Can you use Bitcoin as an actual currency?
The cryptocurrency revolution has increasingly attracted debates about the future of fat money, with many worried that they will eventually destabilize local currencies. Critics claim that Bitcoin is the leading crypto that threatens the stability and usefulness of fiat currencies. Some economists and government regulators insist that virtual currencies such as Bitcoin are highly volatile assets that cannot effectively serve as a means of payment.
However, Bitcoin continues to attract mass adoption worldwide. Several mainstream institutions that had previously rejected crypto are embracing Bitcoin and campaigns to take it into several global economic sectors. Although Bitcoin creator Satoshi Nakamoto introduced it as an alternative transaction currency, it has also found utility as a valuable investment asset and innovative technology.
So, can one use Bitcoin as an actual currency? Here’s how Bitcoin compares to fiat money in terms of utility value.
Payment processing
Bitcoin is a decentralized virtual currency that anyone can use to send and receive payments online and in-store worldwide. Bitcoin payments take place on the blockchain virtually, without any intermediary, compared to fiat money transactions that must involve third parties such as banks and money processors. The Bitcoin network only connects the two parties. It is the person who sends the payments and the recipient.
While Bitcoin can simplify payments as fiat currencies, its existence and usefulness are limited to the web site. Unlike local currencies that you can touch and feel, Bitcoin exists in digital form. Also, Bitcoin payments can only be made over the internet. Bitcoin can simplify payments as actual currencies, but all transactions are digitized.
Bitcoin users can process payments through their wallets or reliable crypto exchange platforms like quantum-ai-trading.com
Things you can buy with Bitcoin
As revealed above, Bitcoin can serve as payment in various transactions. This is mainly due to its easy access and divisibility. One Bitcoin is divisible into eight smaller units, known as satoshis. This means that you can use it to make payments for more significant, medium-sized and even microtransactions, such as fiat money.
Several merchants have already integrated crypto into their payment systems so that their customers can pay for various goods and services. Bitcoin has a long list of things it can buy, including cars, games, devices, household items, groceries, coffee, newspapers, surgery, airline tickets, accommodation and virtual assets.
The sellers who accept Bitcoin show their prices in BTC. Therefore, customers know exactly how much Bitcoin they will pay at checkout, depending on the value of the ordered goods and services and Bitcoin’s market prices. However, costs often change rapidly due to Bitcoin’s volatility.
Validation of Bitcoin transactions
Financial service providers such as banks usually require companies and individuals to comply with the Know Your Customer (KYC) rules. However, there is no condition for sellers to register the payments they receive in fiat money. Nevertheless, fiat money transactions are subject to government regulations that strictly control their use in an economy.
Decentralization means that Bitcoin runs without any central authority. This means you can use it to send and receive payments worldwide without any external intervention. However, Bitcoin’s underlying blockchain technology verifies and validates all transactions on an irreversible, encrypted digital public ledger.
Unlike fiat money transactions, which usually require you to reveal your identity, the Bitcoin network does not display users’ real identities. The blockchain book only reveals the users’ public addresses, transaction amounts and times. Bitcoin can serve the same purposes as real money, but transactions are irreversible and pseudonymous.
Overall, you can use Bitcoin to transfer payments as an actual currency. However, all Bitcoin payments are irreversible and are strictly online.