Advantages of Bitcoin over traditional payment systems

[danielW]

I often meet newbies and try to explain to them what makes Bitcoin special. I am trying to compile a list of advantages of Bitcoin.

Is there anything anybody feels I should add to the list below?

Also I think its better to keep to concrete, succinct,  advantages. Not what might be considered wishy washy hype about how it will 'help bring sub-saharan Africans out of poverty by allowing them to purchase goats with Bitcoin".

Some of the reasons which I currently state:

-It allows you to have full control of your money, nobody can take away your money.

-It is not controlled by anyone. Its a decentralised peer-to-peer network. Based on open source software. This means it can not be manipulated, Bitcoin supply is fixed modelling it after gold. Nobody can stop or prevent transactions.

-It has low fees compared to other online payment methods like paypal, credit cards etc.

-It is truly global.

-It is programmable money that allows for smart contracts.

-Anybody including kids from their basement, can create financial applications without permission. This is because its open source technology and the network is not controlled by anybody. Nobody needs to ask permission to use it and nobody can restrict access. If you have access to the internet you can access it.

-It is pseudo anonymous and with some extra effort it can be very close to anonymous. You need sophisticated state actors using significant resources to de-anonymise if somebody takes extra effort.

-It is less hackable then traditional payment systems because it is a push system. That means you dont provide your 'secret keys' to receiver/merchant when you make a payment, unlike with credit cards.

[Herbert2020]

it looks good to me.

although i would add security to it.
when using any other payment systems online you are risking your information being stolen like your credit card information, and there is always risks of malware, keylogger, and other things that can steel your information and abuse it.

however with bitcoin since you can do everything offline all the said risks reach zero. you can have a air lock system using a Live linux offline for example, and make the transactions (use your sensitive information like private keys) there and then only broadcast the public data (non-sensitive) online.

also there is no charge back. it means the trust is shifted from users trusting the merchant with their personal information into merchants trusting their users not to double spend. also users trusting merchants (based on the merchant history) to send the product.

[Lauda]

You should definitely mention speed. On average, a transaction will confirm in 10 minutes. Compare that to international bank transaction time. Also, you should expand on "low fees", as in the fee for sending $10 and $10 Million would be the same (assuming they have the same TX size).

[pedrog]

You also should include the disadvantages, it doesn't seem honest just to show the good stuff, you should give a complete picture.

[Indrawan77]

Well paying people using bitcoin is easier and more convenient way, we dont need to carry the money around so it's safer and we can make bitcoin address easier than opening account, so it should make people easier to do transaction

[Lauda]

You also should include the disadvantages, it doesn't seem honest just to show the good stuff, you should give a complete picture.

Such as?

Well paying people using bitcoin is easier and more convenient way, we dont need to carry the money around so it's safer

That does not make it safer at all. Regardless of whether or not you're carrying cash, someone at gunpoint can attempt to force you to move your Bitcoin (no, don't tell me you're not carrying anything on you, because the argument is moot then).

and we can make bitcoin address easier than opening account, so it should make people easier to do transaction

While the latter correlates with the first, it does not cause it.

[TheUltraElite]

You also should include the disadvantages, it doesn't seem honest just to show the good stuff, you should give a complete picture.

Yes there are several disadvantages as well and as well all know comparison = similarity + dissimilarity. On this note I would like to point out some relevant points regarding this matter:

1. Volatility of price of bitcoin is there which makes it a prime target for traders. Bad news for stores/shops
2. Payment Gateways integration is low for bitcoin with respect to fiat currency.
3. Payment Availability in bitcoin is also low. Not many people get paid in bitcoin for offering their service (I am talking in general which means outside this forum)
4. Acceptance and Popularity - bitcoin needs more acceptance throughout the world, that does not mean the US/UK - the rest of the world is also there.
5. Irreversibility of transaction - though I consider it as the least because it is a fault of the user to mis-click and not system. However we are all human and we tend to make mistakes.

Edit: I did remove one about which I am also not very confident as a disadvatage but is rather a misconception.

[Lauda]

1. Volatility of price of bitcoin is there which makes it a prime target for traders. bad news for stores/shops

Very volatile indeed.  

5. Irreversibility of transaction - though I consider it as the least because it is a fault of the user to mis-click and not system. However we are all human and we tend to make mistakes.

