Believe it or not, more Australians are paying off their bills using Bitcoin. In the cryptocurrency world, many investors prefer to hold on to their Bitcoin while waiting for the price to skyrocket. Unlike these investors, there are Australians who prefer to use cryptocurrencies for real life transactions in their day-to-day life. Instead of using it for investment and profiting from the increase in stock price, Bitcoin can be used to pay for goods and services at retail stores.
At the time of writing this article, Bitcoin is close to hitting the $11,000 mark. Bitcoin’s market capitalization comprises nearly 50% of the entire cryptocurrency market. However, the rapid growth of the Bitcoin has caused many experts to warn against this craze known as the Bitcoin bubble. This can be likened to the dot-com craze from the late 90s. Experts believe that too many people are getting sucked in. Furthermore, there are not many people who use cryptocurrencies for day-to-day transactions, and this can be a barrier to further growth in the cryptocurrency market.
The problem with the doubters of cryptocurrency market is these offensive beliefs often come from financiers and traders. Proponents of the cryptocurrency market have supported the growth of the digital currency by stating that real estates are sold using Bitcoin and automakers accept Bitcoin as a method of payment.
Microsoft has also taken a step forward to support the growth of the cryptocurrency market by accepting Bitcoin as a method of payment. Proponents of cryptocurrency believe that as the growth of Bitcoin and other alternative coins skyrocket, industries and institutions around the world will make way for these cryptocurrencies to be integrated into commercial uses quickly.
Paying bills using Bitcoin
In Australia, there is a website called Living Room of Satoshi. It’s unique because it was created by a Brisbane-based backup back in 2014. Using this platform, Australians can pay their bills using cryptocurrencies. Although this may seem like an unlikely case, the website is already on its way towards success as it is processing over $1 million a week for bill payments. In addition to this, users can also pay their rent and electricity on the website. It’s unfortunate that most of the media attention focuses on the speculative nature of Bitcoin instead of the practical applications that are offered.
The inception of Bitcoin proposes a unique method for financial transactions to occur. With Bitcoin, there is no fixed price like in national currencies or gold. Bitcoin only has 21 million coins in circulation. Therefore, an important question to ask those who are investing in Bitcoin is what are they expecting to get out of the investment? Do they see a potential real-life use similar to the use of cash? Are they supporting the cryptocurrency market because they want to establish a payment system, which is far more efficient than the currently centralized currencies or do they want to hold onto it in hopes of getting a massive payout?
Why do people use Bitcoin?
In essence, we can consider Bitcoin as a payment system which is merged with money. This is because Bitcoin itself is cryptocurrency that has value. Meanwhile, the blockchain, which is the technology underpinning this cryptocurrency is a public distributed ledger system that can foster peer-to-peer transactions. In fact, much of the value of Bitcoin has been associated with blockchain because it can create an effective payment network. It is impossible for Bitcoin to be detached from blockchain because the value of the currency would instantly fall to zero. However, this notion is not possible because, without blockchain, Bitcoin would not exist in the first place.
It is extremely difficult for analysts to predict where Bitcoin is going to end up ten years from now. The fact is, Bitcoin is a highly useful payment system as it has blockchain. However, there is a question of whether Bitcoin itself is reliable storage of value. As it is with any decentralized cryptocurrencies, it cannot be governed by any central authority. Hence, Bitcoin cannot be truly shut down. Even if the government makes it illegal to trade Bitcoins. In crisis countries such as Venezuela and Zimbabwe, cryptocurrencies are presenting a unique solution, especially because the financial system in the country is rendered useless.
Despite this, there is still a limited number of people who are using Bitcoin for day-to-day usage. Hence, the use of Bitcoin as a payment method in retail stores is not widespread yet. People are hesitant to use their Bitcoin because they believe that they can make a huge profit out of the speculative nature of the coin.
Why should people pay bills using Bitcoin?
While there are people who use Bitcoin to pay things in small limited amounts, it is important to note these few things. It is undeniable that the vast majority of investors and traders buy cryptocurrencies such as Bitcoin do not use it in day-to-day transactions. Instead, they are hoping to make a profit denominated in the fiat currency. There is nothing wrong with this notion because it is common for people to think about making a profit for themselves. The main difference between investing in a share and investing in the cryptocurrencies market is that the increase in price in the cryptocurrencies market is highly speculative.
Today, we cannot deny the fact that there are imminent flaws in financial institutions. People have every right to feel concerned about the monetary policies that they may feel are disadvantageous to them. Despite this, critics of cryptocurrencies believe that Bitcoin does not present the right solution. As more merchants are accepting Bitcoin as a form of payment, this does not immediately guarantee the fact that Bitcoin will become money on its own. There are more complexities with digital currencies compared to fiat currencies.
What are Bitcoin’s shortcomings?
If we compare Bitcoin to money, Bitcoin falls short of the characteristics which make up the money. Firstly, take a look at the value of money. It needs to remain consistent for it to be usable and sustainable. The simplest way that we can illustrate this is by looking at the salary of employees. If you get paid $1000 a month, you know that the value will always remain in $1000 even if you withdraw the salary any time throughout the year.
With Bitcoin, there are more complexities as there are different types of Bitcoin. Today, we already see Bitcoin Cash and Bitcoin Gold in the market. Moreover, employers will have to take into consideration the characteristics of each of these cryptocurrencies in order to use Bitcoin as a payroll payment method.
The speculative nature of Bitcoin makes it highly difficult to pay anything in real life. At the end of the day, what good is a currency if people think that it is too valuable to spend?