In the short time since Bitcoin was introduced, its value has increased greatly, and it may be helpful to compare Bitcoins to other electronic payment methods.
There were increased transactions volumes in the fiscal year ending October 2013. In the U.S. for instance, over 8 billion dollars in transactions were made with Bitcoins.
Contrastingly, The Bank of America, Western Union, PayPal, Automated Clearing House (ACH) Network, and Fedwire uniformly processed 132 million transactions for a cumulative sum of 599 trillion dollars in 2012 as reported by the United States Department of Treasury in November 2013.
Bitcoins have a long way to go before being overtaken by alternative digital currencies as a means of transactions.
However, below are the major advantages it provides to the users:
- Protection from Payment Fraud: Bitcoins are a digital currency, and as such, cannot be faked or reversed arbitrarily by the sender, as often seen with a credit card.
- Reduced Possibility of Identity Theft: When you hand in your credit or debit card to a business, you give him full access to your credit line. The operations of credit cards are ‘pull’ basis, where the store initiates the payment and pulls the designated amount from your account.
- However, Bitcoin operates on ‘push’ mechanism that allows the Bitcoins holder to send the exact amount to the merchant with no further information made available to them.
- Lower Transaction Fees: There are usually no transaction fees for Bitcoins exchanges because the miners who provide a network for the smooth running of all transactions are compensated by the network with newly issued Bitcoins.
- Even though there are no transaction fees, many still notice that most users will engage a third-party service, like the Blockchain and Coinbase which are rewarded minimally for the security and maintenance they provide.
- Access to Inaccessible Markets: There are great populations of the world who are restricted from some of the services provided by some credit card issuers like PayPal.
- These individuals mostly hail from Africa and Asian countries, although they have access to the internet either through the mobile phones or computers.
- With the advent of Bitcoins, access to unexplored markets is beginning to go into full swing.
The most recent is Kenya’s M-PESA system, a mobile phone-based money transfer and microfinancing service announcing a Bitcoin device, with one in every three residents of Kenya owning a Bitcoin wallet