Taking the world by storm, Bitcoin is currently the most valuable cryptocurrency in the world at the moment. It seeks to do away with the need to carry cash or credit cards around. Being a digital or virtual currency, Bitcoin can be used to make fast and easy online transactions. Since its inception, this crypto has been used to facilitate online payments. Surprisingly, a number of online merchants have adopted this crypto as a means of payment for products and services bought in their stores.
The underlying technology of this crypto, the blockchain technology will be used to record these transactions. While an increasing number of people are currently using Bitcoin to make online transactions, there are certain benefits and disadvantages you should know about before trying this out.
Benefits Of Using Bitcoin For Online Transactions
There are a couple of benefits that come with using this crypto for online transactions, in this section of this piece we’ll take a look at them.
- Reduced Transaction Cost; when compared to the amount most payment platforms charge, using Bitcoin to make online transactions is cheaper. Ordinarily, for most financial institutions, carrying out transactions (especially foreign ones) will require checks from third parties. This increases the cost of processing the transaction. The Bitcoin network is a decentralized platform with no third party. Lack of a third-party contributes to a fairer and cheaper transaction fee.
- Faster Transaction Speed; most financial institutions take a couple of days before processing international transactions. This is because it would have to pass through various departments. These departments will verify if the transaction should be made or not. This does not increase the cost of processing these transactions, it also increases the amount of time it would take. Making online transactions with Bitcoin will only take a couple of minutes to complete.
- Ease Of Transfer; unlike these financial institutions that will require users to present various documents before their transactions are processed, Bitcoin offers ease of use. With a computer or a smartphone and internet connection, you can conveniently send funds to your loved ones wherever they are from the comfort of your home. All you’ll need to do is download a Bitcoin wallet, sign up, fund your wallet account, and begin making these transactions.
Disadvantages Of Using Bitcoin For Online Transactions
Since we have mentioned a couple of benefits, there are also disadvantages attached to the use of this crypto. They include;
- Transactions cannot be reversed; while most people may argue that this is an advantage or benefit, they will find it surprising to know that it could also be a major disadvantage as well. Humans are imperfect and are abound to make mistakes even when it comes to how we handle our finances. For any reason whatsoever, most people may send either more of what they originally had in mind to send or would send funds to a wrong wallet address. In situations like this, the user loses his funds since the transaction cannot be reversed. Financial institutions, on the other hand, offer users the opportunity to reverse or cancel transactions that have been made.
- Volatile nature of Bitcoins; being a volatile currency, Bitcoin does not have a fixed price. When making online transactions, users will need to know how much is leaving their account. With Bitcoin, this is not certain. The amount of 1 BTC coin may rise in split seconds, meaning that the sender will send more than what he should originally have sent.
Bitcoin has proven to be one of the best payment methods in the world. However, there is a need for improvement as an increasing number of crypto payment platforms are being launched daily.