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Bitcoin as a form of payment

5 min read


Bitcoin as a form of payment

Recently, the popularity of cryptocurrencies has spiked. The dire need for fast, low cost and genuine modern transactions propelled businesses and investors to embrace cryptocurrency as a mode of payment. Bitcoin is the most popular and widely used form of cryptocurrency. Other forms of cryptocurrencies include Litecoin, Ethereum, and Ripple, which also secure a seat in the global payment tables of cryptos.

Bitcoins

Satoshi Nakamoto, a mysterious entity, brought up Bitcoin in 2019. The cryptocurrency system allows transactions amongst its users through a digital unit of exchange called Bitcoins; peer to peer. Bitcoin offered an alternative to the traditional form of government currencies such as the euro. Bitcoin sets the pace for other cryptocurrencies as its coins are held in digital wallets. Bitcoins transactions are irreversible and are collected in blocks that are validated by a community of bitcoin users.

Advantages of bitcoins for International payments

1. User anonymity
Primarily, one of the main reasons why bitcoins are embraced as a form of cryptocurrency is anonymity. Cryptocurrency users have control of their money without the intervention of a bank or the government. Intensified personal protections ensure that individuals or groups involved in transactions remain anonymous. The only way to identify users is through public keys or codes. Users can swap and trade bitcoins of identical value privately without knowing the source of the owner’s holdings.

2. Bitcoin Exchanges
Users can exchange Bitcoins for other traditional currencies such as the standard US dollar and Euro at a fluctuating exchange rate. The exchange also applies to other less popular currencies that cannot be exchanged with other currencies. This aims to ensure that the market remains liquid and users can profit when trading under the right conditions when exchange rates fluctuate. Bitcoin’s values swing from time to time, something not familiar to the traditional currency.

3. No risks of inflation
Inflation is solely blamed on the government when it produces more money leading to a decrease in its purchasing power. The bitcoin system was created in a finite number of bitcoin estimated to be 21 million. This ensures there’s almost zero chance of inflation. This ensures that both the buyer and seller benefit in general.

4. Low transaction fees
Every digital payment method, there’s always a transaction fee that pickles you where it hurts most. Bitcoins’ transaction fees are generally lower and costs not more than 1% of their value.

Disadvantages of using bitcoins for international payments

1. Susceptible to scams
Due to its popularity around the world, it has attracted scams and fraudulent attacks. They come in different ways, including Bitcoin savings and other security breaches. Law enforcement is likely to prosecute the associated attacks, but since Bitcoin is digital and discrete, it makes the whole process harder.

2. Image damage for users
Black market trades are usually sites for criminals and terrorists affiliated with purchasing illegal items. Bitcoin providing the privacy user needs attracts criminals and affiliated participants. Users can’t trust other users, which sometimes affects transactions as there is no benefit of the doubt.

3. No refund policy
This can be an advantage and, at the same time, the biggest drawback for Bitcoin. Bitcoin lacks a policy for refunds like we are used to other card companies. Users can purchase goods, make payments, and still, the seller does not deliver the goods. Miners act as intermediaries between two users, and they too can’t verify the legitimacy of the transactions. The no refund policy means one is susceptible to scam sellers.

Conclusion

There are issues regarding cryptocurrencies as they are an excellent avenue for conducting illegal trades. On the positive side, the list of merchants enrolling in bitcoin is lengthening. One can get plane tickets, purchase furniture, and even access web publishing services. However, you need first to understand what cryptocurrencies entail, the mode of transactions, and how to overcome scams before venturing into them. Invest cautiously in cryptocurrency to avoid losses.