Why Bitcoin is good for global trade

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Many crypto enthusiasts describe Bitcoin as the currency of the future for global trade. Find out the main attributes that give Bitcoin an advantage in international trade.

Bitcoin is a decentralized digital currency recognized and accepted as a legitimate means of payment worldwide. While only El Salvador has made Bitcoin legal tender, several other countries allow entities and individuals to use it as payment for various goods and services. Most Bitcoin adopters use it mainly to settle transactions worldwide, citing it as a safer, faster and cheaper currency than fiat money. You can also join the bitcoin trading trend by using a reputable platform like bitcode method. So why is Bitcoin good for global trade?

Highly efficient cross-border transactions

Global traders exchange goods and services across multiple countries, with significantly different policies and laws. While transactions still occur in fiat currencies, customers are constantly subject to various restrictions. For example, central banks set strict rules for specific transactions, volumes and frequencies for companies and individuals. The institutions even have the power to refuse payments to and from certain blocked countries.

Unlike fiat money, Bitcoin is not bound by government regulations or institutional influence. Instead, it runs on a decentralized consensus-based network. This means that no bank, money processor or authority can limit the types, volumes and frequency of Bitcoin transactions. Also, there are no restrictions on who or where you can trade with Bitcoin. Instead, Bitcoin allows everyone on their network to autonomously send, receive, spend and store Bitcoin.

Fast and affordable payment processing

Global trade takes place between several parties in different parts of the globe, only brought together by the need to exchange goods and services. Such transactions have historically involved fiat currencies that often require parties to go through established institutions such as banks and money processors to complete cross-border payments.

But involving third parties comes with more significant delays and higher costs as each service provider has its own terms and conditions. Bitcoin is decentralized, and users do not need banks or money processors to settle payments. Bitcoin’s blockchain network verifies and validates transactions without involving third parties. Instead of the several hours, days, or weeks it usually takes to process fiat money transfers, Bitcoin payments take an average of 10-30 minutes.

The absence of intermediaries in Bitcoin transactions ensures almost instant and cheaper international payments. You can process Bitcoin payments directly through a personal wallet.

Improved transaction security and transparency

There has been a growing distrust between traditional financial institutions and the public. And that’s mainly because of the multiple parties and paperwork involved in cross-border transactions. The declining trust between service providers and customers has created the need for a streamlined payment system, and Bitcoin may be the best solution.

Bitcoin is a digitized currency, and its use does not involve paperwork. You only need a smartphone, computer or tablet and an internet connection to trade Bitcoin, using public keys to identify yourself. Thus, you do not reveal your real identity because the key is a series of random numbers and letters that are unique to each wallet. Users must pair their public key with a private key to authorize transactions via their wallets. It ensures greater user autonomy and transaction security.

Bitcoin’s blockchain verifies and validates all transactions on a digital public ledger. The information is encrypted and only users on the network have access to it. The Bitcoin ledger makes it imperative for both parties to comply with the terms of the agreement and complete payments without dishonesty. Also, all the validated Bitcoin transactions on the blockchain ledger are irreversible, preventing double spending and other fraudulent risks.

Overall, Bitcoin may be an infant invention. However, it has already proven its potential to transform global commerce by facilitating efficient cross-border transactions, fast and affordable payment processing, and improved transaction autonomy, security and transparency.