No matter what industry you’re in, you likely rely on the internet now more than ever before. Even businesses that were slow to embrace technology have now gone digital, largely due to the pandemic pushing them to finally move most interactions online. And the payments sector is no exception to this trend, as digital payments are on their way to becoming the standard. In particular, Bitcoin has gotten a lot of attention for being an easy way to pay. So, is Bitcoin the future of digital payments, and why or why not? Here’s what you should know about this type of digital payment.
Bitcoin has gotten increasingly popular in recent years, yet it’s still a mystery to many people who could benefit from this type of digital payment. So if you’re intrigued by Bitcoin—but know little about it—you’re not alone.
Simply put, Bitcoin is a type of cryptocurrency, which is an electronic version of money that you can use without involving a bank or government agency. This is why it’s often called decentralized currency, as it’s run by thousands of computers across the world, not one financial institution or government department. These computers run this currency’s code and store its blockchain—which is a collection of transactions that everyone can view.
Every time you pay with Bitcoin, the transaction gets recorded on a ledger—called a blockchain—and is then validated during a process called proof-of-work. This involves people called miners using their computers to calculate the cryptographic key to be used on the next blockchain block. Anyone who has a computer and is interested in mining can get involved in the proof-of-work process, which is part of what makes Bitcoin known for being transparent. After all, the blockchain that records Bitcoin transactions is visible and accessible to everyone, so no one can change or erase it.
Now you know the basics about Bitcoin and how it clearly differs from cash or credit cards—as it’s entirely digital and not managed by a single entity. But what makes it a popular way to pay for transactions, and is Bitcoin the future of digital payments? Look at the pros and cons of this form of payment.
The reason there’s so much attention on Bitcoin right now is that this type of digital payment has a few benefits that are valuable in the money transfer industry. For one, it’s decentralized. No government or bank is behind Bitcoin, meaning the middleman is cut out when people want to complete digital transactions. This can make paying with Bitcoin simpler and sometimes cheaper than other forms of currency. Even if you need to pay internationally, your transaction fees will be very low compared to what you’d pay for a wire transfer. And since this system is peer-to-peer, you can send or receive payments from anyone without having to wait for approval from a banking institution or government agency.
Another benefit is ease of access. As long as you’re online and have a computer or smartphone, you can pay with Bitcoin. This is helpful for people who don’t have bank accounts or credit cards but want to pay for certain major purchases online. And since Bitcoin is done entirely online, you don’t have to leave the house to go to a bank.
Of course, there are some downsides to Bitcoin. First, while the fact that it’s unregulated might appeal to many people, this can also make others wary of it. After all, if anything goes wrong with Bitcoin, you don’t have any protection for your investment. If it ends up stolen, you can’t get it back. And it’s definitely possible for Bitcoin to be hacked or stolen since no form of payment is totally off limits to cyber criminals. This is why it’s not exactly a foolproof form of digital payment.
Similarly, Bitcoin is known for being volatile when it comes to its value, as it goes up and down frequently. If you buy while the value is high, and that drops weeks later, you could lose a lot of money. This makes it riskier than other forms of digital payment.
Another disadvantage of Bitcoin is that it’s not accepted everywhere yet. So depending on where you want to buy from, you might have to sell your Bitcoin or use another form of payment. For instance, Bitcoin is not accepted as a way to pay for real estate transactions since it’s decentralized currency. This means it’s definitely not the only type of investment you should have right now, especially if you plan to buy a house any time soon. Instead, you’re going to need to rely on a trusted form of payment if you want to invest in real estate, such as a method of electronically transferring payments securely.
As you can see, Bitcoin has some pros and cons for businesses and individuals alike. So, what does that mean? Is Bitcoin the future of digital payments or not? The answer is that so far, most experts have not made this claim. There are a few reasons for this.
While it may be considered simpler and more secure than some older forms of payment–like wire transfers–it’s still targeted by cyber criminals. This means it’s possible to lose a lot of money with no way to get it back, which is the last thing you need if you’re thinking about buying a house in the future. And the fact that it isn’t an acceptable form of payment everywhere right now–especially for real estate transactions–means it’s not recommended that you put all your hopes on Bitcoin.
Fortunately, there are other types of digital payments that are more trusted and accepted just about everywhere, including in real estate transactions. Paymints.io is one such option. When you use a secure electronic form of payment like this one, you can safely complete large transactions. This method is especially beneficial compared to personal checks and cashier’s checks, which some people are still using to pay for major purchases like real estate. After all, writing a personal check or getting a cashier’s check is definitely not a seamless process. It means you have to carry them with you—which is not always convenient—and then there’s the possibility of one or more personal checks bouncing. This can lead to fees, embarrassment, and lost time as you have to communicate what happened and submit payment again.
If you’re tired of using checks, and you’re looking for all the benefits of digital payments without the risks that come with Bitcoin, you should look into paymints.io. It’s ideal for anyone who is not comfortable investing in Bitcoin but wants the advantages of seamless, secure digital payments. At paymints.io, our money transfer platform is quick and easy to use when you need to send or accept digital payments safely. Schedule a demo today to learn more!