That's a feature of a immutable chain, not a disadvantage.

6. Some people consider bitcoin = hackers, drugs etc since we all know about ransom-ware, and many people came to know about bitcoin from ransom-ware, Silk route incident etc

This is not a disadvantage of Bitcoin; it's just a misconception.

[TheUltraElite]

1. Volatility of price of bitcoin is there which makes it a prime target for traders. bad news for stores/shops

Very volatile indeed.  


This is latest news - I think I am talking in general.

5. Irreversibility of transaction - though I consider it as the least because it is a fault of the user to mis-click and not system. However we are all human and we tend to make mistakes.

That's a feature of a immutable chain, not a disadvantage.

I think this is a disadvantage since the chain is programmed like that. Modification needs to be done in this regard in the blockchain technology itself.
But thats just my thought.

6. Some people consider bitcoin = hackers, drugs etc since we all know about ransom-ware, and many people came to know about bitcoin from ransom-ware, Silk route incident etc

This is not a disadvantage of Bitcoin; it's just a misconception.

You forgot to quote the rest of the post -

this is not a disadvantage but a bad name to the coin

[Decoded]

Bitcoin provides ease of access to merchants and clients alike. No weight of coins, and no clumsy handling of notes. Exact payment amounts, too.

[Lauda]

I guess this is latest news - I think I am talking in general.

So, once in 20xx, you'll look back to 2013 and say Bitcoin is volatile?  

I think this is a disadvantage since the chain is programmed like that. Modification needs to be done in this regard in the blockchain technology itself.
But thats just my thought

You're wrong. That's where the intrinsic value of a blockchain stems from; without immutability Bitcoin would likely be worthless (or near this).

You forgot to quote the rest of the post -

this is not a disadvantage but a bad name to the coin

My bad, it cut of for some reason. You shouldn't list it as a disadvantage anyways. Also, please learn how to properly respond to parts of a post (the way you did it is very wrong).

[BitcoinSupremo]

I don't know any disadvantage of bitcoins yet. I can do pretty much everything noted above from other users and if I feel like, I can immediately convert it to cash hassle free through a lot of exchanges that are available. In certain countries with very low standard of life bitcoin can even make a BIG difference to their life.

Bitcoin is helping a lot of people since it has been created and I hope and believe it will continue to do so in the future. Advantages of it are already said here so no need to repeat others.

[hakanbalta577]

Its good that you have given time for this and prepared the list of advantage of bitcoin and yes agree with all of those points and that is the reason why we are using bitcoins and we also love it.The two most features in your points that i like the most about bitcoins are pseudo anonymous and low transaction fees.And good work by you.

[btvGainer]

I often meet newbies and try to explain to them what makes Bitcoin special. I am trying to compile a list of advantages of Bitcoin.

Is there anything anybody feels I should add to the list below?

Also I think its better to keep to concrete, succinct,  advantages. Not what might be considered wishy washy hype about how it will 'help bring sub-saharan Africans out of poverty by allowing them to purchase goats with Bitcoin".

Some of the reasons which I currently state:

-It allows you to have full control of your money, nobody can take away your money.

-It is not controlled by anyone. Its a decentralised peer-to-peer network. Based on open source software. This means it can not be manipulated, Bitcoin supply is fixed modelling it after gold. Nobody can stop or prevent transactions.

-It has low fees compared to other online payment methods like paypal, credit cards etc.

-It is truly global.

-It is programmable money that allows for smart contracts.

-Anybody including kids from their basement, can create financial applications without permission. This is because its open source technology and the network is not controlled by anybody. Nobody needs to ask permission to use it and nobody can restrict access. If you have access to the internet you can access it.

-It is pseudo anonymous and with some extra effort it can be very close to anonymous. You need sophisticated state actors using significant resources to de-anonymise if somebody takes extra effort.

-It is less hackable then traditional payment systems because it is a push system. That means you dont provide your 'secret keys' to receiver/merchant when you make a payment, unlike with credit cards.

Bitcoin is faster,cheaper and anonymous.Unlike traditional system,bitcoin doesn't requires middleman or third party to interfere in your transaction

[pedrog]

You also should include the disadvantages, it doesn't seem honest just to show the good stuff, you should give a complete picture.

