The Diner’s Club card can take the claim to fame of being the first ever credit card, used as early as the 1950s. Think of everything humankind has achieved since then, we’ve put people on the moon, we’ve invented the internet, and now we even have the world of cryptocurrencies to take over from the older generations of payments.
Credit cards are used more in some places than others, and are alternatives to debit cards where the money is not borrowed at all. Credit cards can be an expensive way of doing things if you don’t pay them off rapidly due to the fact that they are technically a form of lending (and often an expensive one).
Bitcoin changed the game, and though there aren’t as many Bitcoin transactions as credit cards (yet) the numbers are getting closer together.
Bitcoin and cryptocurrencies are embraced more by some industries than others, but most have accepted that this is the direction in which the world is going. Estimates say that as many as 20% of Americans use cryptocurrencies and that even more are starting to embrace them. In countries like Australia that percentage is even higher.
The gambling industry has led the way in the embracing of crypto, and some studies suggest that the majority of Bitcoin transactions are now in the gambling industry. When playing at a casino online, there are likely to be numerous payment methods, and some specific crypto casinos have started in recent years, using cryptocurrencies as the sole way to move money around.
Bitcoin taking over makes a lot of sense, as it can be a faster way to transfer money as well as having a public ledger and lower fees than many other methods.
Bitcoin is what is termed “peer-to-peer” in its transaction method, so no middleman is needed for the transaction and exchange to take place. Blockchain technology helps to keep everybody secure and details stored away so they can’t be used maliciously.
No bank is in the middle, and money is transferred from one digital wallet to another. Payment works in a similar way to cash, moving the money directly rather than using a bank, but the transaction relies on a private network of computers, recording what is going on on a ledger and allowing people to stay anonymous, too. Personal details don’t have to be shared.
Bitcoin has become super popular, partially due to its anonymity and the fact that nobody relies on a bank. Though banks are generally secure, there are instances where they’re not, and money can go missing, but Bitcoin provides a more direct and transparent process. People value anonymity in the modern age and it is becoming more hard to find.
You tap your credit card at a restaurant, for instance, and you may wonder what is actually happening behind the scenes – nothing has actually changed hands.
When the transaction is made, a merchant is authorized to take a payment from an account, but there are financial parties in the process, and sometimes a lot of them! Your money will go through the merchant, the credit card network, the bank, and the cardholder, as well as an acquirer which is an institution that releases the payment when the merchant requests it. A payment processor is also required in a lot of instances to make the transaction work. That’s a lot of people and there are things that can go wrong, plus some people aren’t comfortable sharing all the details that are needed.
Fees are also another potential issue with credit cards, and all of the organizations involved need to make money in some way, so the acquirers and the credit card networks may pass on fees. Card numbers also represent a potential security threat so this is something that people are aware of.
The finality of the transfer is one of the biggest differences, once a Bitcoin payment is sent, that is the end of the line unless the party receiving it sends the money back. Credit cards have some other protections built in, meaning things can be reported to the issuer and it is sometimes possible to cancel transactions.
Anonymity is, as already mentioned, a huge difference between the two payment methods and something nobody gets with credit cards, though prepaid cards can provide a similar service.
There’s also no lending implied with Bitcoin and you don’t pay the balance off after spending it, once the money is sent, it goes from the balance straight away. Credit cards make it possible to ring up debts and people pay interest on them, which isn’t the purpose of cryptocurrencies at all.
The money is also stored in a digital wallet, sometimes called an e-wallet, when you are using cryptocurrencies rather than flat currencies. Most find that the transactions are more straightforward.