Some people still remember the days back when Bitcoin was worth nothing (less than a penny). The main reason it was worth nothing? Nobody was really using cryptocurrencies to make any kind of meaningful transaction. Although cryptography enthusiasts and people chancing upon Bitcoin would often download the software to mine it, the Bitcoin that was generated could not be used to make payments except to other Bitcoin enthusiasts looking to trade it for something.
The first ever purchase of an actual product with Bitcoin was actually to purchase Pizza – what is now known as Bitcoin Pizza Day (22th May, 2010), a man named Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered Papa John’s pizzas. That amount would be worth a staggering $115 million dollars today; and it marks the moment where cryptocurrencies would go from being a fun little internet experiment to becoming something much, much bigger.
While you aren’t going to be the first person to do anything meaningful with Bitcoin and cryptocurrencies, there are plenty of reasons why you should start adopting cryptocurrencies as a mode of payment today. Here’s a list of 10 reasons that you might be keen to look at!
1. Much faster cross-border payments
Because blockchain-enabled transactions do not need to go through an intermediary bank of any kind, the transaction is safe, trustless and much faster than traditional banking – a typical bank transfer even between two developed countries usually takes between 1 to 3 working days, whereas a simple Bitcoin or cryptocurrency payment can be made and confirmed in under 20 minutes (usually in seconds!)
2. You can be pseudo-anonymous
Unlike a traditional bank account where you are required to detail your bank account, location, detail and much more, a cryptocurrency transaction often requires only the public address of the wallet in question – the payee does not need to reveal outright further details to the sender.
This gives a level of anonymity; some people just don’t want to be revealing their bank account number, details or even the bank they are using as this is all personally identifiable information (for instance, if I send money to a US-based bank branch, it will potentially reveal where the payee frequents or lives at).
With that being said, one should not assume that these are anonymous transactions, as the source of funds and other details are easily traced on the blockchain (you can track backwards to find out the source of funds to a typical cryptocurrency “entry point” where fiat was exchanged for cryptocurrency). Don’t do illegal things with cryptocurrency as it gives us all a bad reputation!
3. Full control over your funds
Traditional banking systems often employ a fractional reserve banking setup – what this means is that they are not legally required to hold ALL of your bank account’s funds in custody, and can deploy a certain legally allowed percentage of the money in services that would earn them money (e.g. a bank can be offering loans using the amount in your bank account).
Although this is not inherently unsafe as the fractional reserve system allows the bank to fund interest rates on your accounts and make money, it does mean that you do not truly own the money in your bank account, even if it is partially protected by law.
In most cryptocurrency and blockchain-based currency systems, all tokens and assets are not backed in such a risky way – instead, they represent a 1-to-1 ownership on the blockchain, and every single token, Bitcoin or cryptocurrency is tracked in a giant publicly visible ledger that cannot be modified or changed due to its structure (all transactions on the blockchain are connected to each other in a way where attempting to change even one detail will require a computationally impossible amount of effort – or money)
4. It could potentially be a “tax-haven” in some countries or jurisdictions
Editor’s Note: We are not lawyers and the following statements are not legal advice in any way, shape or form. Please look up yourself about how cryptocurrencies are regulated and adhere to applicable laws in your country!
Depending on your jurisdiction, cryptocurrency assets could be treated differently from either currencies or assets. Most countries and governments tax assets rather than currencies; when assets change hands, they charge what is known as stamp duty, or some other type of tax as a way of funding public goods.
Assets can include everything from properties, to valuable objects, goods, company stock, or any form of item with value.
Whereas in the case of currencies, most countries do not tax currency directly – instead, they have strict rules and regulations on the way currency changes hands, which limits what you can do with currencies.
Such rules could affect cryptocurrencies as well if they are legally classified as a currency; for instance, the law could stipulate that the buying and selling of cryptocurrencies must come with a traceable source, or that it must be taxed only if being treated as an investment or purchased through an investment type website.
Most of these are just examples; many countries are still working out their regulations surrounding the use, storage and treatment of cryptocurrencies. But if you live in a country with a favourable stance to blockchain technology, it may be worth looking into cryptocurrencies as a safe storage of value.
5. Cryptocurrencies are typically trending upwards in value
Cryptocurrencies tend to grow in value over time. Ironically, a lot of the success stories behind cryptocurrency millionaires happen to be because they were able to benefit from using cryptocurrency in day-to-day practice (such as running a blockchain-related business), and in the process the upward trajectory of cryptocurrency value led to an unintentional windfall.
