With the rising advent of Bitcoin, more and more businesses have begun to accept cryptocurrency like Bitcoin as a valid form of payment. Since its start in 2009, Bitcoin has been a global phenomenon in the financial world toppling other forms of assets with its value. When Covid-19 hit, all forms of stocks fell dramatically except for Bitcoin who stood strong and only gained value, because of its absolute digital nature and resistance to inflation. That’s why many have begun to prefer
1. Bitcoin as a valid payment option to traditional currency
In today’s world making profits in investing is synonymous with investing in Bitcoin. There are several advantages to using Bitcoin to pay for your commodities online. Bitcoin is also more freely available and accessible than traditional currencies with more and more people having access to Bitcoin by mining it. If you are interested in knowing about how to get more bitcoins by mining, you can click here to find out more about it.
However, once we get bitcoin currency in our digital wallet, there is a lot of confusion and myths regarding how we can utilize it for payments. If you too have some digital currency to your name and want to use it for online payments, then don’t worry because you arrived at the right place. In this article, we’ll talk about the various important things you should know before making any online Bitcoin payments. Starting off with -Bitcoin is constantly fluctuating
Bitcoin, in its core aspect, is nothing but a currency that is prone to constant fluctuation. One aspect, however, that sets it out from other currencies is that it’s digital and decentralized i.e. all forms of payment happen completely online using the internet and are not under any government authority. Since it doesn’t have a central authority to control and regulate it, bitcoin is one of the most value-volatile assets you can have.
Consider a scenario where you buy some Bitcoin to make an online payment. You convert your traditional currency, say $125, into Bitcoin and get 0.5 bitcoin (these figures being entirely creative). However, when you arrive at the online platform where you want to make your online payment you realize that the value of Bitcoin has fallen to 0.25, effectively halving the value of the $125 you invested. Thus the commodity that you could have bought for $125 worth of bitcoin, is now double that price while its value in the traditional currency (i.e. $125) stays the same until affected by inflation.
This is a very rare occurrence and it doesn’t change the fact that bitcoin is still an investment. However, you must know that like all other investments it to has its own risks and ever-shifting nature of value. That’s why if you have decided to pay with bitcoin, you should also have a keen awareness of the market and the current rate.
2. Payments you do with bitcoin are absolutely irreversible
Another thing that makes bitcoin payments risky for the new user is the irreversible nature of their payments. Bitcoin payments once paid, cannot be undone unless the receiving party pays you back your money themselves. Once gone, your money has no absolute guarantee of coming back and all Bitcoin users have accepted it as a risk and con of paying with Bitcoin.
This is why you must ensure that the party you are paying is one you can trust entirely without a shadow of a doubt. Bitcoin themself have placed several precautions to help you avoid this. Before transacting your payment, Bitcoin may show you several confirmations asking you whether it’s the correct address you are sending money to. They will also show more confirmations if the amount you are sending seems odd or unnatural, or too low.
Bitcoin payments may gain a reversible payment option in the near future rectifying this major risk, but until then you as a bitcoin payer should acknowledge this risk every time before making a purchase and transaction.
3. You can practice a certain level of anonymity with bitcoin payments
If you use traditional methods of payment like credit cards, debit cards, or your country’s currency, it can be easily tracked back to you. If you are looking for anonymity while sending payments, Bitcoin is your most viable venture to go with. While bitcoin does not promise complete anonymity and your payments can still be traced back to you, it does however provide a much greater degree of secretiveness than other traditional payment methods.
Unless you yourself provide information about your identity in your transactions, it can be really hard to trace them back to you. This is partly because each address that is created for a transaction is immediately changed after the transaction is done. Since your transaction address changes entirely, there is no way that the previous users you transacted with know your current bitcoin address unless and until you tell them yourself.
4. Bitcoin payments provide relief from the commission of exchange rates
One of the major annoyances for travelers that love traveling around is the constant exchange of currency and the commission fees that they have to pay. These commission fees can be quite hefty, amounting to up to 14-16% of your total exchange. Paying such large commissions continuously every time one travels can discourage them from traveling.
This is easily resolved if you have Bitcoin. Since there is not a single institution or country controlling Bitcoin and its assets, it’s free from exchange regulations such as unnecessary exchange fees and foreign transaction costs. This way all you have to do is buy bitcoin with your own currency, travel to other countries, and simply take your bitcoins out in the form of currency you want. The only fees you will be applicable to are the bank fees you took our money out from and Bitcoin’s transaction costs. However, these fees are significantly lower than what you would have to pay if you used traditional currency and offline payment methods.
In the end, Bitcoin and the entire cryptocurrency market come with their own risk but if you are well aware of these risks and know how to counter or avoid them then you don’t have anything to worry about. We hope this article helped you out, and if it did, please consider following our website for regular updates as it will help us out immensely.