Bitcoin was the first digital currency, introduced in 2008 by an unknown author who used the pseudonym Satoshi Nakamoto. Also known as a cryptocurrency, Bitcoin is a peer-to-peer system of exchange that relies on computers, rather than banks, to verify users’ transactions. The technology behind the system is known as the blockchain, which is a continuously up-dated database that exists simultaneously on multiple computers.
While many other cryptocurrencies have followed in its footsteps, Bitcoin is still the leader of the pack, accepted by the largest number of merchants around the world. If you’re interested in using Bitcoin but haven’t yet taken the plunge, consider the following benefits of paying and accepting money with Bitcoin.
With Bitcoin, You Can Send And Receive Money Any Time And Anywhere
One of the biggest benefits of Bitcoin is that it allows you to send money to or receive money from people or businesses in other countries without having to worry about exchange rates, holidays, or any restrictions placed by either government on exchanges between the two countries.
For example, if the U.S. places sanctions on another country, it may be impossible to send money to that country through normal channels. However, no government has the power to restrict Bitcoin transactions. In addition, if you’re a small business owner, using Bitcoin can make it easier and cheaper to do business with customers overseas.
You Don’t Need Special Software
Another advantage of using Bitcoin is that you don’t have to rely on a website or proprietary software to make a purchase. You (and your transaction partner) only need a Bitcoin wallet, which is a unique and anonymous digital address for sending or receiving bitcoins, and an internet connection.
There are many different forms a wallet can take, and you can choose your preference based on the level of convenience and security you need. For example, you can print a paper wallet with a scannable QR code, or you can use a mobile wallet, a desktop wallet, or a hardware wallet. A mobile wallet offers the greatest convenience, while paper and hardware wallets provide the most security as they are impossible to hack.
Transactions Are Completely Anonymous
The address of a Bitcoin wallet is not automatically associated with a name, address, social security number, phone number, or any other personal information. In addition, the address changes with each transaction, so there is no way to associate a pattern of use with an individual. Thus, transactions are both public, in the sense that they become part of the public blockchain that anyone can see, and private because no names are attached to the data.
When you use a credit card, you’re always at risk of identity theft if the merchant you’re paying gets hacked, but identity theft and other privacy concerns are a very low risk for Bitcoin users. Since there is no limit to the number of individual wallets a Bitcoin user can have, you can increase your privacy by using multiple wallets, which makes funds much more difficult to track in the blockchain.
Anyone Can Use Bitcoin
Thanks to the benefit of anonymity, anyone can use Bitcoin. There is no application process, and no need to obtain approval from any authority. Thus, anyone is free to purchase and spend Bitcoin regardless of age, location, citizenship, or income level.
It is estimated that there are two and a half billion people in the world who have no access to banks. Bitcoin can provide critical financial services to these individuals by allowing them to store funds in digital wallets and send and receive money through mobile apps.
Bitcoin Is Free From Government And Corporate Control
The way Bitcoin is structured, there is no central authority in control. No owner or CEO or governmental official has any say over how Bitcoin is used or who can use it. A government or law enforcement body may have the power to freeze credit or assets in a bank, but Bitcoin is free from this type of interference.
Furthermore, while governments can exert influence over fiat currency by controlling the supply, Bitcoin is immune to this type of manipulation. The amount of Bitcoin in circulation is determined only by the behavior of miners, who discover and release new bitcoins, and Bitcoin owners (who may choose to save their bitcoins or put them in circulation).
Finally, governments are able to track money held in bank and investment accounts in order to collect taxes on it. But it is much more difficult for governments to collect taxes on Bitcoin transactions.
The Fees For Using Bitcoin Are Low
Another benefit of using Bitcoin is that transaction fees are as low as you want them to be. Transaction fees, which are entirely market driven, are paid to the Bitcoin miners who contribute their computer power to the blockchain system. The higher the fee, the more quickly the transaction will get processed. Fees fluctuate, so it’s helpful to check the going rates when planning a time-sensitive transaction, but fees tend to be a small percentage of the amount of Bitcoin involved.
Sellers who accept Bitcoin also pay relatively low fees. Typically, a merchant will use a digital exchange to convert bitcoins to dollars or other currency, but the fees charged per transaction are less than the fees charged by most credit card companies.
Merchants Are Protected From Fraud
Merchants are often motivated to accept Bitcoin as a payment method because transactions are irreversible. One common type of fraud occurs when a customer charges a purchase to a credit card and then reverses the charges without returning the goods, in effect stealing from the seller.
Sellers who accept credit cards (and almost all of them do) inevitably lose money to chargebacks, which can make Bitcoin a very attractive payment option. In addition, accepting Bitcoin can make it possible for business owners to expand into areas where fraud occurs frequently or where customers are less likely to have credit cards.
Sellers Get Paid Quickly
Another advantage to the seller is the speed of Bitcoin transactions. When a buyer pays using Bitcoin, the payment is typically verified within just ten minutes, and the seller receives the funds in fiat currency (e.g., dollars) within a day.
Mobile Payments Are Easy With Bitcoin
Using a mobile Bitcoin wallet is one of the most convenient payment methods available. If you have the wallet installed on your phone, you can simply show the QR code to the cashier, who will scan it just like any barcode on a product to charge your account. Using a wallet is very simple because you don’t have to register or connect the wallet to any existing account.
However, you should be aware that mobile wallets are the most vulnerable to hacking, and while it isn’t particularly likely that your wallet will get hacked, you do trade some security for convenience with this method.
Bitcoins Increase In Value
Unlike other currencies, there is a finite supply of bitcoins, which are generated by miners who use their computers solve complex cryptographic problems to verify Bitcoin transactions. Only a certain number (21 million) of bitcoins can ever be mined, and when they are all in existence, their number will gradually decline due to lost wallets.
This scarcity in supply is likely to lead to an increase in value. In fact, some people have already begun stockpiling Bitcoin in hopes of getting a big return on their investment in the future. While the price of Bitcoin has fluctuated significantly over the years, it is currently holding steady and promises a gradual increase.
Bitcoin Is Widely Accepted
As mentioned above, merchants all over the world now accept Bitcoin as a method of payment, both online and in stores, and their number is growing every day. Some of the major retailers that accept Bitcoin include Overstock.com, Reeds Jewelers, Whole Foods, Crate and Barrel, and Nordstrom. Even Amazon.com has plans to start accepting Bitcoin payments through payment processor Moon’s lightning network.
As Bitcoin grows in popularity and availability, the advantages of using it with major retailers increase as well. If you choose to pay with Bitcoin, you can count on fast, simple, cheap transactions that will never put your privacy at risk, even if the retailer gets hacked.
Bitcoin Is Easy To Exchange For Fiat Currency
Compared with other cryptocurrencies, Bitcoin is the most liquid by far, due to the fact that it is the most frequently exchanged. What this means is that not only is it easy to exchange bitcoins for U.S. dollars, but when you do, you can expect your bitcoins to retain all or most of their value.
Final Thoughts
When Bitcoin was first introduced, many people expected it to fail, but history is proving them wrong. Bitcoin is becoming increasingly well known among the general public, and it’s getting more and more users as people become aware of its unique advantages. If you’re interested in getting started with Bitcoin, you can learn more from xCoins Bitcoin purchasing services.