When Bitcoin was born in 2008 with the introduction of peer-to-peer electronic cash as a decentralized and censorship-resistant global currency system, the world of financial payments changed for the better. With a new digital cash that could be sent over the internet, it reshaped the way we send value to one another forever.
With Bitcoin, sending money to-and-from anywhere in the world is now much faster and less costly than traditional payment methods such as Visa, Mastercard, and even newcomers such as Stripe and Square. Bitcoin is not controlled by governments or financial institutions like banks; there is no central authority. Nobody can block your transactions. This brings new freedoms to people everywhere and opens the doors to a new kind of money.
There are many different forms of payment that have been used in modern era, mainly with the use of credit cards. The biggest and most well known of course are Mastercard and Visa. In more recent times, others such as PayPal, Stripe, and Square have entered the payments space and have made an impact by providing customers additional options. Unfortunately, due to traditional constraints with the credit card and banking systems, the costs of using even these newer payment methods have remained the same with not much difference overall.
In regards to Bitcoin, these additional costs have been alleviated and provides added features as described above, making Bitcoin a much better payment method for customers and merchants across the globe. When comparing Bitcoin and other top cryptocurrencies against traditional payment methods, you can see which method of payment is the best.
Comparing payment methods
We took the top three cryptocurrencies and pegged them against modern online pay methods: Mastercard, Visa, Stripe, PayPal and Square. As you can see from this comparison chart, the best form of payment to date is Bitcoin Cash (BCH). Surprisingly, other cryptocurrencies such as Ethereum (ETH) and Bitcoin Core (BTC) are not as good for small-to-medium sized payments, and only become advantageous when the cost is significant to offset the transaction fees.
In the comparison chart there are various factors that are taken into consideration: payment method, transaction (tx) fees, cost , increased percentage, 0-confirmations, settlements, and reversibility. For the color formatting, green is the best and scales to red which is the worst.
All payment methods have transaction fees, but with cryptocurrencies it’s not a flat fee like with Visa and Mastercard. We took the last three months of data (last updated October 2018) for the top three decentralized cryptocurrencies and averaged the transaction fee, which shows in the first column as “Avg Tx Fee.” The “Tx Fee %” and “Per Tx Fee” columns are for non-cryptocurrency payment methods.
As you can see from the chart, Bitcoin Cash (BCH) is nearly all green, meaning out of the options it performs the best. Bitcoin Core (BTC) performs extremely poor for any transactions with a lower cost. Ethereum (ETH) surprisingly doesn’t perform as well either, but is still a better option than Bitcoin Core (BTC). However, even with the higher transaction fees of some cryptocurrencies, it’s still more cost effective than credit cards who don’t have the additional benefits of cryptocurrencies like Bitcoin.
Merchants who want to accept Bitcoin
If you’re a merchant and want to accept Bitcoin, you can do it now to help jumpstart your business – visit our Merchant Solutions page to learn more! Bitcoin is a faster and cheaper monetary exchange for merchants providing any service or goods. Whether online or in a physical location, using Bitcoin has significant benefits compared to credit card services and other methods of payment.