Due to the unique nature of virtual currencies, there are some inherent advantages to transacting through Bitcoin over fiat currencies. Although over a decade old, the digital currency landscape is constantly changing. Most tokens are untested as a medium of exchange, and users should carefully weigh their benefits and risks.
That said, Bitcoin is designed to offer users a unique set of advantages over other payment methods. We’ll take a closer look at those below, but it will be helpful to explore what Bitcoin is before we do. By better understanding how Bitcoin was designed, it will be easier to see the advantages of using Bitcoin for payments.
What are Cryptocurrencies?
Cryptocurrencies are decentralized digital payment systems based on encryption. This type of currency is not controlled by any state, government, or bank, and it allows for direct exchange among its users.
These digital currencies follow the principles of cryptography — but are applied to exchanging a product and service for a value. Compared with standard money, cryptocurrencies use complex encryption, making them very difficult to steal and counterfeit.
These transactions are based on blockchain technology, which consists of data being shared by users. This system contrasts with the traditional one in which data is controlled by a single participant — like a banking institution.
The Impact of the COVID Crisis on the Blockchain
The crisis caused by the global COVID pandemic has also affected cryptocurrencies, as many have seen their market value reduced — including Bitcoin, which fell 50% in just one day.
The crisis has also affected the population’s financial stability and trust in the established system, which could open the door to the development of alternatives like digital currencies. Without going into too much detail, after three months of hiatus, Facebook seems to have relaunched its digital currency project, formerly known as Libra and now called Novi.
According to a survey by bitFLyer, Europeans trust more in the future of cryptocurrencies because of the coronavirus crisis: 66% of those surveyed believe this will be a feasible alternative in the next ten years.
Benefits of Cryptocurrencies
Quick Transactions
While online purchases are instant, there must be a faster bank process for sending money. The blockchain is more direct for the person receiving the money.
Lower Fees
One of the biggest problems with eCommerce for sellers is the fees they must pay per transaction for credit cards and other payment methods. With cryptocurrencies, prices from third-party services are significantly lower.
Strengthened Security
Cryptocurrencies reduce the risk of fraud in digital transactions, as it is complicated to counterfeit and reuse each currency or cancel a transaction once it has been completed.
Broad Market
Cryptocurrencies can be used anywhere in the world without adapting prices and currencies to the area where the sale is taking place.
Better User Experience
The blockchain affects payment and the exchange of useful information for the buyer. For example, online clothing shops could use this system of tokens to create associations with garments and track inventory, the origin of the materials used, and where they were manufactured.
Mobile Payments
Like many online payment systems, bitcoin users can pay for their coins anywhere they have Internet access. Access means that purchasers never have to travel to a bank or a store to buy a product. However, unlike online payments made with U.S. bank accounts or credit cards, personal information is unnecessary to complete any transaction.
Accessibility
Because users can send and receive bitcoins with only a smartphone or computer, bitcoin is theoretically available to populations of users without access to traditional banking systems, credit cards, and other payment methods.
Conclusion
Meanwhile, eCommerce managers should closely monitor news about the blockchain and cryptocurrencies to know how to implement them quickly if they become popular. Even some industries, banks, and countries like China are starting to develop their digital currencies – which could pave the way for the rest of the world.
As with all technologies, you must be up to date with the current trends, which is essential to adapting your strategy quickly and gaining a competitive advantage.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.