We’re not saying that you should buy and store all your business cash as cryptocurrency – that would be akin to gambling – but being exposed to the currency does mean that you will be able to benefit quickly in the event there is such a profitable situation!
6. Blockchain is eventually going to enable microtransactions
One of the biggest use cases for blockchain technology is microtransactions; the ability to pay for products worth pennies instead of in dollars.
Currently, most of these microtransactions are being facilitated in the form of advertising, where content creators are serving seemingly free products in exchange for watching ads.
In reality, these advertisements are not free – they’re a transfer of value from your time as a consumer to the content creator who is paid out for bringing impressions (views) to the advertisement.
Once blockchain is able to lower transaction fees down to a fraction of a penny or even much lower (as in the case of cryptocurrencies such as Nano), it will become possible to replace advertising with tiny transactions.
Being familiarized with blockchain early and sooner means that you will become an early adopter in the future of content creation and content consumption – that could inevitably lead to new opportunities for you!
7. An increasingly large number of people are using cryptocurrency – and you don’t want to be called old
We always look to our grandparents and laugh at them when they do something ostensibly outdated. Numbers actually show that in the US, the youth are no longer able to read analog clock faces as they’ve been increasingly exposed to digital time representations that tell the time as is – and some of them would laugh at the idea of relying on a circular panel to tell the time.
Whether or not you are old, young, or still in your prime, the reality is that we should do our best to keep up with technology. All numbers show that blockchain is here to grow and stay – the number of blockchain wallets has increased drastically from 2016 to 2019, almost quadrupling – and if you aren’t up to date with using cryptocurrencies in your day-to-day, you may soon find yourself being the one laughed at.
Not much of a reason if you don’t care, of course…but nobody likes being called old!
8. An increasing number of brands and companies are accepting cryptocurrency and offering promotions or discounts in association with it
Blockchain is well-positioned to change the way we make payments. A lot of companies have huge costs associated with maintaining payments with existing platforms, with payment methods such as credit cards and digital payments often coming with a hidden cost to these big names.
Cryptocurrencies, although still not the ideal way to make payment, have already begun making headway into reducing some of these costs. Companies like Starbucks, Overstock, Newegg, Namecheap and even Wholefoods are looking into implementing blockchain-based payments.
While it may just be an experiment for some of them, they are undoubtedly carefully looking at the potential opportunities blockchain payments could bring them in the long run. These are likely the businesses and companies able to make the first adoption leap to blockchain technology once it offers a superior way to pay.
9. Automated payments made simple could be the next big thing
Many systems in blockchain are built using Smart Contracts, which are digital contracts executed on the blockchain with specific parameters. They act like vending machines that dispense a can of soda when a specific amount of money is inserted; but instead, the inputs and outputs for Smart Contracts are currencies.
Because of the transparent nature of smart contracts and blockchain-based wallets, there are many systems that can be built today that replace traditional models. For instance, your salary disbursements may one day be on a daily basis instead of a monthly basis, thanks to the wonders of blockchain technology; a company could use smart contracts to automate the entire payout with almost zero associated costs.
With the advent of more and more stable blockchain systems, we’re only finding an increasing amount of use cases for cryptocurrency – some could be as close as just one year away.
10. You may soon find yourself using cryptocurrencies without knowing it
Banks, large companies and tech giants are all looking at the potential of blockchain. The heavily reported Libra cryptocurrency from Facebook is just one big example; in reality, many banks have started to deploy experimental systems such as intra-banking networks using the very same technology powering blockchain today.
Paying with cryptocurrencies goes beyond just preparing for this eventual transformation; ultimately, we want to be educated and able to shape the decisions that drive these tech transformations, and ensure they are used for good.
Libra has already been heavily scrutinized due to its wide-reaching implications as a currency outside of the purview of governments that is operated by a powerful company; their implementation needs to receive the awareness and feedback from the public in the same way that data privacy is now treated.
Technology is a double-edged sword, and as consumers, we must always be vigilant and educated and push for its use for good.
Oobit is a financial service that makes buying and selling digital currency easy, simple and lets you use crypto with the same ease as traditional money. We connect and introduce what would be an endless maze of information surrounding blockchains, and build tools that enhance the crypto user experience.
Oobit believes the digital currency world should be user-friendly, simple to operate and instant for anyone. Find out more at Oobit and purchase your first Bitcoin today.
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