Why Bitcoin is Good for Global Trade
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Many crypto enthusiasts describe Bitcoin as the future currency for global trade. Find out the main attributes that give Bitcoin an edge 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 a legal tender, several other countries allow entities and individuals to use it as payment for various goods and services. Most Bitcoin adopters mainly use it to settle transactions worldwide, citing it as a more secure, faster, and low-cost currency than fiat money. You may 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 limitations. For example, central banks stipulate strict rules on specific transactions, volumes, and frequencies for businesses and individuals. The institutions even have the power to decline payments to and from some blocked countries.
Unlike fiat money, government regulations or institutional influences don't bind Bitcoin. Instead, it runs on a decentralized consensus-based network. That means no bank, money processor, or authority can limit the types, volumes, and frequency of Bitcoin transactions. Besides, no limitations exist on whom or where you can transact Bitcoin. Instead, Bitcoin enables anyone on its network to autonomously send, receive, spend, and store Bitcoin.
Prompt and Low-cost Payment Processing
Global trade occurs 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 the parties to go through stipulated institutions such as banks and money processors to complete cross-border payments.
However, the involvement of third parties comes with more significant delays and higher costs as each service provider has its terms and conditions. Bitcoin is decentralized, and its 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 remittances, Bitcoin payments last an average of 10-30 minutes.
The absence of intermediaries in Bitcoin transactions ensures nearly immediate and cheaper international payments. You can process Bitcoin payments directly through a personal wallet.
Enhanced Transactional Security and Transparency
There has been a growing mistrust between traditional financial institutions and the public. And that is mainly due to the multiple parties and paperwork involved in cross-border transactions. The diminishing trust between service providers and customers has prompted the need for a streamlined payment system, and Bitcoin could be the best solution.
Bitcoin is a digitized currency, and its usage does not involve paperwork. You only need a smartphone, computer, or tablet and an internet connection to transact Bitcoin, using public keys to identify yourself. Thus, you don't reveal your real identity because the key is a string of random numbers and letters unique to every wallet. Users must pair their public key with a private key to authorize transactions via their wallets. That ensures greater user autonomy and transactional security.
Bitcoin's blockchain verifies and validates all transactions on a digital public ledger. The information is encrypted and only users on the network can access it. The Bitcoin ledger makes it imperative for both parties to honor the terms of their agreement and complete payments without dishonesty. Besides, 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 trade by facilitating efficient cross-border transactions, prompt and low-cost payment processing, and enhanced transactional autonomy, security, and transparency.