Yes there are several disadvantages as well and as well all know comparison = similarity + dissimilarity. On this note I would like to point out some relevant points regarding this matter:

1. Volatility of price of bitcoin is there which makes it a prime target for traders. Bad news for stores/shops
2. Payment Gateways integration is low for bitcoin with respect to fiat currency.
3. Payment Availability in bitcoin is also low. Not many people get paid in bitcoin for offering their service (I am talking in general which means outside this forum)
4. Acceptance and Popularity - bitcoin needs more acceptance throughout the world, that does not mean the US/UK - the rest of the world is also there.
5. Irreversibility of transaction - though I consider it as the least because it is a fault of the user to mis-click and not system. However we are all human and we tend to make mistakes.

Edit: I did remove one about which I am also not very confident as a disadvatage but is rather a misconception.

Lack of consumer protection, network congestion leading to huge confirmation times, and lack of scalability are the main disadvantages.

Also, I don't think it's fair to compare Bitcoin with a payment system as bitcoin is not suited to be used for shopping, specially online shopping.

[franky1]

lets address the elephants in the room

1 ) It is not controlled by anyone. Its a decentralised peer-to-peer network.

2 ) Based on open source software.

3 ) This means it can not be manipulated, Bitcoin supply is fixed modelling it after gold.

4 ) Nobody can stop or prevent transactions.

5 ) It has low fees compared to other online payment methods like paypal, credit cards etc.

6 ) It is truly global.

7 ) It is programmable money that allows for smart contracts.

8 ) Anybody including kids from their basement, can create financial applications without permission. This is because its open source technology and the network is not controlled by anybody. Nobody needs to ask permission to use it and nobody can restrict access. If you have access to the internet you can access it.

1 ) although the core fanboy leaders are using a softfork to slide in a change without the network nodes needing to upgrade/vote/consent.. the fanboys have faith that their leaders are doing it with honour. but they forget that even having the ability to slide in changes without consensus, can be used for bad too.
thus bitcoin is not indestructible as it relies on the TRUST that a group of devs are going to be honourable.
.. now imagine that it was used for bad..
2 ) doesnt mean malicious/or unintentional bugs cannot be slid in.
3 ) softforks can and do manipulate
4 ) pools stop and restrict transactions every day: no fee, not meeting the rules, being a double spend. miners can CHOOSE any tx they like to be added or avoided.
5 ) low fee's of $0.06 may seem a low minimum in the western world, but is an hours labour in developing countries
6 ) not if the fee-war has anything to do with it. it is already causing a barrier for entry in many countries.
7 ) and we have to 'trust' those programming it. again emphasising the softfork weakness
8 ) proves my point of points 1,2,3,7

what i do find funny is how people who already know about bitcoin are trying hard to brush the weaknesses under the carpet to oversell bitcoin to other people who already know about bitcoin (if you are on this forum you already know bitcoin, so no need to over promise bitcoins abilities to eachother)
and if these over promises are going to be used to explain bitcoin to those that dont know (mainstream world) they will just become distrustful when they see it had been over sold to them.
EG go to india and tell them its "low fee". and then give them just enough bitcoin for an hours labour and see it evaporate in the fees alone.

[Maldesto]

No chargebacks. Freakin paypal.

[Lauda]

network congestion leading to huge confirmation times

This only happens if you don't know what you're doing.

and lack of scalability are the main disadvantages.

Decentralized systems tend to be less scalable as we've observed.

Also, I don't think it's fair to compare Bitcoin with a payment system as bitcoin is not suited to be used for shopping, specially online shopping.

Is this a bad joke? Bitcoin is optimal for online shopping.

EG go to india and tell them its "low fee". and then give them just enough bitcoin for an hours labour and see it evaporate in the fees alone.

Nice relative privation.

[jacafbiz]

1. It is anonymous
2. Faster and cheaper
3. It is deflatory
4. No/Low transaction cost
5. It is divisible to 1billionth part

[darklus123]

You also should include the disadvantages, it doesn't seem honest just to show the good stuff, you should give a complete picture.

True we should also have to discuss what are the disadvantages of bitcoin from other online payment modes in order for that certain person to understand more of what are the things that he/she might considered before joining the community.