What are the perceived advantages of bitcoin as a means of exchange?

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There are lots of ways to send money - western union, paypal, bank wire, etc that are more established and fairly quick. What are the advantages of using bitcoin from a bitcoin-proponent's point of view?

lemonginger

Posted 2011-08-31T18:27:05.813

Reputation: 5 242

It needs to be rephrased. It is too vague/subjective right now. – nmat – 2011-08-31T00:13:41.457

@lemonginger, et al - I changed to the suggested title, feel free to suggest more edits (just click on the edit button directly) – ripper234 – 2011-08-31T00:15:17.827

Maybe something like "What are the perceived advantages that bitcoin has over other currencies or other ways of sending money?" – lemonginger – 2011-08-31T00:38:38.317

seems odd that this is one of the most favorited questions on the site at the moment and also has "close" votes. I will try creating a new question that isn't junked up with comments since "why use bitcoins?" seems like a pretty basic question. – lemonginger – 2011-08-31T18:24:29.030

See also: What are the perceived advantages of bitcoin as a store of value?

– ripper234 – 2012-02-02T10:54:08.620

This question is too subjective for a stack exchange site. From the FAQ, you should only ask "practical, answerable questions based on actual problems that you face." – eMansipater – 2011-08-31T00:00:45.387

It could easily be rephrased as "What are the qualities of bitcoin as a currency and as a means of facilitating transactions that are unique" – lemonginger – 2011-08-31T00:02:00.487

Answers

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The primary advantages are:

  1. Speed and price. You can transfer money anywhere in the world within minutes with negligible fees.

  2. No central authority. Bitcoin is not dependent on any company or government to maintain its value.

  3. You can start accepting bitcoins instantaneously, without setting up merchant accounts, buying credit card processing hardware, etc.

  4. Bitcoins are less traceable than many types of monetary transactions (though not anonymous).

  5. Bitcoins cannot be counterfeited and transactions cannot be reversed.

  6. No transaction blocking or account freezing. We have seen governments freeze bank accounts of dissidents and payment processors refuse to process certain types of transactions (wikileaks, online gambling in the US, etc). With bitcoin this is impossible.

  7. A known amount of inflation. Bitcoin is seen as a store of value because the total number of bitcoins that will ever be created is known in advance and it is impossible to create more than that.

lemonginger

Posted 2011-08-31T18:27:05.813

Reputation: 5 242

@eMansipater the government regulates money transfer agents and even gold dealers to report the identity of the buyer or seller in some cash transactions. There is no inherent reason this couldn't apply to many more classes of cash transactions in the future. In some countries in Europe, they've outlawed all cash transactions over certain amounts. The global capital controls will come as this sovereign debt (and real estate) crisis will not hit bottom until 2033.

– Shelby Moore III – 2013-03-21T18:09:27.970

1#7 is incorrect. You conflated "inflation" with "debasement". Although the debasement rate is known, the inflation rate has been running wildly between deflation and inflationary drops from $35 to $2 then back up to $17. – Shelby Moore III – 2013-03-21T18:10:47.640

4Regarding 4., they're certainly more traceable than cash, which is arguably the most common type of monetary transaction worldwide. Might be worth mentioning that specifically. – eMansipater – 2011-09-21T14:45:00.590

2In some circumstances, in others much less traceable than cash which often requires two people to physically meet somewhere and exchange it – lemonginger – 2011-09-22T01:11:35.500

Regarding 1., it's not true since you need to wait for confirmations. – o0'. – 2012-02-02T11:53:47.993

and confirmations take 'minutes', so 'within minutes' is certainly not incorrect. :) – nanotube – 2012-02-02T18:46:36.090

though you will have to setup an account with a site like mtgox if you want to exchange bitcoins for something else – Zachary K – 2012-03-08T15:47:33.257