 by an individual or group called Satoshi Nakamoto. It was the first-ever successful digital currency after a series of attempts. Bitcoin was introduced initially as a means of exchange, but today it is now widely used as a store of value and also as an investment. It doesn’t require any financial institution, all you need to get bitcoin is a P2P exchange like Remitano.
What are the differences between Bitcoin and Rand?
- The first and the most basic difference between Bitcoin and Rand is that the latter is physical while the former is a digital currency. Bitcoin can’t be physically represented but Rand can be touched, felt, and seen.
- Another important difference between Bitcoin and Rand is that Bitcoin is decentralized while Rand is centralized. The implication of this is that for Rand the transaction you make is monitored and regulated by the government and law. Whereas for Bitcoin, you can buy Bitcoin and use it for transactions without you being monitored by the government or any third party.
- Bitcoin is created with a computer algorithm and the number of Bitcoin that can ever be created is limited while the number of rands that can be printed is not limited.
- The implication of the difference above is that since the number of Bitcoin that can be created is limited, it can be used as a deflationary currency. Unlike rand that loses value day by day, Bitcoin value increases against Rands.
- Bitcoin is still new with an unknown future, it is risky with high volatility whereas Rand is safe and old.
Which to save – Bitcoin or Rand?
Saving in South African Rand
It is safe, reliable, and old, less volatile which makes it less risky and easily accessible.
However, a problem with saving in South African Rand is inflation. The number of goods and services that can be gotten with let’s say 1000 rand last year and the number of goods that can be gotten now with the same money will amaze you. There is a huge difference, what you will get then is probably twice what you get now.
So, saving in rand might be risk-free, safer, and secure but it won’t save and maintain the exact value of your money, it also won’t yield a return on your investment rather your money keeps losing value over time as a result of inflation.
Saving in Bitcoin
Aside from the fact that Bitcoin is used for transactional purposes, it functions as a store of value, which means that you can save money and the value of your money is retained or increased over time. Bitcoin is a deflationary tool since it has a limited amount. What you can get with 1 BTC is now four times what you could get with the same amount last year. Hence, Bitcoin keeps increasing in value.
Let’s not forget the fact that Bitcoin is very much risky which is a result of its high volatility. It is still one of the investments that can give you a high return on your investment within a short period, all you need is just a wallet on either a P2P platform or an exchange. Your money isn’t monitored by the government, or any third party, and transactions aren’t regulated. However, if care is not taken you can lose all your savings, once you forget your wallet address, you lose all your money, and there’s also risk of losing your money to scams and fraud.
Should you buy Bitcoin?
Of course, you definitely should, if you have the money to spare.
Bitcoin is just like every other investment and the same rules apply. You should buy Bitcoin with the money you can afford to lose and watch your money grow. Not only that, you can also buy Bitcoin and use it to make purchases globally since the world is adopting it but also more merchants are beginning to accept digital currency payments. That means you don’t have to go through the stress of changing your currency to other currencies before making purchases.
And besides, it is not too late to buy Bitcoin for savings. It is just a few years from its inception with a lot of potential benefits still yet to be derived from it.
In conclusion, you can save your money in rand or in Bitcoin, whichever you chose and you are comfortable with, but if you want your money to work for you and you want to gain more financial buoyancy, save in Bitcoin. You can easily exchange your bitcoin for Rand on a P2P platform like Remitano exchange.