Bitcoins are digital coins, designed to be ‘self-contained’ for their value, with no need for banks to move and store the money. Bitcoin is one type of virtual currency (others include Litecoin) brought on through cryptography (the process of converting legible information into an almost uncrackable code).
This focus on bitcoins as a payment method is better seen in light of its benefits over traditional payment methods. Bitcoin transactions can be performed at any time, and incur very low processing fees (a flat fee of 0.0001 BTC per transaction), making them an attractive alternative to credit cards or PayPal for merchants selling products or services online. Bitcoin has proved especially popular amongst those working in the online gambling industry, where concerns over transaction and data security and the speed of transfers are all important. Bitcoin’s very low transaction fees can also mean cost savings for merchants who, unlike those with a standard PayPal account, are not charged extra for receiving Bitcoin transactions.For more information visit Brexit Millionaire.
One barrier to Bitcoin becoming more widely used as a payment method is its volatility. Bitcoin prices have fluctuated tremendously in the past few years, ranging anywhere from around $125 per coin up to about $1,200 per coin. This means that many businesses are reluctant to accept Bitcoin simply because they don’t know what their BTC balance will be worth when it comes time to convert it back into their local fiat currency (fiat meaning established by government decree).
The recent announcement of Exchange has generated excitement on behalf of Bitcoin enthusiasts all over the world. The new Bitcoin exchange, currently in private beta, offers a very fast and efficient clearing house for Bitcoin transactions as well as a Bitcoin wallet service. Exchange will not be charging fees to its users, but will instead make their money by providing liquidity on both sides of each transaction – buying and selling – which they will then charge a small fee to facilitate.
With this step towards legitimizing Bitcoin as a payment method it is worth taking another look at what Bitcoin can offer merchants who choose to adopt it as a form of tender. Here are some of the benefits:
- Â 0% transaction fees compared with 2 – 3% charged by credit cards or PayPal;
- Â No PCI compliance required (for Bitcoin payment);
- Â Bitcoin is a universal currency that can be used worldwide, without any problems with credit card fraud or chargebacks;
- Â Bitcoin transactions are virtually free of any bureaucracy.
- Â Bitcoin payments are received instantly by the merchant;
- Â Bitcoin is a decentralized currency, therefore payments are not subject to any foreign exchange fees or delays.
As Bitcoin becomes more widely adopted, it is likely to become an increasingly popular alternative to traditional payment methods for merchants of all kinds. With the number of Bitcoin ATMs growing almost daily and new innovative solutions like Coinbase Exchange on the horizon, Bitcoin is moving ever closer towards becoming a globally accepted online payment method.
As Bitcoin technology continues to improve with its recent announcements of new technology that will make Bitcoin transactions more secure and efficient, Bitcoin’s negative associations of criminality and anonymity are slowly being eroded away. Bitcoin can now be used for legitimate purposes without fear of it creating new headaches for merchants looking for ways to save money on transaction costs.Â
Adoption rates have been steadily increasing since Bitcoin was introduced in 2009, with some major online retailers already accepting Bitcoin as a form of payment alongside PayPal and credit cards. Others include: Overstock, TigerDirect, Expedia, Newegg, Dell Computers, and Virgin Galactic to name a few. Bitcoin as a payment method is also slowly gaining ground in brick-and-mortar stores as well, with companies such as Subway, The Pink Cow, and WordPress all accepting Bitcoin as payment for goods or services.
As Bitcoin continues to shed some of its negative associations it will be interesting to see the impact this has on Bitcoin’s adoption rates, and whether we will begin to see Bitcoin replace credit cards and PayPal as a preferred payment option for merchants worldwide – especially those operating online – over the coming years.
Conclusion
Bitcoin has seen a recent surge in popularity as a payment method due to its low transaction fees and security features. While Bitcoin prices have been highly volatile, Coinbase Exchange plans to provide liquidity on both sides of each transaction, making it easier for businesses to adopt Bitcoin payments. Bitcoin is slowly shedding its negative associations and could eventually replace credit cards and PayPal as the preferred payment option for merchants worldwide.
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