Bitcoin, a possible replacement for credit cards

[Wimex]

Every that passes time  the man evolves and looks for new methods that are more feasible and safe when it comes to satisfying his needs, in this case economic, in the world numerous procedures have been generated to manage the payments of certain purchases, such as credit cards, Visa, MasterCard, among others created by traditional banking; But are these safe and efficient?

 A comparison has been made between the new and innovative digital currency such as is Bitcoin
and these credit cards; Both have their advantages, but they differ in speed, security, transaction cost, among others. An example of this is that many people are upset by waiting to transfer Bitcoin to the store where the purchase is being made but this only has about 10 minutes, on the other hand, cards like Visa are fast but have a disadvantage, the money  not reach its recipient directly, I do not consider this to be very beneficial.

Emmanuel Awosika gives his opinion on the matter:

To pay in bitcoin, you transfer coins from your wallet to the recipient’s address by signing the transaction with your private key. The payment is recorded on the Bitcoin blockchain, which is akin to a ledger used to record transactions. The difference is that this ledger is public and entries cannot be modified or deleted.

Compared to your credit card, Bitcoin “pushes” the payment directly to the merchant. There are no third parties involved in processing the transaction, which is why Bitcoin is described in the white paper as a “peer-to-peer electronic cash syste

Analyzing the pros and cons, I would certainly choose Bitcoin, both the buyer and the creditor win, and I think this is what should be considered when deciding on the best option.



What would you recommend? o What would be your choice?



SOURCE: https://bitcoinmagazine.com/business/bitcoin-will-replace-credit-card-payments

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[Charles-Tim]

I see bitcoin more as an investment options and I prefer to just hold it. But in the process, I can still make use of bitcoin to make certain payment and the 10 minutes average confirmation time is not an issue for me. I will still prefer to use credit card for spending as it deals with fiat which I prefer for spending. Bitcoin is an alternative to fiat, and without fiat, bitcoin may never have much value because its comparison with fiat makes it (bitcoin) to be superior.

Bitcoin is a better means of payment though as it is peer-to-peer means of payment and someone can use noncustododial wallet which gives full control unlike the use of credit card that depends on centralized bodies (the credit card company and the bank). But what I hate most about credit card payment are failed transactions that can cause headache and frustration which can never happen on bitcoin network.

For payment, I will prefer bitcoin though.

About the 10 minutes average confirmation time, some Marchants and even me can accept non-RBF transactions with high transaction fee that is enough to get the transaction confirmed in time. Once I see the transaction as non-RBF and the fee is good enough to get the transaction confirmed in time, I can accept it immediately as the person make the transaction after I check it to be non-RBF transaction.

Also, some people can accept the use of lightning network in which transaction can be completed even in less than few seconds.

[Quidat]

What would you recommend? o What would be your choice?

Credit card?
-Reversible
-Can be accepted everywhere

Cons.
-High interest
-High penalties
-Centralized

Bitcoin?
-Irreversible
-Anonymous
-P2P

Cons?
-Fees
-Not accepted everywhere (merchants)

Replacement? No it wont happen.We do still rely with these things but as an option then
it do really fits out on this category.

[DoublerHunter]

~snip~
What would you recommend? o What would be your choice?

^ In purchasing?
I will choose a credit card because my BTC is precious and I will not spend them like buying one cup of coffee which is if I have a credit card I will still use it.
That is definitely right each of them has pros and cons that we must look at before we compare them and it seems I saw that there is no way to compare them because they are both the same function to us and are useful. BTC now was not commonly used in purchasing products, they keep it every single satoshi to gain value against the dollar and nothing else.

[lombok]

If there are merchants and shops that provide payment options using Bitcoin/crypto and there are a lot of them, then I will prefer to use Bitcoin compared to credit cards or visas.

From my experience in making payments using a credit card, not all transactions are successful. And requires a long-winded process. Unlike Bitcoin, which I think is simple, you only need to make a transfer from wallet to wallet.

The money will arrive from the first party directly to the second party.

