6 advantages of using bitcoin as payment
Thanks to its digital and decentralized nature, payments using Bitcoin can give you more control, fewer fees, and a variety of other pros in daily transactions.
In the past decade, cryptocurrencies have gained a lot of traction, but there is still a lot that most people do not understand about them.
Cryptocurrency began when a paper entitled Bitcoin – A Peer to Peer Electronic Cash System was posted to a mailing list in 2008.
In 2021, many cryptocurrencies have joined the market, but Bitcoin remains at the top.
Understanding Bitcoin Basics
Many of the terms used in discussing Bitcoin may be confusing to those who are new to the subject, but it is essential to understand them to make informed decisions, especially for those who want to get into Bitcoin trading or investment.
Blockchain is a distributed digital record of transactions. A block contains information about the transaction and details like date, time, buyer, and seller. These blocks are “chained” together, resulting in a digital chain of blocks, i.e., a blockchain.
Cryptocurrency is the term used for digital currencies that use blockchain technology. Unlike fiat currency like dollars, euros, or yen distributed and controlled by banks, cryptocurrencies are not governed by any single organization.
It is based on the concept of cryptography, a branch of mathematics that allows the creation of mathematical proofs to provide a very high level of security.
Bitcoin is a cryptocurrency that you can buy, sell, and exchange, much like non-digital currency. Its distinction is that no single organization like a bank controls it.
Bitcoin’s creator Satoshi Nakamoto described it as “a system for electronic transactions without relying on trust.”
Bitcoin is often abbreviated as BTC. Among all cryptocurrencies today, Bitcoin is the oldest and most popular. As of October 2021, the value of one Bitcoin is at $66,974.00.
When you own Bitcoins, they are stored in a bitcoin wallet. The concept is basically the same as a physical wallet, except that, in this case, it holds cryptocurrencies.
When users make a financial transaction, they are issued both a private key and a public key consisting of a long string of characters that keep their Bitcoins safe.
Using Bitcoin as Payment
Using Bitcoin in your day-to-day transactions can provide many advantages thanks to its digital and decentralized nature.
You have entire control of your Bitcoin
Bitcoin has been described as a democratizing force because it takes power away from central banks and Wall Street—the so-called 1%—and distributes this power among all cryptocurrency users.
When you deposit money in a bank account and wish to make a payment, you trust that the bank performs this transaction.
When paying through Bitcoin, there is no intermediary, and the exchange is entirely between you and the entity you are sending it to. There are also no approvals or authorizations to go through.
Your transactions are pseudonymous
Transactions through Bitcoin are not attached to your personal identity. They can only be identified by a blockchain address, of which you can have several.
This system also prevents retailers from storing your data, as your address is not attached to your personal information.
There have been cases of network breaches and privacy issues regarding businesses that store their customers’ data, like Yahoo and First American.
During these breaches, millions of user data, including email addresses, Social Security digits, and transaction details, were exposed to hackers.
With Bitcoin, all they would see is a Bitcoin address that is not attached to any user’s personal information.
Your transactions are secure
Unlike fiat currency, Bitcoin does not have a physical manifestation, making it more difficult to steal.
In addition, cryptocurrency based on a blockchain is challenging to hack due to its high network security wherein the entire network of users is constantly reviewing it. Therefore, attacks on Bitcoin itself are improbable.
However, during online exchanges, you are trading crypto on websites or apps that can expose you to hackers.
Hacking these exchanges is still very hard due to the transparency that Bitcoin provides through its blockchain.
Furthermore, Bitcoin exchanges cannot be revoked like transactions done using other currencies. Once it has been confirmed, it is then final.
You will encounter fewer fees and faster transactions
Unlike banks that charge varying fees for transactions, deposits, and other costs, transacting with Bitcoin involves fewer fees.
Since it is a digital currency, it can be received in minutes. Some banks take 24 hours or more before a transaction can be completed, but this is not an issue with Bitcoin, even if you are sending money overseas.
You can have several accounts
You can have many account numbers or addresses to divide your Bitcoin balance. This could be helpful if you want to limit your spending or categorize your expenses easily.
Unlike bank accounts, in which there are requirements to creating several accounts, it is easy to divide your Bitcoin among several accounts.
You can take your Bitcoins wherever you go
Your Bitcoin wallet can be accessed wherever you are, whether through your mobile phone or computer.
This makes it easier to take with you as compared to carrying physical cash or a credit card. The only requirements to using Bitcoin are to be connected to the Internet and an address on Bitcoin’s blockchain.
Adjusting to Bitcoin
More and more businesses are embracing cryptocurrency. For example, technology-based companies like Twitch, Amazon, and Microsoft now accept Bitcoin payments for their services.
Similarly, certain branches of AXA Insurance, Pavilion Hotels & Resorts, and PayPal welcome Bitcoin transactions.
Just like how we secure our keys when we leave the house, we should follow safety measures in the digital world, as well. As with all currency, it is important to be careful to avoid fraudulent purchases or theft.
To avoid being scammed or misled, learn about Bitcoin and become knowledgeable of its processes.
Secure your crypto wallet and the platform you exchange and store your information in. Make sure not to misplace or forget your key, as it is very difficult to retrieve your coins without it.
Monitor your transactions and regularly check if anything looks out of place. Ensure the legitimacy of any platforms that process payments using Bitcoin.
Exploring Bitcoin as a currency to use in your everyday life is advantageous in many ways.
Not only are you investing in a well-known cryptocurrency, but you also benefit from the secure peer-to-peer decentralized platform that comes with the Bitcoin system.