What is Bitcoin?
In a word Bitcoin is, ‘Money’. Granted this is a very simplistic way of looking at it, but let me explain what I mean;
First, lets look at our current “Money”.
What is Money? “Money is a Form of Exchange”.
You go into a shop and buy goods, a restaurant to have lunch, purchase items online etc. You pay with your money, usually in the form of bank notes, coins, plastic or online payment processors such as PayPal, (essentially whatever form of “money” the vendor accepts as payment for their goods or services that you have access to).
Our existing “money” is called “Fiat Money”. Fiat Money is “Money that has been declared as legal tender by a government”, i.e the bank notes in your wallet or numbers in your bank account.
Expanding on the simplistic comment above Bitcoin is ‘Money’ – Many shops, restaurants and people around the world and online accept Bitcoin as a “form of exchange” (payment) for goods or services, this in its very essence makes Bitcoin ‘Money’.
It is important to know that when we talk about Bitcoin being accepted by vendors or people for goods and services, we are not only talking about online retailers. The number of “Bricks and Mortar” shops, restaurants and services that accept Bitcoin in the real world is growing daily.
Why Use Bitcoin?
There are many good reasons to use or accept Bitcoin as a form of payment.
In some places around the world it is about accessibility – You may have seen the recent Microsoft/Temenos advert which says “With the help of Microsoft Cloud, we can enable a banker to travel to the most remote locations with nothing but a phone and a tablet”. It goes on to say “Everywhere there is a phone there is a bank, now a person is able to start a business and employ someone for the first time”
– With Bitcoin, you remove the banker from the equation, transactions are peer to peer (person to person), direct from customer to vendor. This can be in person with a point of access unit (similar to a credit card machine) or an APP on a phone, or can be sent from anywhere in the world to anywhere else in the world.
Other reasons to accept or use Bitcoin;
Ease of use – A scan with a mobile phone APP can make paying or accepting Bitcoin as easy to use as a credit or debit card ‘Contactless’ (Touch to Pay).
Control over your money – Your money is stored in your own personal “Wallet” either on your phone, tablet, computer, or dedicated hardware and is not centrally controlled by a government or bank (think back to 2015 Greek Banking Crisis where people could only withdraw 50-60 Euro’s per day from their bank accounts.
– With Bitcoin, you control your funds, not the banks, if you had Bitcoin during the Greek banking crisis and vendors were accepting Bitcoin as “a form of exchange”, you could have spent as much or as little as needed and not be locked out of your funds.
In my opinion, the biggest reason to use Bitcoin is the near zero costs involved in payment processing.
– Credit and Debit card processors charge vendors a fee to allow them to use their card-readers and to process payments, this cost is usually reflected in the price of goods and services and usually the buyers are the ones paying the extra costs – Bitcoin payment are negligible in most cases and usually cost less than $0.10 (ten cents) regardless of the amount of money being sent.
– Online payment processors and Banks charge fees for international transfers, usually the fee depends on the time-frame and payment amount, usually international transfers take several hours or days – Bitcoin is fast and usually transactions are processed within minutes.
– Most banks charge service fees to actually HAVE an account – As above, with Bitcoin, you control your funds locally, like cash in your wallet, your Bitcoin can be stored on a phone, tablet, computer or dedicated hardware and you don’t have to pay any banking fees to use or store your money.
For a more in-depth look at Bitcoin you can read the entire first chapter of my eBook completely free here: Bitcoin Digital Money Explained where I explain What Bitcoin Is, How Bitcoin Works and Why Bitcoin has a ‘Real World’ Monetary Value as well as a more in-depth look at our existing “Fiat Money”.
Or you can purchase the entire eBook from many online retailers, click the link for a list of current retailers purchase Bitcoin Digital Money Explained eBook.