[Charles-Tim]

Credit card?
-Reversible
-Can be accepted everywhere

Cons.
-High interest
-High penalties
-Centralized

Bitcoin?
-Irreversible
-Anonymous
-P2P

Cons?
-Fees
-Not accepted everywhere (merchants)

Replacement? No it wont happen.We do still rely with these things but as an option then
it do really fits out on this category.

Do not make mistake to make payment to a wrong account while using credit card, some may result to permanent loss. We can assume the transaction is reberso but there are some situations the money will not be reversed.

Yes, bitcoin transaction is not reversible, but when confirmed. Replace-by-fee (RBF) transactions which is not yet included into a block (that is not yet confirmed, 1 confirmation) can be reversed. This is very important, if a transaction is RBF transaction, better to wait for at least 1 it more confirmation before accepting the payment.

How is bitcoin fee part of the cons you listed? If you use lightning network, the fee is low. I checked the mempool recently and over long period of time now, the fee to get transaction confirmed in the next block recently is $0.06 from 1 input and 2 outputs transaction with bitcoin at $40200. The fee are just high on centralized exchanges and it is because centralized exchanges are using it to make profit. Mining fee which is the transaction fee for bitcoin transaction is not as high as people thought, make use of reputed noncustododial wallet to confirm this.

[CaVO32]

~snip~
What would you recommend? o What would be your choice?

^ In purchasing?
I will choose a credit card because my BTC is precious and I will not spend them like buying one cup of coffee which is if I have a credit card I will still use it.
That is definitely right each of them has pros and cons that we must look at before we compare them and it seems I saw that there is no way to compare them because they are both the same function to us and are useful. BTC now was not commonly used in purchasing products, they keep it every single satoshi to gain value against the dollar and nothing else.

And if we need to look at reality of things, it will be long before credit cards will be replaced like here by bitcoin. As you said, you won't use your BTC because it is precious to you. Well, I think, most crypto holders have the same view about this because as much as possible, they don't want to spend their bitcoin for the hope that they will earn more in the future if they will hold it. So they won't use it for everyday expenses. But if in case, in the future, the price of btc stabilized and volatility is not the issue, then, maybe, a lot of users will use their satoshis for payment. But for now, I don't think they will spend it for everyday expenses.

[hatshepsut93]

Credit cards are all-around better for average user. If they lose their card or it gets stolen, they have a chance to save their money by reporting it to bank, getting the card blocked, reversing some transactions. It doesn't work in 100% of cases, but it's better than with Bitcoin where if someone gets your private keys, your coins are guaranteed to be stolen instantly and with zero chance of getting them back. And compared to non-LN Bitcoin, payment cards have much faster confirmation times and lower fees.

Sure, Bitcoin has advantages like control over your money, better privacy if you use it right, and so on; but from the point of view of regular people, those things aren't really important. Bitcoin is a solution to a problem that is not a problem to most people.

[verita1]

As we are evolving as OP very well describes. Bitcoin will be more preferred, it only remains to establish the best conditions for the majority to start using bitcoin.
In reference to the waiting time in a bitcoin transaction.
There are several solutions:
- Lightning Network.
- The current Dapps on the market and those to come because they all seek faster and lower cost transactions.
Bitcoin is the best option because it breaks the barrier of centralization and is the most convenient.

[bocyaj]

In one statement of bitcoin will replace all the process of bank.Actually when the benefits get by the shop after getting bitcoin as a payments.Why can’t they wait for just 10 minutes.It was a ridiculous mate.When the person send of 10 dollars worth of bitcoin on purchasing.After few weeks,the value of that same bitcoin will double to 20 dollars,this is not a possible in fiat payments.

[romero121]

Bitcoin as a replacement for credit cards is a wrong statement. The purpose of credit card is to use even when the account doesn't have any balance. People have specific time period within which the amount being used need to be deposited, if not interest gets calculated. This is how the credit card function.

OP have stated bitcoin as a means of transaction over the usage of credit cards. How this gonna be more effective for now is a question mark, because users get far better access on shops for credit cards whereas bitcoin acceptance is very limited and are found in specific regions. In terms of avoiding the intermediary bitcoin is good, but in real time usage credit cards take the lead. Maybe over years we can experience change.

