Payment freedom – It is possible to send and receive bitcoins anywhere in the world at any time. No bank holidays, borders, bureaucracy. Bitcoin allows its users to be in full control of their money, and there can be no third-party seizure of bitcoins. Governments cannot freeze your bitcoin, and you have complete freedom to do anything you want with your money. There is also no way for a third party to intercept bitcoin transactions, thus no viable way to implement a bitcoin taxation system. Unless users publicize a wallet address, no one can trace transactions back to them. No one, other than you, will know how many bitcoins you have. And should a wallet address be publicized, a new second wallet address can easily be generated and used for the bulk of your transactions. Compared to traditional currency systems, this greatly increases privacy and eliminates the ability for third parties to have access to personal financial data.
Low Transaction Costs – There is no fee to receive bitcoins, and many wallets let you control how large a fee to pay when spending. A higher fee will help ensure faster confirmation of your transactions. Fees are unrelated to the amount transferred, so sending 100,000 bitcoins costs the same as sending 1 bitcoin. Additionally, merchant processors assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants’ bank accounts daily. These services are offered for much lower fees than if you use a PayPal account, or credit card merchant networks. To send and receive bitcoins, users need to connect to bitcoin services that are connected to other nodes. By using bitcoins, users contribute to this network and therefore share the burden of authorizing transactions – thus making transaction costs negligible.
Fewer risks for merchants – Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance to accept bitcoin online. Merchants can sell to customers living in areas where either credit cards are not available, or fraud rates are dangerously higher. So – lower fees, larger markets, and fewer admin costs.
Security and control – Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods, such as credit cards or paypal accounts. Bitcoin payments can be conducted without the need to include personal information in the transaction. This offers strong protection against identity theft. Bitcoin users protect their money with backup and encryption, and no other entity controls or possesses that information. Once bitcoins are sent, the transaction cannot be reversed. This reduces the risk of “chargebacks” for online merchants as the result of fraudulent claims.
Bitcoins cannot be stolen. No one can steal your bitcoins unless they have physical access to your computer, your secret authorization codes, and they send the bitcoins to their account. Unlike conventitional currency systems, where only a few authentication details are required to gain access to finances, bitcoin systems require physical access, which makes it much harder to access and steal.
Transparent and neutral – All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.
Despite the disadvantages due in part to the “newness” of bitcoin, and because of the advantages that already exist – I feel the need to give serious consideration to the viability of BitCoins, because of its potential to provide cost-free, aggregate risk protection.