world. No registration is needed to set up an account. The
transaction fee is usually less than $0.01.
One can imagine merchants wanting customers to pay with
bitcoin in order to save on credit card fees and costs of handling
cash. Customers may want to use bitcoins because it is more
convenient than cash and safer than credit cards.
More beneficial, perhaps, is the potential for cross border
transfers. Especially guest workers from poor countries who
send money home, can save a lot by using bitcoin. Bank fees can
be up to 10% whereas bitcoin is almost free.
There are endless opportunities for new markets to arise. Online
micro-payments used to be very impractical. Now any blogger,
musician, writer etc can charge a small amount for access to his
or her content. This is actually what I do with this book. I could
have published it the old-fashioned way, but instead I released a
pdf that anyone can distribute freely. The reader is encouraged to
pay a small tip, and I hope that many small donations will
encourage me to continue writing.
Cash transactions can be made more securely and transparently
if bitcoins are used instead. It is impossible to counterfeit
bitcoins, and all transactions are recorded on the blockchain.
The above mentioned pros of bitcoin arise even if it is just used
as a medium of exchange, not as money. If one or both parties
need to exchange between bitcoin and fiat, the transaction cost
will rise somewhat, but may still be cheaper than any alternative.
The fixed supply will prevent inflation. Fiat, on the other hand,
loses value over time, and it is likely that this occurs in a way
which grows the size of the government and the wealth of
individuals who own stock or real estate, at the expense of
everyone else. Bitcoin would create a leveled playing field
where the government is restricted to spend no more than it
raises in taxes and the financial market would have less of an
up-drift because there would be no inflation and no artificially
low interest rates.
Something that some may consider a benefit and others a
disadvantage is that anyone will be able to hide his or her
wealth. Earlier you would have to either see your cash inflate
away, trust your Swiss banker or hold gold which is difficult to
exchange and transport. Bitcoin only require a code you can hide
or even memorize.