Why Use Bitcoin

You now have an understanding of the basic principles of Bitcoin. Let’s look at the benefits of Bitcoin over other money and why you might want to use it. In almost every situation where electronic transactions are possible, Bitcoin is more advantageous than regular currency.

It’s important to consider the pros and cons of each option before we look at these advantages. Alternatives are not just about comparing Bitcoin to the US dollar, Pound, or Euro. We also need to consider different types of transactions when we speak of alternatives. How we use money is influenced by the amount involved, the type and location of the buyers, as well as the goods or services purchased.

The simplest example is a cash transfer that involves coins or notes being exchanged. Cash transfers are best for amounts between USD 0.05 and USD 1000. Although it is possible to transfer larger amounts, most people prefer to use other payment options once the amount exceeds USD 1,000. We can only accept smaller amounts in the smallest currency denomination. Cash transfers can only be made if both parties are present at the same place.

A bank cheque is used for larger amounts between individuals. Bank cheques are generally around USD 5 so they are not economical for values lower than USD

500 500. Parties will also need to meet face-to-face or wait several days before sending a cheque.

EFT and credit card facilities for merchants are very convenient. Merchants must pay to set up merchant accounts with their bank and also pay a commission of several percent for processing the transaction. This can be quite expensive. The merchant may also be subject to what is known as a “chargeback”, where fraud was committed and the merchant is responsible in refunding the money.

Merchants who operate online businesses are particularly concerned about this. They may only be able to see the card’s details and not the credit card information. Credit card and EFT facilities can only be used for amounts between USD 10 to USD 10,000.

International SWIFT transfer is the most popular method to transact money between countries. Due to the high fees that banks charge, SWIFT transfers can be uneconomical for transactions below USD 1,000. SWIFT transfers can be slow and take several days to reach the recipient. They can also make mistakes and cause delays during the transfer process.

It is possible to see that the notion of a transaction depends on what you are trying to accomplish. There are many systems with different pros and cons that can be used depending on the situation.

There are a few advantages to using bitcoins that make it more valuable than conventional currencies:

No Bank Fees

Although it is standard for fiat currency exchanges not to charge “maker” or “taker” fees as well as withdrawal and deposit fees, Bitcoin users do not have to pay the traditional banking fees associated to fiat currencies. This includes no account maintenance fees or minimum balance fees. There are also no overdraft fees and no returned deposit fees.

Bitcoins Cannot be Stolen

Only the owner can change Bitcoins’ ownership address. Only the owner can change Bitcoins’ ownership address. This system is more difficult to steal than conventional currency systems that only require a few authentication details.

International Payments Low Transaction Fees

Foreign purchases and standard wire transfers usually involve exchange fees and fees. Bitcoin transactions are free from government intervention and intermediary institutions. This means that the transaction costs are typically lower than bank transfers. This is a huge advantage for travelers. Transferring bitcoins in bitcoins is quick and easy, without the need for authorization or waiting periods.

Bitcoin can be Digital and Decentralized

Bitcoin allows people to freely exchange value without intermediaries, which results in greater control over funds and lower fees. It is faster, more secure, and immutable. Bitcoin owners have bitcoin, while banks control cash.

No Tracking

Users must not make their wallet addresses public so that others can trace transactions to them. Only the wallet owners will know how many bitcoins they have. A new wallet address can easily be generated even if the wallet address is public. This is a significant improvement on traditional currency systems that allow third parties to access personal financial information.

Bitcoin Payments are Mobile

Bitcoin users can purchase their coins from any place they have internet access, just like other online payment systems. Buyers don’t have to go to a bank to purchase a product. Personal information is not required to complete transactions, but online payments with U.S. credit cards or bank accounts are possible.

A Great tool for Investing

You can use Bitcoin anywhere in the world, without having to convert. It is considered as equal to Gold. Bitcoin combines the best aspects of gold and cash while allowing for an open market without restrictions from banks or governments.

Return to Bitcoin Bitcoin lets me send money to any country in the world.

Instantaneously and completely free. Is there any other transaction method that has this scope?

Let’s move on. Bitcoin is a payment method that merchants can accept without fear of chargeback. In other words, once a merchant receives a Bitcoin payment, there’s no chance that a bank, third-party, or any other party may claim that the payment was fraudulent. Bitcoin payments are final. Merchants and consumers can still choose to use an escrow agent, if necessary.

