The Bitcoin community (BTC) has generated a lot of faith in the world of cryptocurrency, by suggesting that it could become a feasible alternative to maximum centralized payment systems that are currently existing in the market. Presently being used as a long term investment and asset like stocks, it is beginning to be accepted as a digital currency that can be used for a wide range of things. Though it is volatile as per financial experts, it has a big range of possibilities.
More and more merchants and retailers are accepting bitcoin as a legitimate way of payment as days elapse. But, it might be challenging for you to decipher how these payment methods work, in comparison to a regular credit card transaction. Are bitcoin payments safe? Here is how you can do normal things, like shopping with bitcoin.
To give you an idea about how a transaction works between a retailer and you, here is an overview of the steps:
- When you pay via bitcoins to a retailer, your transaction will have three segments to it. The first is an input, which is basically, a record of the bitcoin address that is used to send the bitcoins to the retailer, in the first place.
- The details of the number of bitcoins that are being sent by you to the retailer.
- The output of your retailer’s bitcoin address.
In commonplace bitcoin transactions, like this trading software, the people responsible for going through and checking the receipt, and confirming its validity and authenticity are miners. They find whether the receipt is backed up by a legitimate blockchain. The entire process takes no longer than ten minutes, and this does not become an inconvenience when you’re shopping online, because usually, a product delivery span is around a week.
However, when you’re shopping offline, at retail counters and store checkouts, the waiting period of ten minutes can be significantly longer, which might lead to the formation of a queue, and major delay. If there are hundreds of shoppers on a festive day, the inconvenience gets multiplied and doubled, and this can be solved only by a third-party mediation. They would be required to foot the bill so that both parties in the equation get their final amounts settled, on the backend. This would reduce the transaction time from ten minutes to a mere ten seconds, which is tolerable and comfortable for shopping counters.
However, the problem that arises with a decentralized currency like Bitcoin is that no major financial players in the market would be willing to step forth, to take care of the billing for all the transactions immediately. Not PayPal or Visa would step forward to do the necessary for the market is volatile, and risk is unimaginable. With the added risk of hackers going to any length to steal and rob you of your money, the problem with bitcoin gets more complicated.
However, platforms like Coinbase which operate as an application and an online platform, allow you to buy, sell, store and transfer bitcoins from one account to another, and can also be used effectively for shopping online as well as offline. You can do it all from your personal device, like your mobile phone, and that takes the convenience and comfort of dealing with bitcoins to another level, altogether.
It works differently than other bitcoin using platforms, in the way that it actually backs up the amount in the nature of real funds, in the currency you prefer, almost as immediately as your bitcoin transaction takes place. While the transaction takes a little while to register in the system, they assume the risk involved. And, they are able to do so, for while you sign up on the platform, you’re providing your details and they are confirming your KYC. Till today, there haven’t been any issues where hackers have tried to steal information from other people’s personal accounts or defrauding the blockchain system.
Besides, Venmo is another popular way to shop for folks. You need to sign up using your email ID, and people having each other’s email IDs can share and transfer money and have other financial transactions with one another. You need to have your bank account verified, while you sign up for the service. If both people are registered and verified on Venmo, they can send each other any amount.
Numerous companies, especially merchants, retailers, and shopping chains are already making their own POS (point of sale) systems, that usually work like Coinbase. They have the same concept of use as credit card vendors, where they usually front the cost of a product themselves while relying on good faith that you’ll pay off credit card dues. So, these POS incur the temporary debt on the behalf of the shoppers, until the bitcoin transaction is complete in as less as 10 seconds or as long as 10 minutes. These terminals would soon pop up in stores worldwide and the day ain’t far!