If you have been following our latest cryptocurrencies news here, you probably know that Bitcoin has plenty of benefits in the real world. They include decentralization, anonymity, a chance to gain by storing BTC and many other things. However, the benefit of Bitcoin which changes everything are the low transaction fees, which are a real advantage for many users.
In a world where most people have a credit card which they use to pay for things, the benefit of Bitcoin radically changes everything. When compared to credit cards, BTC transactions seek to operate more like cash: exchanged from one person to another without any financial intermediary.
The original inventor of Bitcoin, Satoshi Nakamoto, planned the benefit of Bitcoin and titled his original white paper “A Peer-to-Peer Electronic Cash System.” This description actually touches on the core differences between Bitcoin and credit card transactions.
In more detail, Bitcoin payments are designed to be analogous to wire transfers or cash transactions, where the payment is actually “pushed” directly from one party to another without the need of being reviewed by a financial institution. The payment processing is executed through a private network and each transaction is recorded on the blockchain, which is public.
As such, the benefit of Bitcoin lies in the fact that it is based on peer-to-peer technology and relies on the blockchain and the cryptography that is securing it – without any third-party oversight.
Providing a personal identification is not needed when making a Bitcoin transaction – again something that very much differs compared to credit card transactions where the buyer authorizes the seller to “pull” a payment from their account, passing through several financial intermediaries in the process.
So, the benefit of Bitcoin is what makes the entire network different from credit card processing. Using an anonymous alphanumeric address, the transactions are made with a private key and payments can also be made on mobile devices by using quick response (QR) codes.
When it comes to savings, Bitcoin merchants can save on credit card fees which range anywhere from 0.5% to 5% plus a 0.30 to 1 USD/EUR as fee for each transaction made. Bitcoin fees, on the other hand, are based on the amount of data that is sent through the network.
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