and still receives funds in local currency.
Bitcoin is still some way from being a mainstream payment method; retailers need to be convinced to accept bitcoin. We think the time has come to start convincing the everyday consumer to leave the cash and cards at home and pay with bitcoin using their mobile device. That will not happen overnight, so until then, bitcoin users must be patient (while reveling in the thought that they’re ahead of the game).
Bitcoin and retailers
As a forward-thinking retailer, you should be ready and prepared to accept bitcoin payments for your online or brick-and-mortar shop. Accepting bitcoin payments doesn’t require you to deploy additional hardware, as it peacefully coexists next to your existing payment infrastructure. You do need an Internet connection however, but most retailers already have that.
✔ Accepting bitcoin payments is subject to very low transaction fees – a welcome change from the 3 to 5 percent per transaction you lose when accepting any type of card transaction.
✔ Bitcoin payments can be converted to a local currency of your choice, and funds are deposited to your bank account the very next business day. If you’re using a good payment processor, they will charge you only a small margin to convert the bitcoin to your local currency. Compare that to card transactions, where you have to wait up to a week or so before you receive the money – minus the 3 to 5 percent transaction fee plus an additional fee for any currency conversions – and bitcoin is the clear winner across the board.
✔ Bitcoin is a global currency. It works the same in every country around the world. Everywhere you go, the bitcoin symbol is the same.
✔ Bitcoin value is calculated to the eighth digit after the decimal point (the hundred millionth), unlike cash, which is only broken down to hundredths, or cents. For example, trading in U.S. dollars allows you to charge $11.99. Bitcoin would allow a charge of 11.98765432 BTC. Although this may not seem to be of significance now, should the value of BTC exponentially increase in the coming years, those additional decimal places will be very useful for accurate pricing in the future.
✔ Accepting bitcoin payments lets you expand your potential customer base on a global scale, as there is no need to offer a plethora of local currencies when offering bitcoin will suffice.
✔ Bitcoin-to-bitcoin means it keeps its value during the transaction and it is later on converted to a currency of your choice.
Bitcoin and consumers
As a consumer, the advantages of using bitcoin are pretty straightforward. First of all, you no longer need to use cash to pay for goods or services at a bricks-and-mortar location. Cash is clunky to use, and it fills up your wallet with banknotes and your pockets with coins so quickly that you just want to spend it faster to get rid of it (or is that just me?). Plus, the ever-present – if slight – chance exists that you may be carrying counterfeit money without even knowing it. Should you ever be in that situation while trying to pay for something, you will not be having a fun afternoon, we can tell you that much.
✔ Rather than relying on the services provided by a centralized service such as a bank, bitcoin lets you make any payment to anyone at any time, regardless of business hours, weekends, and holidays.
✔ When you make an online payment, it is processed immediately.
✔ Bitcoin is a borderless digital currency, operating in the same manner in Europe as it does in North America, Africa, Asia, Latin America, and Australia. Anyone in the world can use bitcoin to pay for anything else in the world, albeit you might have to jump through some hoops in order to get there.
✔ Many efforts are underway to push bitcoin’s acceptance by merchants, combined with new and improving alternative ways to spend bitcoin conveniently (such as the previously mentioned debit cards).
Bitcoin is changing the way people think about money by planting a seed of doubt in people’s minds – in a positive and thought-provoking way. Mind you, given the financial crises over the past decade, it’s understandable that some people are trying to come up with new and creative solutions for a better economy. Bitcoin, with its transparency and decentralization, may prove to be a powerful tool in achieving that goal.
One thing bitcoin does is bypass the current financial system and could therefore potentially provide services to unbanked and underbanked nations all around the world. Whereas most people in the Western world find it normal to have a bank account, the story is quite different elsewhere. Some countries in Africa, for example, have an unbanked population of anywhere from 50 to 90 percent. Do these people have less right to open and own a bank account than Americans or Europeans do? Absolutely not, but doing so may come with rules so strict as to be unobtainable for many citizens.
For a while now, society has been evolving toward a cashless ecosystem: More and more people use bank and credit cards to pay for goods and services both online and offline, for example. Mobile payments – paying for stuff with your phone – are now on the rise, which may become a threat to card transactions. Bitcoin has been available on mobile device for years now.
Here are some examples of what bitcoin technology is capable of (see Chapter 3 for more on these):
✔ Taking on the remittance market (transfers of funds between two parties) and coming out on top in every aspect.
✔ Sending money from one end of the world to the other end in only a few seconds.
✔ Converting money to any local currency you desire.
✔ Overriding the need for a bank account, making bitcoin an incredibly powerful tool in unbanked and underbanked regions of the world.
What if you live in an unbanked region and have no reliable access to the Internet? There’s a solution for that as well: Some services allow you to send text messages to any mobile phone number in the world in exchange for bitcoin or a few other digital currencies. Once again, bitcoin proves itself a very powerful tool in underbanked and unbanked regions of the world.
Perhaps the most impressive showcasing of what bitcoin can do is the bitcoin network itself. All transactions are logged and monitored in real time, giving users unprecedented access to financial data from all corners of the world. Furthermore, the blockchain lets you track payments’ origins and destinations, even as money is on the move in real time. Such valuable insight will hopefully be adopted in the current financial infrastructure, even though there may be a period of adjustment while that takes place.
One of the biggest misconceptions surrounding bitcoin is whether or not digital currency is truly anonymous. The simple answer to that question is “no, not entirely.” But a certain level of anonymity is tied to using bitcoin and digital currency in general.
