Is Bitcoin The Future of Digital Payments?

When you think of Bitcoin you automatically think of it becoming the future of digital payments. Why is this so? It is because Bitcoin is a decentralized peer-to-peer payment system that is not issued or controlled by governments. It facilitates cross-border transactions in a hassle-free manner. While you can have multiple Bitcoin addresses the transactions are anonymous and will not reveal the sender or recipient’s identity.

In view of these features, one can argue that the Bitcoin has the potential to topple the manipulated bank system in the long run because it lets people store their savings discretely and confidentially. At the same time, just like any other forms of payment, it is possible to use Bitcoins for legal and illegal purposes. The real question then is whether it facilitates criminals to siphon money illegally and how regulations must deal with such threats. As Bitcoins cannot yet be used for purchasing a lot of things directly, retailers and users need to convert Bitcoins to cash or fiat currencies. Such conversions happen via exchanges; if these could be regulated, then their use could be properly monitored. Currently, Bitcoin is seeing a lot of innovations and the latest the automated trading bots like bitcoin prime. Visit homepage to learn more.

Both the Bitcoin and other payment systems co-exist with one another at the moment and both will probably continue to exist even in the near future. But the sudden surge in popularity of the Bitcoin has led financial institutions to ponder over things like transaction fees. It is evident that banks can be manipulated whereas Bitcoins are tamper-proof and cannot be deleted, edited, or intercepted. This advantage will probably drive more and more countries to embrace Bitcoins as the accepted payment system. Bitcoins are also in demand in places where accessibility to banking services is limited.

People are shifting towards digital payment methods as these are far more convenient than face-to-face exchanges. Almost everyone has a smartphone and the relatively lower fees charges by platforms like PayPal and Square have enables even small businesses to start accepting electronic payments. Processing of transactions vis-à-vis the blockchain seems to be far less costly compared to traditional payment systems. Businesses have been taking to this technology quite fast; even Deloitte, the globally acknowledged consulting firm, has set up the Deloitte Cryptocurrency Community for advising its clients about blockchain benefits in funds exchange and handling staff payments. The Federal Reserve System in the US is exploring the blockchain for processing inter-bank payments. As the technology becomes more familiar, more enterprises will start using it.

It will be some time before the average consumer switches from regular money to a cryptocurrency. While some may experience huge profits by doing this as it may let them do transactions that they otherwise could not have completed (illegal purposes) and Bitcoins and other cryptos can emerge as niche money for countries having weaker currencies, historically speaking, people have rarely switched to currencies that have no legal restrictions. They have done so only where there has been support from the government or instances of hyperinflation.

So, Bitcoin and other cryptocurrencies will probably continue to thrive in environments like these because unlike paper money, users can make digital payments. For instance, in Kenya, where banking services are rather limited, people tend to use digital payments as they have easy access to smartphones. When incumbent money is particularly unstable, users will prefer to use their phones to transfer cryptos instead.