The internet has profoundly changed the way we live, work, and play, for many purposes shrinking Planet Earth to the size of a room. We can video chat with a friend in another country as easily as if they were sitting across the table from us. Buy a book from Amazon and have it delivered faster than if we had to go out and find a shop that stocked it. Stream a movie from our sofa when we once would have had to drive to the cinema. Work with colleagues all over the world without setting foot outside our houses, let alone getting on a plane.
But money is still stuck in the 20th century. Many banks are still using the same electronic payments systems developed in the 1960s, and maintain the same mindset towards the business of moving money around the world. In a global era, money is provincial, siloed and inefficient.
Bitcoin is the first true currency of the internet: a universal form of money that exists alongside but outside the control of banks, governments, tech companies and other centralised parties. The Bitcoin Protocol belongs to everyone and no one, and can be used by anyone. It’s money, fit for the 21st century – but it’s also so much more.
While Bitcoin was launched as a form of peer-to-peer electronic cash, it has become something even more significant: financial freedom. What’s more, the blockchain technology on which Bitcoin is based has spawned countless other innovations, many of which complement crypto’s role as internet money.
There’s no shortage of arguments for getting started with bitcoin and using crypto for payments, but if you need any convincing, here are ten to be going on with.
Efficient Cross-Border Payments
The traditional finance (TradFi) and banking system is needlessly inefficient for anyone who wants to move money between different jurisdictions. In an age of global electronic transfers, international bank transfers are still slow, expensive, and sometimes simply impossible, depending on the countries involved.
Cryptocurrency transfers are practically instant, and the low, flat fee is the same whether money is being moved across the street or to the other side of the planet. What’s more, with effective US dollar stablecoins such as USDC and Dai, or the Australian dollar-backed AUDT, the volatility of BTC and other cryptos can be avoided if necessary – making blockchain transfers an effective alternative to TradFi services.
A bewildering and shocking proportion of the world lacks access to banking services. This is true of the 1.7 billion people who do not have an account with a financial institution or through a mobile money provider. More surprisingly, it includes a jaw-dropping 14 million Americans. This is not just a problem for low-income countries.
Cryptocurrency and blockchain-based financial services can be accessed by anyone with an internet-connected smartphone or computer, giving hundreds of millions of people an effective way of managing their finances. This also opens new opportunities for employment and hiring by businesses, who can use solutions like PaymentX to integrate crypto accounting and payments into their payroll processes, allowing them to tap into a truly global labour market.
Cryptocurrency transactions are pseudonymous: on a transparent public blockchain, all transactions are visible, but there is no intrinsic link between an address and a real-world identity. That means, when used carefully, bitcoin and crypto transfers can have a high degree of privacy. Other blockchains are geared specifically towards anonymous transfers. This anonymity is vital not just for personal financial privacy, but for businesses that need to be wary of financial surveillance by competitors.
While crypto transactions are anonymous (or pseudonymous), they are also transparent and traceable. This means transaction records can be viewed by anyone. It’s always straightforward to show that a transaction has been made (for example, from a business to an employee or supplier), meaning that accounts are always readily auditable. This also has implications for tax and accounting purposes, since everything that is recorded to the blockchain is immutable and easily verifiable.
Those living in sanctioned countries, or areas associated with financial fraud, may be prevented from doing business with the rest of the world using traditional financial services. In other cases, customers may be shut out of the banking system by accident or due to misunderstanding.
Bitcoin transactions require no third parties – no trusted middlemen like banks or payment processors. Anyone can send or receive money using a public blockchain. In addition to removing the inefficiencies and costs imposed by intermediaries, this means there is no one to block or reverse transactions. There is no one to interfere with a peer-to-peer transfer, and once sent, the only person who can return funds is the recipient. That makes crypto truly open money: a system that anyone can use, and no one can be prevented from accessing.
Physical cash transactions are irreversible, but electronic transfers can be reversed by the bank or credit card company – and often are, for one reason or another. Customers don’t have full control of their own money. Instead, they are asking a third party to manage it for them and make transactions on their behalf.
Like handing over coins and notes, a bitcoin transaction is irreversible. Payments can never be declined or returned unless the recipient agrees to it. This is important for e-commerce merchants, since it eliminates the problem of chargebacks – where a customer buys a product or service, but then calls the bank or credit card company to fraudulently reverse the transaction after delivery, leaving the merchant out of pocket.
Crypto transactions are ‘push’ transactions: they can only be made with the owner’s express consent. No one else can take money from an account since only the person who holds the private key can make transfers. For example, there are no debit cards that can be cloned by unscrupulous retailers. No sensitive data is exposed when a crypto transaction is broadcast to the network when a payment is made.
Additionally, the Bitcoin blockchain is incredibly secure thanks to its proof-of-work consensus, which means attacking and compromising it is essentially impossible.
All forms of fiat money – dollars, pounds, euros and yuan – are inflationary currencies. Central banks print more and more every year, and in times of economic turmoil like the coronavirus pandemic have undertaken quantitative easing on an enormous scale. This reduces the purchasing power of money over time and erodes the value of savings.
With a fixed supply of 21 million BTC, bitcoin is ‘digital gold’: a store of value that is resistant to inflation. It can be used for payments, but also held for the long term as an investment.
Cryptocurrency is not just money. It is software. Protocols like Ethereum offer the ability to combine these features and create complex financial protocols. It’s also possible to place conditions on payments. For example, blockchain-based freelancer platform LaborX escrows payments by customers and holds them securely until the freelancer has completed the job, at which point the funds are either released or a dispute resolution process is started. That provides protections for both customer and freelancer that are not reliably available on centralised freelancer portals.
The Bitcoin blockchain is hosted on a decentralised, global network of thousands of computers. There’s no way of shutting it down without shutting down the internet itself. That means Bitcoin effectively has 24/7 uptime: it functions constantly, and payments continue to be processed even if individual nodes or users are offline. Contrast that to the TradFi system, where office hours and public holidays restrict the ability to move money and use financial services. Bitcoin is resistant to cyber attack for the same reason, and is robust enough to have avoided downtime caused by bugs that affected major tech companies and financial organisations.
Get Started With Crypto
TimeX offers an easy way to get started with Bitcoin and other cryptocurrencies, and to begin learning more about how these new technologies and forms of money can help you.
Convinced that crypto is going to change the world? Buy Bitcoin on TimeX today!