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Hello Steemians, its my first post of the year. Welcome once again to my blog, I remain @tomfreeman, the guy who is interested in success and happiness.
This time we'll be discussing bitcoin as a veritable currency which should be adopted by all who advocate revolution especially in the area of commerce. I'll also discuss it's pros and cons and its potentials/prospects for the future.
I'll entertain comments and opinions/counter-opinions at the end.
There is no point saying the fact that the global world has gone digital. Virtually everything is being done online. Even business men and "busy bodies" would prefer to "make things happen" at the comfort of their bed.
The banking sector or system is not an exception to these developments. People want to complete cash transactions without having to visit banks. But also, many including me would prefer to transact without third party interference in form of a financial institution.
The stress of queuing and the weirdness of huge transaction charges makes developing a currency and payment system that saves stress and cost, nothing short of a "just" course. Hence the concept of bitcoin.
WHAT IS BITCOIN?
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Bitcoin is a crypto-currency invented by an unknown man/group named SATOSHI NAKAMOTO on the 9th of January, 2009, according to wikipedia.com. Bitcoin as we know is a revolution and pace-setter for other crypto-currencies including STEEM.
CRYPTO-CURRENCIES are digital currencies that are decentralized in a way to ensure peer-to-peer transactions without banks or third party interference. Emphasis should be laid on the word "peer-to-peer" which means transactions can be done directly without a central body in form of a bank.
For a currency to be acceptable by all, it must possess certain characteristics which includes but not limited to:
- A medium of exchange
- A store of value, and
- A standard for payments.
Bitcoin as a currency is designed to possess all these characteristics, if not more.
"BITCOIN HAS ALREADY RECORDED A GROWTH OF OVER 10,000% SINCE ITS LAUNCH. WHAT OTHER CURRENCY DOES THAT?!"
The value of a bitcoin token was less than a dollar, but as the time of this write-up 1 bitcoin= $13,570.70. check https://coinmarketcap.com for the current price.
Bitcoin coins or tokens are results/rewards of a process called MINING. Just as the traditional currencies are printed/minted, crypto-currencies are mined. but in order not to derail or diverge, lets gather all focus to the benefits/advantages of bitcoin as a PAYMENT SYSTEM/SOLUTION.
In the commercial world, the two main parties involved in a transaction/s are:
- The buyer/s, and
- The seller/merchant/s
However in some instances we have the company who links the buyer with the seller as in the case with Amazon, Jumia, OLX and other big e-commerce industries. These companies serve as agents and are needed to enhance smooth and faster transactions. The crypto world refer to these companies or individuals as ESCROW agents. Escrow services can be needed especially where bigger transaction is involved and there is little or no relationship or trust between buyers and sellers as it reduces risk and fraud.
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For the purpose of this post which discusses why bitcoin should be considered hugely as mode of payment, i'll explain explicitly the advantage and disadvantages as merchants and buyers.
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AS A MERCHANT:
- There should be no worries about transaction fees...the buyer or sender pays it all.
I remembered my years in Lagos, Nigeria. I used to visit a certain bar every Sunday evening mainly to "withdraw cash". Since the bank i opened with is far from my area and to dodge transaction charges at other banks' ATM points, i would rather buy drinks of around #500 and ask the bartender who is my pal to debit #5,000 from my debit card via their POS and pay me balance of #4,500. That would cover my transport for the coming week till the next Sunday and all the same i would be immune to unnecessary charges since the merchants are to be charged for POS and not buyers.
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Unluckily for me one day, it was the bar owner that attended to me. despite my plea, he deducted only the value of the drinks i bought and ordered his bartenders to reject and refute such ideas from customers in the future. He complained bitterly of the huge charges he faces from banks because of the POS. But with bitcoin, merchant or seller only recieve value without charge or fee.
- There is no risk of REVERSALor pay backs:
Bitcoin transactions are "one way", i.e once the value is deducted from the buyer's account and undergoes confirmation, it will never reverse back to the buyer. And so, the fear of losing funds through reversals as it happens in traditional banks is erased.
- There is no monthly fee, subscription fee, minimum balance charge, SMS alert charge, account statement charge, name them...in bitcoin transactions.
Since bitcoin is decentralized, there is no need for any central body in form of a bank to charge ridiculous fees even "for wishing you a happy birthday". Its a peer-to-peer system and frees merchants from charges.
- Huge transactions can be made with ease without caps or limits.
