Categories: CryptoNews

The Role of Bitcoin In A Digital Cash Society

Whenever consumers and enterprises think about digital cash, the discussion will ultimately turn to Bitcoin. More and more people are starting to realize the limitations of Bitcoin anonymity, which makes it more appealing as a replacement for cash and traditional payment methods.

Anonymity: Bitcoin Vs. Banks

When it comes to Bitcoin anonymity, there are far more limitations than most people take into account. Generating a Bitcoin address will not require personal information, unlike opening a bank account. But that is only as far as the anonymity goes, as every transaction on the network is publicly available for everyone to see.

Granted, the data itself is still completely anonymous, as there is no personal information broadcasted when making or receiving a payment. This may give the cryptocurrency an entirely anonymous appeal, but that is not the case. In fact, there is an actual blockchain analytics task force as part of Homeland Security, which looks at Bitcoin transactions to find any suspicious activity.

Comparing this to the traditional financial sector, using a bank is more anonymous than Bitcoin is in its current state. Users can only see their own transactions whereas the involved banks can see the full history of every single client. Although a bank transfer includes information of both sender and recipient, there is little to no transparency in this system of centralized digital cash solutions.

Related Post

But there is another mental drawback to Bitcoin, as the individual user is in full control of their funds at all times. Although this is the major selling point for diehard Bitcoin aficionados, everyday consumers are disconcerted by the fact that losing the private key associated with their address results in a loss of funds. If someone loses their bank card, it can be replaced quite easily. Online banking passwords can be reset, as well as plastic card pin codes.

There is a particular tradeoff to be made between full financial control and little anonymity, compared to hand-holding and no transparency whatsoever. For some unknown reason, most of the consumers seem to prefer the latter, despite them trusting banks a lot less in recent years. Mental barriers are a valid excuse, but there will be a point where consumers have to make a choice and deal with the consequences.

Source: Positive Money

Images credit 1,2

If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

Published by
JP Buntinx

Recent Posts

The Future of Eyewear is Looking Bright

The global pandemic changed many different aspects of our lives. One thing that has been…

32 mins ago

CRO Price Up 22% Amid’s New LA Arena's CRO is up over 22% today, setting a new all time for the cryptocurrency.…

3 hours ago

Top 5 DeFi Coins to Watch for 2022

The DeFi sector of cryptocurrency is valued at over $168 billion, with over $10 billion…

14 hours ago

AMC CEO Announces Plans to Accept Shiba Inu via Bitpay in the Next 2-3 Months

In a twitter post yesterday, Adam Aron, CEO of AMC Theaters, announced the company's plans…

18 hours ago

Loopring and Gamestop – What Is Up with These Two?

Loopring and Gamestop are two entities that, at first glance, seem very different. One is…

19 hours ago

The Safest Methods to Deposit into Online Gambling Accounts

The rise of online betting is plagued with inevitable setbacks. One of which is the…

19 hours ago

This website uses cookies.