4 reasons why Bitcoin is better

While the monetary value of Bitcoin has had its ups and downs (and will likely continue to in the near future), the technological value and the transactional advantages of using the digital currency remain reliable and increasingly promising.

For many businesses and consumers, Bitcoin represents a new and better way to do business. As Gartner’s Rajesh Kandaswamy observes, “The advent of Bitcoins with new digital actors and roles that neglect banks and clearing houses shows how many components of our monetary infrastructure are still replicas of edifices built primarily for a brick and mortar world. It also shows that large and fundamental innovations … are still possible with the Internet, if we are willing to challenge some basic premises.”

The privacy, security, low transaction costs and ease of global purchases offered by Bitcoin make it a compelling payment tool for today’s consumers, and those advantages will only solidify as the world discovers how to get the most out of Bitcoin’s innovations.

So why buy with Bitcoin?

Start with these four reasons.

1. Bitcoin protects your privacy

While most people would agree that personal privacy is important, we live in an era that arguably features less privacy than ever before (thinking of social media, government surveillance, airport scanners, iCloud, data breaches of credit card info, etc.) It’s a lesser-known fact that the first official coin of United States, the Fugio Cent designed by founding father Benjamin Franklin, held an inscription that read not E Pluribus Unum, but “Mind Your Business.” Of course Franklin, the source of many immortal quotes, packed this phrase with as much meaning as possible. The word Fugio (“I fly”) alongside a sundial on the coin means to say that time flies, so Mind Your Business: do your work and be industrious, and at the same time leave others to do their work. If bitcoin did have an official physical minted representation, the inscription “Mind Your Business” would be a fitting one. Bitcoin allows consumers to go about making their purchases as anonymously as they wish. When you buy with bitcoin, you digitally sign the transaction with your private key. The Bitcoin system verifies the transaction from one public bitcoin address to another in the blockchain, a ledger of all bitcoin transactions. While bitcoin addresses are public, the identity of their owners is not known. The privacy of having no personal information attached to your bitcoin address means being able to make purchases without any individuals or institutions being able to know what you’re doing. (So if you’re used to sharing a bank account or credit card with your spouse, bitcoin can certainly make pulling off birthday and holiday gift surprises that much easier!)

2. Bitcoin is safer

Speaking of data breaches, if you shopped at Target, Home Depot, P.F. Chang’s, Michaels, Dairy Queen, Goodwill, Jimmy John’s or Neiman Marcus, or banked with JPMorgan Chase in the past year, you may have been wise to cancel your credit card. Massive data breaches have been a near-constant presence in the news, and the antiquated technology behind the card-based system – with easily mimicked magnetic strips and “secret” 16-digit codes – weren’t originally intended to stand up to today’s security needs. With Bitcoin, your information is secured by the public and private key system, and purchases are safeguarded by the verifiable nature of the blockchain. Bitcoins are yours like traditional cash, but with the added technological advantage that no one, not the government, not PayPal, can freeze your assets.

3. Bitcoin has lower costs than credit/debit cards

Most customers don’t realize this, but when the cashier asks you “debit or credit,” what doesn’t seem like a substantive difference to the buyer is actually of huge concern to stores and banks. Merchants and banks are locked in a battle over credit and debit card transaction fees. Purchases treated as credit card transactions can cost the merchant in the neighborhood of 2% of the total, whereas debit card purchases often include a fee of around $0.20 (This is why you can often buy gasoline at a lower price if paying with cash or debit versus credit card.) These fees help the banks cover losses associated with fraud, which is necessary because, as said above, cards are less secure. Due to these fees, many coffee shops and fast food restaurants that do a large number of low-cost transactions do not accept debit cards, and even Walmart no longer accepts debit card purchases that require signatures. Bitcoin purchase transaction fees are under 1% and dropping. This comes in significantly lower than with cards, and merchants will be able to pass that savings on to the customer. It’s true that your local coffee shop may not yet accept bitcoin, but with the encouragement of a healthy user base (and the financial reward of doing so), they will – and likely sooner than most people think. For updates on which businesses are accepting bitcoin, check out coinmap.org.

4. Bitcoin is the better payment method for global commerce

In a global economy where the selection of merchants and goods is becoming increasingly international, cross-border fees can add a 3-6% cost to a transaction. There are no cross-border fees with bitcoin, giving customers access to all that the world has to offer (and on a level playing field). As merchants take advantage of the more affordable global reach that bitcoin makes possible, price and product competition will increase, which figures to be another benefit for customers. By disrupting traditional payment systems and offering privacy and security in line with what customers require in the 21st century, Bitcoin shows itself to be a system built for today’s commerce. No matter the shifts we see in the currency markets, Bitcoin’s advantages to the customer will prove to be invaluable as the world outgrows those traditional systems.

John McDonnell is CEO of Bitnet, provider of a digital commerce platform enabling enterprise-scale merchants to accept bitcoin payments.