In the recent times, cryptocurrency has developed more as an investment option rather than a medium that common people can use to make routine payments like at a restaurant. This is because common people are still mystified by it. Thus, we see investors accepting Bitcoin as an asset class and cryptocurrency companies adapting traditional financial products to the cryptocurrency market, but there is no movement towards increasing its circulation among the common people. The following are some of the benefits of cryptocurrency.
Cryptocurrency transactions require a private key and a public key. Though the public key is visible to other users, it is practically useless as a private key also needs to be entered to access a user’s digital wallet. Thus, it is impossible to trace a transaction to the user. A new Bitcoin address is created for each transaction.
Bitcoin transactions are P2P; thus, there are no intermediaries like banks, credit card companies, etc. This is especially useful for international transactions as fiat currency has to be converted to that of the country to which one if traveling. The user has to pay conversion cost, transaction cost, etc. and the process takes 2–3 days. With Bitcoin, the user can convert his fiat currency to Bitcoin, go to the other country and convert the Bitcoin into the fiat of the other country. The conversion is instant, and the transaction fees are minimal.
Bitcoin adoption is increasing among businesses around the world including bitcoin casino; if shops and business establishments begin accepting Bitcoin, they don’t need to change Bitcoin to fiat. Users will be able to make payments in Bitcoin across the world.
Due to the anonymity of Bitcoin transactions, it is impossible for government agencies to tax them. There is no purchase history, no history of travels to foreign countries, expensive things bought, which the tax authorities can access to find out a user’s actual income. As banks and other intermediaries are cut off from Bitcoin transactions, they have no record of how many Bitcoin a user has or how he has spent or invested them.
Conversely, banks themselves have shunned cryptocurrencies till now and hence not integrated crypto with their systems. Thus, tax authorities cannot snoop on customer’s Bitcoin transactions through the banking system.
Lower transaction fees
As there is no involvement of banks and credit card companies, the cost of Bitcoin transactions is very low. Thus, the users get more value for their money with Bitcoin. This low cost is very useful for foreign travelers who have to pay multiple fees for using fiat currency. This is also helpful when the user has to make multiple payments. Credit card charges make it prohibitive to pay for multiple small transactions but with cryptocurrency, it is possible due to the low transaction costs. Thus, Bitcoin can be used to make multiple purchases at the local market, visit landmarks and for dining out without worrying about the cost of the transactions.
As there are no intermediaries, the speed of cryptocurrency transactions is also high with Bitcoin taking ten minutes to validate a transaction and other cryptocurrencies taking even less. This high speed is very useful in businesses that make multiple payments throughout the day.
Thus, Bitcoin is the best way of making secure, fast, low-cost transactions. The only thing missing is its widespread acceptance among small businesses. As more people begin using cryptocurrency, businesses across the world will have to allow Bitcoin as a payment method. This has already begun with several tourist destinations allowing payments in Bitcoin. Some are even creating local ecosystems within which a common cryptocurrency is accepted.