Bitcoin CryptoCurrency As Product Of Blockchain Innovated Technology!

When consumers pay for products or services, they pay for the gains and the benefits of that product or service. Consumers rarely concern regarding the underlying technology that their products or service built on it. In this context, Bitcoin as newly payment means, and product of blockchain innovated technology challenged to provide a competing user experience for today mature payment means and channels.

Advantages of using Bitcoin as payment mean may vary from consumer to consumer, consumers would enjoy bitcoin payments for number of reason: transactions fee is extremely low compared with credit and debit card purchase, if you are a merchant, you pay nothing to receive bitcoin, the processing fee paid by the sender, those fees are considerably lower than traditional payments networks, Nicholas Tomaino (1)  claims that using bitcoin for small business and entrepreneur  reduce merchants credit card processing fees to less than one percent and save three to five percent of their revenues on these fees. Fraud prevention is another important value consumers of the bitcoin will gain, consumers can pay for businesses without exposing their personal information, such as name, billing addresses, etc., and this would provide them identity-theft protection, that today payment card processor cannot offer, this is because of when executing bitcoin transactions, there is no personal information or identity attached to the transaction, only the sender, receiver  pseudonymous addresses and transaction amount  . Bitcoin transactions are irreversible and final, merchants will enjoy the “No Chargebacks” transactions that occur when a cardholder disputes a purchase made by his card, usually because of a defect in the products or service, or being a victim of identity thrift –fraudulent transaction. For international businesses trading, executing payments using bitcoin would eliminate the need for managing multiple currency, by using single bitcoin account, you can easily execute payments anywhere in the world, in a fast, secure, and confidential approach, cash flow and settlement risk is highly reduced because of near settlement time , credit risks do not exist at all, since the fund –bitcoins ownership proof need to be presented at the time of executing the payment (2), from another hand for businesses that are working in different countries, especially some developing country that suffer and experiencing currency volatility, holding currency balances  in universal currency wallet like bitcoin could streamline, simplify and minimize the cost and risk of managing FX exchanges.(3)

However, there is potential drawbacks and disadvantages from using bitcoin as payment means, bitcoins valuation volatility is a significant reason that barrier bitcoins widespread, the volatility of bitcoins due to the fact the bitcoins is deflationary currency, and there is limited number of coins -21 million in total (4)  by 2140, thus the demand will increase every moment. Lake of awareness and understanding is another disadvantage, there are still many people around the world are unaware of digital currency and bitcoin, bitcoin as new form of money and payment mean is sceptical for many, businesses that accept bitcoin because they enjoy the advantages of it, the list of merchants that accept bitcoin are small compared to physical currencies, they still need to grow in order to benefit from network effects. Another major problem from consumer perspective which would discourage the uses of bitcoin as an everyday payment method is the lake of consumer protection since bitcoin transactions are final – irreversible transaction, the consumer, would not be able to dispute their merchant to chargeback if there is a genuine need. Finally, legal and regulatory implications of using bitcoin have a potential impact on adopting bitcoin. Bitcoin facing different regulatory concerns on different levels, capital and currency control is main concerns for some countries (e.g., Chain and Russia), other jurisdictions pay more attention to other aspects, such as consumer protection, taxes evasion, and AML/CTF activates (e.g., USA, UK, Australia).

Developing new idle cryptocurrency, should highly consider number of factors, that facilitate the commercialization success of its product, a good definition of product advantages and real value of it crucial, the consumer of a new cryptocurrency should enjoy the new value from using it, from another hand, considering target market, cultural variations, politics and bodies of laws is vital. I would argue that taking into account such factors when designing new cryptocurrency is impracticable, the cryptocurrency as product is tightly coupled with its underlying technology – blockchain, the decentralization  nature of such technology, for example, would make it impossible to regulate it due to different regulatory bodies and regimes, the transaction finality and irreversibility is core principle in distributed ledger technology , such feature provides the power of near real-time settlement and reducing credit risks, in the same time consumers in other use cases will lose their protection as result of irreversible transaction, and merchant will enjoy “No Chargeback”. Bitcoin as product has nothing to do with such conflicting requirements/benefits, businesses need to truly understand and develop new business model to gain the benefits from bitcoin or any other cryptocurrency, and ensuring the legal compliance to protect their communities and ensure trust and safety, and at the same time encourage and maybe educate their consumers and protect them –when needed. 

References :
1) https://www.entrepreneur.com/article/233625, Nicholas Tomaino, business development manager at Coinbase
2) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/414040/digital_currencies_response_to_call_for_information_final_changes.pdf , Digital currencies: response to the call for information
3) https://www.americanexpress.com/us/content/foreign-exchange/articles/international-payment-solutions-bitcoin-gaining-popularity/ , AMEX, Businesses Begin Using Bitcoin as Payments Solution for Some Developing Countries
4) 4 https://en.wikipedia.org/wiki/Bitcoin, Bitcoin WiKi