Pros and Cons of Paying with Bitcoin

Bitcoin payments are becoming more common than ever, but is it worth the hype? What are the pros and cons of paying with Bitcoin?

Bitcoin has come a long way to be here. When it was first released, the value of 1 BTC did not even reach $1, but now it tops the crypto market with a value of nearly $50,000. Back in 2009, the mysterious founder of Bitcoin, Satoshi Nakamoto, was the first to introduce blockchain technology and claimed it to be a safe, efficient, and reliable way to send and receive cryptocurrencies. But, who would have guessed that the coin would be used to pay transactions and even considered to replace fiat currencies in some places?

The idea of making transactions using Bitcoin instead of regular currencies is eye-opening. From giant companies to small businesses, today everyone is looking forward to making a massive leap towards digital currency, especially Bitcoin. It is currently the largest cryptocurrency in existence and the most mainstream one to use as a medium of exchange. Now more than ever, people can make a purchase of various goods and services online using BTC in their Bitcoin wallets.

However, transitioning from traditional currency to digital currency is definitely not an easy task. Like any big changes in general, there are differences and adjustments to be made. Some people are also still very skeptical about the future of Bitcoin and cryptocurrency.

In fact, not all business owners are eager to use Bitcoin as a form of payment as there are many factors to consider. So, besides having many excellent benefits, Bitcoin also comes with several downsides that should not be taken lightly. Let's break them down and see if paying with Bitcoin is really worth it.

The Benefits of Paying with Bitcoin

Below are some advantages of Bitcoin payment for users. The Benefits don't only revolve around the ease of payment, but also deals with security and low fees.

1. Great Security

Everyone must be worried and concerned when it comes to money transactions, but Bitcoin is one of the safest payment methods out there. Bitcoin uses a safe and transparent decentralized system that lets you track your Bitcoin movement 24/7. Each Bitcoin transaction is written on a public ledger that anyone can see, so it's technically impossible to steal Bitcoin unless the hacker gets a hold of your wallet's private keys.

While there are several reports of hacks at crypto exchanges, Bitcoin's exchange has remained safe from such breaches. The implementation of the KYC/AML policy supports even more secure transactions. Not only that, it's worth noting that all Bitcoin transactions are irreversible, which means that they cannot be amended or manipulated by anyone. So it's not possible to file a charge-back or reverse the transaction in any way. The only way to reverse is to have the recipient send back the original Bitcoin.

2. Peer-to-Peer Basis

Unlike other modes of payment, the Bitcoin payment system is purely peer-to-peer. Bitcoin operates in a decentralized network that allows users to send or receive Bitcoin to or from anyone across different networks from any part of the globe. Unless they are sending or accepting Bitcoin from a regulated exchange or institution, users would no longer need confirmation from another source of authority. Thus, there is no single authority that controls the network where people can send or receive Bitcoin directly to each other. This also means that each transaction is not restricted to follow certain guidelines and rules of any government or similar authority.

3. No Additional Fees

Not only does Bitcoin make payments much simpler, but it also makes them cheaper. If you make transactions via fiat currency, chances are you're going to get various kinds of fees, mostly for the bank or third party’s service. Meanwhile, since Bitcoin transactions don't involve intermediary institutions or government authorities, it is able to offer fewer transaction fees. That means you will no longer have to worry about account maintenance fees, minimum balance fees, overnight charges, as well as deposit and withdrawal fees.

Yet, it should be noted that paying with Bitcoin is not completely free. There are exchange and wallet fees to think about. They vary depending on the platform or wallet that you're using, but they are generally lower than standard transaction fees for fiat currency.

See also: List of Crypto Exchanges with the Lowest Fees

4. Wide Customer Reach

All Bitcoin transactions are done online, so it has no border restrictions. Anyone can make payments from anywhere at any time. So by using Bitcoin, you can reach a wider audience and expand your business without having to add extra costs to open a new office elsewhere or hire new employees. Instead of dealing with third parties and intermediaries, you can make transactions directly with anyone from all across the world. Therefore, accepting Bitcoin means expanding your reach to a global scale and entering more markets.

Accepting Bitcoin payments is actually a great marketing strategy as well. You could write a press release for it and mark it as a new chapter or an important milestone for your business. You could also build your awareness around it by showing that your business is innovative and modern.

5. Accessibility and Mobile Payment

Another advantage of using Bitcoin is that it offers high accessibility. In order to use Bitcoin, you only have to prepare a good internet connection, a Bitcoin wallet, and a device to access it. In this case, you can either use a phone or a computer. That being said, you can access your Bitcoin anywhere in the world as long as you have an internet connection. You don't have to physically travel to a bank or store to manage your coins. On top of that, there's no necessity to provide personal information to complete any transaction, unlike online payments with bank accounts or credit cards.

6. User Autonomy

Traditional fiat currencies are subject to various restrictions and risks. For instance, banks are vulnerable to economic downturns and might experience instability during crises. Such situation can make your funds vulnerable to unpredicted events that are out of your control and have occurred numerous times in the past. In other words, you are never in complete control over your money.

On the other hand, Bitcoin is not linked to any specific government policies, so it promises its holders user autonomy. Users can control how they can spend their coins without having to worry about the intervention from any external authority.

The Disadvantages of Bitcoin

Despite the arguably overwhelming advantages of paying with Bitcoin, there are still some shortcomings to consider if you plan to try using Bitcoin for online transactions:

1. High Volatility

All Bitcoin users must know that the biggest risk regarding crypto is its high volatility. Bitcoin price is extremely volatile, so it can rise and fall rather dramatically in a short span of time. As a result, many investors are pretty skeptical in using Bitcoin because it can be dangerous and unpredictable at times.

When the price happens to move real fast, it can turn possibilities into nightmares. Imagine accepting the Bitcoin when the price is high, but when you convert it, the price dips. It will result in a big loss on your part. The best thing that you can do is to convert the digital currency to fiat as soon as possible before the price moves too far.

2. It's Complicated

Despite its growing popularity, Bitcoin is still considered a relatively new discovery in many places. Therefore, there are a lot of people who still don't understand Bitcoin and how it works. While the transaction itself is actually not that complicated, some people are still not familiar with it. Also, there are many new terms related to cryptocurrency and other additional things that one needs to get the hang of beforehand.

This lack of knowledge and experience from customers, combined with the already complex payment processors used by business owners, can make things a little more complicated. Therefore, as a business owner, it would be really helpful to provide instructions that will inform potential customers on how to purchase the goods with Bitcoin.

3. Regulatory Uncertainty

Bitcoin transactions are considered very secure, but remember that the system itself is still highly unregulated and hasn't fully mature yet. The governments and financial institutions are currently still trying to find a way to regulate the crypto market and make it more reliable. As for now, cryptocurrency laws and taxes are different in each country and are often ambiguous. This condition, unfortunately, makes Bitcoin payment prone to frauds and scams.

Conclusion

Things are changing rapidly in this modern era, so it's necessary to quickly adapt and stay relevant to the changes. Bitcoin offers an easy, safe, and efficient way to send or receive money without having to deal with intermediary banks or third parties. Many giant businesses like Microsoft and PayPal have started accepting Bitcoin payments, further making the coin more mainstream in many parts of the world.

However, considering that Bitcoin price is still highly volatile and unpredictable, you should really think it through before deciding to use it as a medium of exchange. Keep in mind that the industry is still relatively young, so it's still not perfect compared to the already established fiat currency transactions. In addition, always be careful and keep an eye out for cryptocurrency scams and frauds.