As it is customary to fiat/traditional banks, there are various accounts for various personalities and need, ranging from savings to current, future, business, corporate, primary, secondary, big, small, tall, short...and the list is endless! More painful and somewhat confusing are the charges and caps/limits placed on such accounts.
The structure, nature and "modus operandi" of a traditional bank also promotes segregation. Some people would resign to inferiority and decide to keep their money safe inside their "safe" because of their social status and the way bank officials make it obvious. With bitcoin on the contrary, there is no limit or maximum to transactions.
No one gets to know another balance except deliberately shown. One is free to transact from anywhere and account opening is absolutely FREE.
- There is ease of global transfer:
Bitcoin transactions can be made from anywhere across the globe with the same simple process. It should also be noted that there is no office hours as we have in banks.
- There is little/less concern for currency conversion.
The concerns for fiat currency conversion/rates and how it affects transactions are being eliminated with bitcoin. All values are received and sent in bitcoin. It is a currency after-all.
- There is fast transaction confirmation/s:
Anyone who has received foreign funds in local accounts can testify how slow foreign transaction confirmations can be. At times it takes days despite "flying planes".
Even some local transactions like cheques clearance and NIBBS/NIP takes days or several hours. Only a reasonable amount of time is enough for transactions to fly in the case of bitcoin. The fact that transactions wont be reversed also boosts confidence among parties involved.
- There is high security with block-chain encryption:
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Instead of account numbers, the bitcoin network makes use of encryption in the form of an address. By address i mean a long alphanumeric codes with upper and lower cases.
The address is so long and programmed such that it will be difficult to manipulate. The development is good especially for big companies who would often perform larger transactions as it ensures low vulnerability from "cash predators".
- Merchants can monitor transactions using hash tag/codes or transaction ID on the block-chain network.
A block-chain can be described as a public ledger and cryptography developed in a bid to authenticate and monitor transactions. Both buyers and merchants can monitor progress on the block-chain. This helps to tackle suspicious or questionable transaction evidence as may be provided by "smart" senders as the transaction I.D helps track account and amount.
As an evolving business-people considering the adoption of this revolutionary coin into our business payment solutions, it is pertinent to know also the prospects of paying with bitcoins.This will help convince buyers of its use and foster faster, cheaper and smoother transactions.
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In view of that, lets dwell on the pros of paying with bitcoin as a buyer. There is:
Ease of purchase of items globally without need for currency conversion.
Little charges irrespective of transaction type, i.e local or foreign.
This development calls for sales of products at a cheaper rate since merchants wont be charged on transactions and buyers will pay less in fees.Buyers can also monitor transactions and experience other benefits with sellers.
However there are some challenges being presently faced with bitcoin and other cryptos including STEEM. But as an evolving coin, developers are working to tackle these "cons" for better payment experience. As at the time of this write-up, part of the challenges includes:
Buyers may be defrauded without escrow especially between unknown parties.
Bitcoin has a transaction block-size limit and at every high demand, transactions may be slow and miners may charge higher. Until developers increase the block-size limit to accommodate tons of transactions within few seconds, the slow transaction rate at huge demands lingers.
Bitcoin VOLATILITY makes it considerably risky. Some merchants are skeptical of its acceptance because of this.
Many authorities still have not grasped the concept of a digital currency. This makes it difficult to preach and encourage the block-chain technology. Even the Nigeria government are finding it difficult to device tax payments through the block-chain and as such will go against it.
IN CONCLUSION
The world is becoming a global village. The internet has made it easier to communicate, learn and earn from all over the globe. Steemit, Whatsapp and other social medias enables us to bring global matters straight into our rooms and deliver verdicts "there and now".
This development which has cut across every aspect of our world, should not and will not exempt the commercial and financial sectors. And as such, it is imperative that we buy, sell, deposit, withdraw and do all kinds of transactions and trading right "from our room" without much ado.
We should be able to buy pepper or burger through our e-commerce innovation and pay through the bitcoin technology. Bitcoin in general makes for an easy, smooth and cheap transaction. Also because its still a new and developing coin, the future will be bright as there are rooms for improvements for a worthwhile payment experience.
"Bitcoin will do to banks, what e-mails did to the post offices"...this is an anonymous statement for the future, but its already happening! Lets get ourselves equipped and "take position". Lets remember, "if we snooze, we lose".
As steemians lets focus all our strength to maximizing and exploring the potentials of the block-chain technology in our world.
This is the joy, this is the grace, this is the challenge!
Thanks for reading and don't forget to drop your comments.
I'm Tomfreeman!
References: https://wikipedia.com
https://coinmarketcap.com
https://bitconnect.co