Why Use Bitcoin?
There are numerous advantages to using bitcoin over traditional fiat currency. Here is a quick primer as to the benefits of using bitcoin to transact for goods and services.
Cost and time of transaction
One of the most widely cited benefits of dealing in bitcoins is the cost associated with doing so. Generally, the standard fee for bitcoin transfer is 0.0005 BTC. At current exchange rates, this amounts to about $0.2. The average fees associated with a wire transfer globally or a little over $40 (with the sender paying approximately $26 and the receiver paying approximately $15). Similarly, credit cards will generally charge a minimum of 3 to 5% of the balance transfer amount, which will always amount to being more expensive than the bitcoin transfer.
In addition, if you want to send money via wire transfer to an international receiver it will generally take anywhere between a couple of days and one week. Credit card payments can take anywhere up to 3 days to clear. Bitcoin transactions, on the other hand, will generally take about 10 minutes to receive confirmation.
If you’ve, sold anything on auction sites like eBay in the past, he will probably be familiar with the concept of chargebacks. A chargeback is when the buyer of a good or service instructs his bank or credit card provider to recall the payments they sent to the seller. Obviously, this has its benefits, as it can help prevent seller fraud. But it has its downfalls as well as it is a simple method of buyers scamming sellers out of the payments they were supposed to receive. If you’ve transact in bitcoin when selling goods on the Internet, you will not be susceptible to this type of fraud as bitcoin transactions are irreversible. This is not mean that a buyer is unable to receive a refund – it simply means that both parties must agree to reverse the transaction and it is not made automatically at the request of a financial institution that has little or no knowledge of the details of the initial transaction.
You own and maintain your own account
As things stand, you are required to trust retail banks or building societies to hold your cash on your behalf. As numerous financial crises have revealed, the trust we hold in these institutions is often far from wanted. With bitcoin, you can hold your money in an online or off-line bitcoin wallet (something that we will cover in another educational article) and manage it as you wish. There are no interest charges or overdraft payments, and no government or company can dip into your bitcoin wallet.
You can transact anonymously
Currently, if you want to buy something online you have to release a plethora of personal information to do so. Address details, date of birth, full name, email address and credit or debit card details are just some of the minimum requirements for online transactions, and divulgence of this information can lead to things like credit card fraud or identity theft. When you transact in bitcoin, all you need reveal is your public bitcoin wallet address. This is a long stream of numbers and digits from which it is impossible to determine your identity. Obviously, this has led to small numbers of individuals using bitcoin to undertake criminal transactions, and this has generated a lot of media attention, but as things stand the vast majority of bitcoin transactions are perfectly legal. So there you have it. Just some of the benefits of using bitcoin to transact on and off-line. Where can you store your bitcoin? Find out here…