Bitcoin: The Future of Digital Payments?
Is Bitcoin the future of digital payments? This is one question that is uppermost in the minds of crypto investors. Following publication of Bitcoin’s whitepaper in 2009 by Satoshi Nakamoto, this crypto took its first step into the crypto world. Since then, there has been no looking back.
When the Internet was launched way back in the nineties, no one knew how far-reaching its effects were going to be. The same is true of digital payments; it is not easy to predict what the future holds. The only thing one can know for a fact is that the amount of electronic transactions will keep growing. Making digital payments has become easier than ever and most people, even in remote locations, can access this technology with ease.
With more and more people buying smartphones and reasonable charges imposed by companies like Square and PayPal, even small businesses can now accept digital payments. In recent times, smartphone apps such as Cash and Venmo have allowed users to make electronic payments on-the-go. Existing card readers, vending machines, and parking meters are likely to be replaced with tap-to-pay devices. So, digital payments will get easier and better with time. This also means that more and more businesses will embrace the blockchain to facilitate digital payments.
Bitcoin became a game-changer because it could process transfers without banks or financial institutions acting as middlemen. Also, with the availability of a large number of exchanges and trading bots like Bitcoin 360i 2023, anyone can easily buy and sell bitcoin. Bots like Bitcoin 360 AI are effective trading software that allow users to benefit from automated trading of crypto. Blockchain can reduce transaction costs and this is why it is likely to be used for processing digital payments in the future. For instance, many businesses have already started doing this and the NASDAQ declared that it will create a blockchain-styled digital ledger for managing equities. Deloitte, a consulting firm, has started the Deloitte Cryptocurrency Community for advising clients on using blockchain for fund exchange and streamlining staff payments.
For the common man, the benefits of switching from existing payment systems to digital payment systems appear to be less. So, while the blockchain is likely to be adopted for transaction processing, average consumers may not switch immediately to digital currency. They will only do so when they find that the switch to cryptos allows them to complete transactions that they cannot do otherwise. For instance, people started using the Bitcoin for making illicit transactions through the Silk Road. Some suggest that cryptos offer a convenient system for monetizing contributions which are zero-priced. Cryptos can be divided into many decimal places, like eight for Bitcoin. So, BTC and altcoins can be somewhat successful as niche money. They can be more than that in countries having weak currencies. The most likely areas where a crypto would find greater acceptance is where incumbent money is not managed properly. Here, the benefits of switching to digital payments may be enough to justify the costs of switching.
History shows that people have usually been reluctant to switch to new currencies even when there are no legal limitations. Even if they have switched, they prefer currencies of the biggest trading partners or stable currencies like Euro and USD. In the years to come, cryptos may thrive because unlike paper currencies, they let you make electronic payments. For instance, in Kenya, where the population may be unbanked but have smartphones, systems like Vodafone’s m-pesa have succeeded. When incumbent currency is unstable, people find it safer to transfer cryptos. Bitcoin stands for a major technological breakthrough in payment processing and one can expect it to be the future of digital payments.