Bitcoin has revolutionized the financial industry by introducing a completely new payment system based on decentralized blockchain technology. This made it possible to offer users more affordable financial services without lengthy and complex procedures bypassing banks and their corporate mechanisms. Let’s look at why Bitcoin will become the future of digital currencies and what features it has that allow it to happen.
Digital future – an alternative to the current financial system
Before understanding why Bitcoin will be at the center of cashless payments, it is necessary to highlight the main properties of future digital currencies and determine what they will be like. More and more users and banks are rejecting cash payments, especially in the context of the pandemic. Banknotes can transmit infection and carry many types of viruses, which contribute to their spread. Cashless money does not have these disadvantages. This means that modern digital systems must support cashless payments and transfers, including offline ones.
This is the opinion of major analysts and entrepreneurs. For example, Jack Dorsey, the CEO of Twitter, said that the Internet needs its own currency and Bitcoin should become it. Therefore, in his opinion, it is necessary to adapt online platforms so that users can use cryptocurrency for their needs.
Dorsey also said: “Blockchain and Bitcoin define the future – a world where content exists forever.” This coincides with one of the main properties of Bitcoin: the cryptocurrency can exist forever. The blockchain cannot be destroyed by a single Issuer. The idea is to create a trust system in a non-trusting environment, which is essentially the Internet. These are the properties that currencies of the future should have.
Exchange rates are set by central banks. They also control the issue of fiat money. In other words, control over the currency system is concentrated in the hands of government agencies, which restricts users’ freedom. Of course, banks are looking to simplify their systems and make them more advanced by creating a Central Bank Digital Currency (CBDC). But it will remain centralized.
In addition, digital currencies of the future should be universal. Crypto holders can use Bitcoin anywhere in the world. Therefore, the main cryptocurrency can become a universal means of payment. Many cryptocurrency exchanges established a trading pair with Bitcoin first. Bitcoin is used not only for investments, but also for settlements with other cryptocurrency assets. A blockchain-based system is decentralized, so it can work independently and not depend on a specific organization. This makes digital assets more functional and in demand for providing various services.
Their only significant drawback is volatility, that is, the amplitude of exchange rate fluctuations. In just one day, the exchange rate of cryptocurrencies can change by 10% or more, both down and up. But such strong volatility is due to low liquidity compared to national currencies. As the demand for Bitcoin increases and, consequently, liquidity increases, the volatility of the crypto market becomes lower, which makes them more suitable for regular payments. In the long run, the main cryptocurrencies are growing in price, which compensates for the current lack of volatility.
Fast transfers and payments
When you make purchases, your payment is fast. But many of you have no idea what a complex chain the currency goes through next: acquiring, paying fees to banks, payments to partners, and so on. This is a complex process that requires a lot of money, which increases the fee, and this adds up to the total cost of goods and services. Customers actually pay for all this themselves, so banks and other companies do not charge fees for paying at the checkout.
In addition, transaction processing takes a long time and may take several days until the Bank processes the request. Blockchain allows you to make transactions faster, and the fees can be lower, which will reduce the prices of goods and services. But this applies not only to payments, but also to transfers.
When you transfer money from card to card, transactions are usually made instantly and without fees. But when it comes to transfers from account to account, cross-border payments and international transfers, the situation is different. Before the transfer is received by the recipient, the money must go through a whole bureaucratic chain in the bank, which uses up a lot of resources. All transactions are verified, accompanied by massive documentation and must be confirmed by the bank’s employees. Therefore, banks charge a large fee, and the transfer itself can take up to 3 days. But what to do if you need the money urgently?
Here, blockchain will come to the rescue. Even slow Bitcoin transactions can last no more than a few hours, and in the worst cases, with an extremely high load on the network transaction takes no more than a day. In other words, blockchain makes money mobile – this is the second important feature of digital currencies of the future.
The money of the future should be mobile: instant payments, fast conversion, low fees, and so on. With the fast pace of life in the modern world, it is important that services are provided as quickly as possible. In order to open a bank account, you must provide your personal data (which, by the way, can easily be stolen and compromised), go to the bank’s office or meet with the manager in person. In any case, this is a lengthy and unnecessary procedure. Unnecessary for users, but necessary for legal companies and governments.
And if you need to exchange currency, open a deposit or get a loan, then you need to do everything again and open additional accounts. All this takes time, and it is paid for by the users themselves, who pay for all this work, although they don’t need it.
Digital currencies of the future should be free of these disadvantages. If you want to open a Bitcoin account, you just need to install and create a cryptocurrency wallet, and this is done in five minutes or less.
If you want to exchange a digital asset for another, you can simply connect your wallet to a decentralized crypto exchange (DEX) and quickly make the exchange. And if you need to borrow cryptocurrency, it can be easily done with the help of decentralized crypto lending platforms, such as Maker or Compound. In addition, interest rates there are much lower than in classic banks.
You can even easily open a deposit via services such as Nexo or Crypto.com, and receive from 6% to 12% per annum just for holding cryptocurrency. Interest rates on the Maker and Compound platforms are lower than deposit rates, which even allows you to earn interest on loans, but you will need collateral. If you have already invested in Bitcoin, you can open a deposit right now. In any case, to get access to such simple and profitable services, you need to buy Bitcoin or another cryptocurrency.
Where to buy Bitcoin
You can buy Bitcoin (BTC) for dollars (USD) in various ways on crypto exchanges or exchangers. Crypto exchanges such as Binance, OKEx or Huobi offer a favorable rate, but it is inconvenient to use them. If you need to quickly buy Bitcoin and get coins immediately to your wallet, then exchangers are a better option. But it is important to choose reliable exchangers with the most favorable exchange rate that users trust.
You can do this using the Changevisor service. The site monitors reliable exchangers, sorts them by the offer price for buying or selling cryptocurrencies, and allows you to filter offers by different payment methods: BTC-PayPal, ETH-AdvCash, Perfect Money – Bitcoin, and many others. On the Changevisor website, you can read real user reviews to make sure that the exchanger is reliable and find out how quickly requests are executed, whether there are hidden fees and whether there are delays in the exchange.
Despite its shortcomings, Bitcoin will be the future of digital cashless payments. Cryptocurrency combines the value of assets and the ability to be used in payments. You will not be able to pay in stores with shares, and currencies are not of particular investment interest. Bitcoin embodies the main features of the digital currencies of the future: mobility, functionality, speed and decentralization, which none of the modern currencies has.