There’s major hype concerning Bitcoin. What it is about, why people should invest, and how to invest. Out of all the news, you must have already heard about it from peers or breezed through it on social media.
And on the online payments side, there is now a growing number of businesses that use Bitcoin for payments acceptance. If you’re a merchant looking to use Bitcoin for business, you’re on the right track, as it provides a more reliable, quick, and no-fuss transaction.
Read on to know more about Bitcoin and its role in online payments.
What is Bitcoin?
Bitcoin is the first-ever cryptocurrency. It is a form of electronic cash that is ‘encrypted’ in order to regulate and verify the transactions done. Bitcoin is the most popular among other cryptocurrencies, and is used worldwide for online payments.
But unlike regular and virtual cash, it is decentralized and independent. There’s no Visa and MasterCard ruling its online payments system. There’s no central bank nor any type of single authority that governs it.
Its network of users interact freely between each other, anonymous and independent from any intermediaries. Transactions are done directly between users, and are verified through cryptography and blockchain(1).
Bitcoin was released in 2009 as an open-source software, but solid information about its inventor Satoshi Nakamoto remains a mystery. His identity is unknown, but some believe that it could be a group of people, or a group of companies namely Samsung, Toshiba, Nakamichi and Motorola.
Why Use Bitcoin?
As bitcoin is a digital currency, it can be stored online through digital/online wallets, or a hardware wallet.
These online wallets conduct Know-Your-Customer (KYC) verification, and is about the closest thing you can consider as a governing body for Bitcoin.
Upon creation of the online wallet account, users can now pay for their purchases directly and anonymously using Bitcoin.
It is entirely independent, so users and merchants alike do not have to pay for interchange fees. Its straightforward processes make it a fast and easy option for payments, bypassing traditional banking infrastructures.
Nowadays Bitcoin is used to buy anything from VPN, hotel bookings, flights, and even pizza, games, apps, and movies.
Some of the biggest names that accept Bitcoin are Shopify, Expedia, Microsoft, and CheapOAir.
Using Bitcoin for Your Business
Now that cryptocurrency is gaining popularity as a new system for payments, startups must adapt to this new technology as early as now.
The future is bright for online payments. More merchants will eventually adapt to using Bitcoin. In this realm, transaction and interchange fees are nonexistent. These businesses, especially those that accept international transactions, will have less risks to worry about, such as fraud and chargebacks.
The sale is final and irreversible once the bits or bitcoins is given by the customer to the merchant.
This is possible through blockchain, as it keeps a secure public record of all transactions done using Bitcoin. It is secure because it only shows the users’ wallet IDs. Reversing or tampering with a transaction means re-doing all the blocks that came before it. It’s just not possible.
To start accepting Bitcoins, merchants will only have to pay a small fee through companies that allow them to process this technology, such as AltPayNet.
How is Bitcoin Different from Traditional (Fiat) Currency?
Bitcoin is accepted globally, but there’s no need for exchange rates, bank fees, or dual-currency billing. It crosses boundaries.
It has since been likened to gold because unlike cash, there is no means of duplicating cryptocurrency.
In fact, Bitcoin is now one of the most sought-after currency as its value is determined by widest market. It is scarce, not easily corruptible, secure, and immune to inflation.
As rightly summed up by Saifedean Ammous’ book The Bitcoin Standard: The Decentralized Alternative to Central Banking, "Bitcoin is the hardest money ever invented: growth in its value cannot possibly increase its supply; it can only make the network more secure and immune to attack.”
Want to integrate Bitcoin acceptance for your business? Talk to our experts at AltPayNet to learn more.