"I don't think it's going to quite go in that direction, as Bitcoin really positions itself as an electronic payment system that does not rely on credit cards or PayPal and so is free of those transactional fees."
Ariella, then how you purchase Bitcoinc. Some way of exchange has to happen to acquire Bitcoins, am I right.
@prabhakar_desothali It's different from all the standard currencies, though, because it's not linked to any borders the way euros, pounds, and dollars are. Theoretically, it costs nothing on top of the actual exchange rate to add bitcoins to your Bitcoin wallet, though the services for acquiring and paying in bitcoin likely tack on a small fee. Another digitial currency that focuses on the system of payment with no processing fees or delays more than on the currency unit itself is Ripple.
If Bitcoin is going to be like any other currency , except being in digital form, there will be some conversion rate when someone tries to buy it , say by paying in dollars or in euros. So some currency exchange fee will automatically get charged.
@Jacob I don't think it's going to quite go in that direction, as Bitcoin really positions itself as an electronic payment system that does not rely on credit cards or PayPal and so is free of those transactional fees. It is certainly not yet at the point of being accepted everywhere credit or debit cards are. Also, as it is positioned as a currency, it wouldn't be sold with a credit card any more than dollars or euros would. Taking money that way is considered a cash advance, and that entails its own fees.
"Credit cards currently charge 2-3 percent plus 30 cents per transaction, which hinders those in developing nations from offering low-priced wares online."
Ariella, I think in future credit cards are also going to charge for recharging Bitcoin account using Credit cards. The major advantage is it can use, wherever the places Credit card or other online bank payments are accepted.
"On the transaction processing side, users transfer payments between Bitcoin "wallets," which store cryptographically generated addresses. A private key is used to digitally sign transactions and confirm that the transaction is coming from the owner of the wallet as well as help secure a transaction from being tampered with after the fact."
Rich, I read that the usage of bitcoin are increasing rapidly for the last two quarters and its safer for online transactions. At the same time, some of the countries are not allowing such online transactions too.
The skyrocketing values of the digital currency have brought it to the public's attention in the past few weeks. But some have been watching it almost since its inception in 2009. Some still cling to a stereotype, reiterated by Nicholas Weaver, a senior staff researcher at theInternational Computer Science Institute a couple of months ago, that it's just something for "Crypto-Anarchist-Libertarian-Cave-Dwelling-Goldbugs." In his view, those people are willing to pay a premium for using their favorite currency. Others use bitcoins for "selling things that cannot be processed using credit cards, namely gambling and drugs."
However, there are some who see ths kind of currency as potentially moving money into the digital age and taking currency into the 21st century. One of those is Alan Safiah, CEO of ZipZap. He argues that the digital currency can be the means of improving life for people in Third World countries. Credit cards currently charge 2-3 percent plus 30 cents per transaction, which hinders those in developing nations from offering low-priced wares online. Bitcoin, which he envisions as forming part of charitable organizations' arsenal for poverty eradication, could help people help themselves.As he says:
You just have to just give them the tools, so they can be successful. Cost-effective microtransactions enabled by the digital currency would make it possible even for people in impoverished regions to reach customers online. As e-commerce will bring them income, they would have money they need for adequate food, clean water, and medical care. They also would gain enough prosperity in time to become customers to businesses in other countries. Instead of giving aid to them, they'll be selling them stuff.
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