Customers who make online purchases will also find this a huge benefit. You’d be familiar with the frustration of having your credit card declined if you have ever purchased something online using a credit card.

If you are purchasing equipment worth a few thousand dollars, the merchant might ask you to prove your address and identity. Both the merchant and customer may find this frustrating and inconvenient. This can lead to unwelcome delays in processing the transaction. The transaction with Bitcoin is instantaneous and free of risk.

These benefits are even greater if you deal with international customers frequently, like anyone working in the tourism sector. Think about a boat charter operator. The customer charters a boat one week before their vacation. Instead of having to pay a wire transfer fee and wait for the money to clear, the merchant and customer can make a Bitcoin deposit from anywhere in the world. The funds can be transferred instantly and freely in any currency they are comfortable with. It would not appear on credit card statements if the charter was a surprise engagement present to the fiancee.

Bitcoin transactions are also free from the requirement that either party divulges sensitive information to the other. This is a great benefit of Bitcoin. This is in direct contradiction to how EFT or credit cards work. You must give the details of your card and your signature to the store every time you make an in-store purchase using your EFT or credit card.

It is interesting to see how sensitive we are to hiding our PIN from others, but we are willing to enter it into machines owned by complete strangers. While PIN skimming devices may not be common in Australia, they are more prevalent in other countries and are of particular concern for international travelers.

This risk is completely eliminated by using Bitcoin. It is possible to make purchases anywhere in the world and pay money to anyone without worrying about your personal details being used fraudulently.

Bitcoin’s ability to pay small amounts is another area where it has an advantage over other payment methods. One example is that a child may be tempted to buy chocolates or lollies for ten cents, while a vendor might sell a ringtone on a mobile phone for fifty cents online.

These small purchases cannot be made without Bitcoin. Most other facilities, due to transaction fees, require a minimum purchase to be possible. Bitcoin allows for what is now called micropayments. This means that small amounts, such as these, can be made with Bitcoin. Or even less than a cent. Bitcoin is not a credit line, but it is the digital equivalent of cash. Therefore, you don’t have to be an adult to use Bitcoin.

Consider the situation of a traveler needing to send urgently 100 dollars to his homeland to support his mother. SWIFT transfers are expensive and can take many days. Although Western Union is faster, it would still be more costly. Bitcoin is instantaneous, and it’s free.

An anonymous transfer of Bitcoin can be made. This anonymity has its limitations, which we’ll examine in a later chapter. However, suffice it to say that Bitcoin transactions are anonymous and I don’t have to worry about the bank, credit card company, or payment processor keeping track of all my purchases. I don’t have to disclose my identity to the merchant. There are legitimate and valid reasons why I might prefer anonymity.

Another great advantage of Bitcoin is the controlled supply. Bitcoins are created through mining. The Bitcoin protocol controls the rate at which Bitcoin is generated. This will be discussed in greater detail later. However, we can confirm that the supply of Bitcoin is controlled and predictable. It cannot be altered by any government, individual, or organization.

There have been many instances in history where governments created more money to serve their economic interests. These interests often conflict with the interests of those who hold the currency. This can cause an inflationary spiral which can decimate an entire economy. This manipulation is not possible with Bitcoin because the protocol controls the supply and all users are aware of it in advance.

As we mentioned earlier, Bitcoin is similar to cash. However, cash has limited options for protection against theft and accidental loss. Although Bitcoin isn’t immune to such losses, it has many inherent properties that can help people protect their money from theft or loss. It is safer to keep Bitcoin in your back pocket than having cash around.

The electronic age was not designed for traditional currency. This system of money has been around for hundreds of years. It predates the invention of electricity. Since the days when people traded face-to-face with each other, it has been used to send songs between countries for a small fee.

even spoken. Financial institutions have adapted their systems to the electronic age over the past century and created new systems that meet the needs of today. These systems grew older and electronic commerce became more popular. New systems were created to replace them, performing tasks they weren’t originally intended for.

This results in a crumbling banking system that was not designed to handle the vast array of electronic transactions the world does today. It also relies heavily on financial institutions that profit from this dependence.

Bitcoin was created for electronic transactions right from the start. Instantaneous electronic transactions can be made anywhere in the world for any amount. There is no need to trust the other party or rely on any third party. It will be absurd that we are asking these questions now, once digital currencies have reached critical mass.