[GreatArkansas]

Bitcoin as a replacement for credit cards is a wrong statement. The purpose of credit card is to use even when the account doesn't have any balance.
(....)

Very true, I think what OP wants to say is more on the payment method because as we all know Bitcoin's main use is for payment, another mode of payment especially online. So when we are talking about credit cards, they have almost the same similarity, because credit cards are being also used for payment but the way of paying it or how it works is different from Bitcoin.

[Leviathan.007]

That's a pretty old discussion about bitcoin being used instead of credit cards and replacing the fiat transactions on credit cards, regardless people usually use bitcoin and other cryptocurrencies as an investment and not as a payment method, I guess nothing will replace another thing because these two are both useful in their own place and these two got their own benefits, I personally consider bitcoin as investment option instead of a payment method but in some cases, this can be a good payment method for the people who prefer using and paying with bitcoin instead of credit cards.

[o_e_l_e_o]

You are comparing a transaction layer (credit cards) with a settlement layer (bitcoin). With both, when you pay for something in as store, then the merchant can see your transaction instantly. However, bitcoin is exponentially faster than credit cards when you consider how long it takes for the money to actually arrive in the merchant's account (10 minutes for bitcoin versus 3-5 business days for a credit card), or when you consider how long that transaction can be reversed for before it is considered finalized (10 minutes versus up to 180 days).

Cons?
-Fees

Note that average credit card fees are much larger than average bitcoin transaction fees. The difference is that you don't see the credit card fee because the merchant pays it rather than the customer, but you pay it indirectly as reflected by increased prices of goods.

[Western_Boris]

I personally consider bitcoin as investment option instead of a payment method but in some cases, this can be a good payment method for the people who prefer using and paying with bitcoin instead of credit cards.

In western countries, we prefer Bitcoin more as an investment or savings account, because we usually have more or less stable currency and government. Even though the old currency loses its value "slowly" all the time.
But in less developed countries in Africa, South America etc. the use case is more about replacing the worse local currency. To escape the bad policy of authoritarian dictator and so on. When you can't trust the local government, then you simply want currency in chich you don't need to trust anyone.

This video talks about 3 cases in Africa: https://youtu.be/qvwqoYSani0

My point is, how we use Bitcoin differs because of what kind of society we live on. And beauty of Bitcoin is that it has benefits for everyone of us, not matter what our local society is.

[tranthidung]

Personally, a more accurate statement should be

• Bitcoin is a better payment method than credit cards
• It's too easy to claim that anything you fall in love is better than others and will replace others sooner or later. The fact is, in life we must have as many diversifying options to choose as possible. Bitcoin in this perspective, will never completely replace credit cards or other payment methods. One or some people (minority or majority) will switch from credit cards to Bitcoin but there are always others will keep using credit cards.

[Sayeds56]

In one statement of bitcoin will replace all the process of bank.Actually when the benefits get by the shop after getting bitcoin as a payments.Why can’t they wait for just 10 minutes.It was a ridiculous mate.When the person send of 10 dollars worth of bitcoin on purchasing.After few weeks,the value of that same bitcoin will double to 20 dollars,this is not a possible in fiat payments.

It is pretty good idea and Coinbase exchange has already issued  credit cards for its account holders  which is used to buy goods and services and it is accepted in many stores in Europe and USA. I am pretty sure such cards will be issued many crypto exchanges which will have acceptability all over the world. Coinbase Card is connected to the cardholder’s online Coinbase account. Within the account, cardholders can store wallets with various forms of cryptocurrency. Cardholders are able to spend the cryptocurrency of their choice online or in brick-and-mortar stores that support their preferred form of payment.

When cardholders make a purchase with the card, the cryptocurrency is converted to the country’s fiat currency. This also allows cardholders to withdraw cryptocurrency in the form of cash at ATMs.


https://www.bankrate.com/finance/credit-cards/the-coinbase-visa-debit-card-everything-you-need-to-know/