How Bitcoin has Revolutionized Online Payments Systems
Unless you’ve been closely following advancements in blockchain technology, the first two things you probably think of when you hear Bitcoin are investing and sending money.
The first of its kind, Bitcoin allows users to send from point A to point B without the need of financial institutions and middlemen services.
Bitcoin has the power to completely change the way that we handle money online, which is why it’s expected to become one of the most disruptive inventions since the creation of the internet.
Here are some ways that Bitcoin will change the way we send and receive money.
Improved Protection against Fraud
Transactions through Bitcoin offer increased levels of security that aren’t available from conventional money transfer services and financial institutions.
For starters, Bitcoin and other cryptocurrencies are said to be impossible to counterfeit – and in the case of Bitcoin, that’s a claim that’s remained true since its inception in 2008.
Additionally, transactions over the Bitcoin network are also protected against other fraudulent claims, like chargebacks and additional charges that are unaccounted for.
Every node that participates in running the Bitcoin network has the same identical ledger, making it impossible to change and misrepresent transaction records, as well as adjust payments retroactively.
Democratization of Transactions
The Bitcoin protocol is accessible to everyone in the world. While there are limitations that have been put in place in some countries to restrict people from using Bitcoin, these limitations are because of the country’s cryprocurrency laws and not because of Bitcoin itself.
In fact, every individual, business, or financial institution has equal access to Bitcoin provided their country doesn’t restrict its usage.
A Cheaper Way to Send Money
Because Bitcoin cuts out financial institutions and middleman services, you don’t have to worry about any of the fees and paperwork that comes with sending and receiving money – especially across borders.
Instead, the transaction is strictly between you and the other party.
This makes the online payment system faster, more efficient, and cheaper. And with the recent introduction of the Lightning Network, things are only going to become even cheaper and more efficient.
A Safer Alternative to Cash Tipping and Donating
You know the guy sitting on the corner playing his guitar for tips? What’s to stop someone from snatching his tip jar and running away with his earnings?
With Bitcoin, that’ll never happen. Instead, he can receive tips digitally by displaying a QR code to his Bitcoin wallet, which people can use to instantly send him money.
This is just one way that managing money will become easier once Bitcoin becomes part of everyone’s day-to-day transactions.
Crowdfunding Made Easy
While crowdfunding has done a lot to help innovative projects get off the ground, there have also been times where investors were scammed by people who took the money and disappeared.
But with Bitcoin and the introduction of assurance contracts, money can be sent for crowdfunding with built-in terms and conditions that both parties must meet before the transaction is finalized.
Think of it as an escrow service that’s built into the blockchain to make sure that all parties honor their end of the deal.
Making Micropayments Feasible
Now that we’re living on the Internet of Value age, micropayments are expected to become a common way to pay for products.
Micropayments are minuscule payments (usually a fraction of a cent) that are charged for internet services, like buying bandwidth by the kilobyte or paying to watch a streaming service by the second.
With traditional money transfer services that often have long transaction times and minimum transfer fees, integrating a micropayment option isn’t always a feasible solution.
But with the Bitcoin network, micropayments can easily be integrated into billing systems that make sending and receiving small sums of money more convenient for all parties involved.
Improved Dispute Resolution
Bitcoin has the ability to integrate dispute-resolution services into every transaction by giving a third party the ability to approve or reject transactions.
In the event that a buyer and seller are at a disagreement, the third party can step in and prevent the transaction from taking place without even assuming control over the money.
This means that the cash has to never change hands at any point during the reversal process – it just goes back to the sender.
Multiple signature support is an optional service that helps you ensure that your money is protected at all times by requiring more than one device to authenticate a transaction before it can be finalized.
These signatures can’t come from the same device, but you can give your other smartphones and tablets multisig access, as well as trusted third parties like business associates, a board of directors, or a family member.
T he idea is to make sure that no one person has control over the money stored in a Bitcoin wallet.
Added Trust and Transparency
One of the biggest values that Bitcoin has is the fact that the entire process, from start to finish, is transparent. Transactions are permanently recorded and can be looked up by anyone who knows the Bitcoin wallet address or transaction ID.
Moreover, digital contracts are unable to be altered after both parties agree to the terms and conditions, and completed transactions cannot be recalled at a later date.
This prevents con artists and dishonest financial institutions from misrepresenting their transaction history or backing out on their end of the agreement.
A Decentralized Payment Network
Decentralization is another revolutionary aspect of Bitcoin’s network. Thanks to blockchain technology and the distributed ledger, the network is powered by various nodes rather than one central location.
The main benefit of this is because it prevents Bitcoin from being controlled by one sole authority, as it would require 51% control over the network in order to inhibit or prevent transactions.
Furthermore, decentralization also makes Bitcoin more secure by eliminating the likelihood of the network going down due to a single point of failure.
Self-Service Payment Solutions
Bitcoin payments can also be easily integrated into booths and kiosks where self-service payments take place. At the moment, this technology only serves to replace credit card and cash payments at these machines.
But in the future, Bitcoin payments could become automated, thus reducing the need for cashiers and store attendants – like in the case of AmazonGo, a no-checkout brick-and-mortar store that the e-commerce titan is currently testing.
Bitcoin and the Future of Payments
As you can see, Bitcoin has the potential to change the way we send, receive, and spend money in a number of ways.
Companies are just now beginning to look into just how much Bitcoin and other blockchain solutions can help make their payment processing systems more efficient and effective.
And because Bitcoin is safer and more secure than traditional payment methods, there’s no reason why we shouldn’t see Bitcoin being employed more in contemporary society in the near future.